CSIRO policies will 'rip heart out of trucking industry: ATA

By: Jason Whittaker

A CSIRO report has raised the prospect of scrapping old trucks and increasing the fuel excise, drawing a stinging rebuke

A CSIRO report has raised the prospect of scrapping old trucks and increasing the fuel excise, drawing a stinging rebuke from the Australian Trucking Association (ATA).

The future of transport fuels: challenges and opportunities models four policy options government can look at in response to rising oil prices and emission levels.

The report states road vehicles 15 years or older should be scrapped while the fuel excise should increase five-fold over 40 years. It also raises the option of mandating improvements in vehicle fuel efficiency and offering a $2000 subsidy for low emission and alternative fuel vehicles.

According to the report, increasing the fuel excise is "the most effective in achieving a marked additional reduction in fuel use and emissions over the long term", while taking old vehicles from the road will also have environmental benefits.

"The modelling found that the policy of compulsory scrapping of 15 year old vehicles is the most effective in driving a rapid decline in greenhouse gas emissions and fuel consumption in the next decade," the report says.

It says its renewable energy policy will eventually result in lower freight costs because rigid trucks, for example, will run on electricity.

"In the long term (beyond 2030) the modelling projects…freight transport costs can be expected to be similar or lower than today with the adoption of new fuels and technology," the report says.

Furthermore, it says mandatory fuel improvements will consistently deliver lower transport costs per km. But it also says the $2000 subsidy will not reduce travel costs for freight as much as passenger vehicles because the latter has relatively lower running costs.

The ATA, however, argues such policies will result in a rapid decline in the trucking industry because operators will struggle to survive.

"These policies would rip the heart out of the trucking industry, and it would all be for nothing," ATA Chairman Trevor Martyn says.

"Instead of sponsoring reports about the future price of oil and possible policy options, the CSIRO should be devoting its resources to real scientific research."

Martyn says the best method an emissions trading scheme using upstream acquittal.

Under the ATA’s proposal fuel retailers will purchase carbon permits and add the extra cost to the price of fuel, meaning operators will pay more for fuel under emissions trading.

The trucking lobby argues this is the best method because operators can pass increased costs onto clients by way of fuel levies or negotiate different methods to reduce their bill.

"Some of our customers may decide to reduce their transport costs by consolidating their deliveries or even switching to other modes of transport," Martyn says.

While not addressing upstream acquittal, the report says emissions trading alone will not "radically change" the transport sector. It expects fuel will rise by around 25 cents a litre if the Federal Government introduces a carbon price of $100 a tonne.

The ATA uses the European model of $40 a tonne to reach its figure of 10 to 13 cents a litre rise.

Martyn says the policies raised in the CSIRO’s report will actually have an adverse affect because companies will not be free to determine how best to reduce emissions.

"It would, in fact, make it more difficult and expensive for Australia to reach its greenhouse reduction targets," he says.

The report also states its policy suggestions may have negative consequences. It says modelling "highlighted a significant rebound effect", meaning the policies advocated may have the opposite effect.

It also indicates a price spike in everyday goods such as grocery items. According to the report, a loaf of bread may rise an extra 31 cents because transport of food to retail outlets makes up one to six percent of the cost of grocery items.

In pushing the case for alternative fuels, the CSIRO found fuel may increase by $2 to $8 a litre by 2018. It says a slow decline in oil supplies means freight transport will need to reduce travel by five percent because technology will not be able to compensate.

However, the report says any rapid decline means freight travel may need to be reduced by up to 40 percent, which will pose significant challenges as freight levels are expected to double the next decade.

As a result of oil constraints, the modelling projects more freight to go by sea or rail as they reduce travel by 30 percent as well as slash emissions by 17 percent.

The report is the result of the Future Fuels Forum, which was established in November 2007 to develop suggestions on how to adapt to climate change as well as dwindling oil supplies.

The forum, however, does not consist of any trucking groups. Some of its members include the Australian Automobile Association, the Australian Conservation Foundation, Caltex, NRMA, the National Transport Commission (NTC), Woolworths and the South Australian and NSW governments.

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