FEATURE: Australia, ranking seventh in the world for freight transport, must shift to battery-electric freight vehicles (BEV), and infrastructure must evolve to support the shift, according to recent work from the Australian Renewable Energy Agency (ARENA).
The agency was inspired to this conclusion by work from AECOM that found that freight accounts for up to 40 per cent of the transport sector’s domestic carbon emissions, with road freight representing 80 per cent of this, accounting for a third of transport sector emissions.
The Electrifying Road Freight report found the nation moves up to 223 billion tonnes-kilometres of freight around the country each year. ARENA projects this will grow by 77 per cent in the coming decades. Road freight accounts for 8.6 per cent of the nation’s GDP.
“Electrifying this sector is essential to meeting our national climate goals,” the report writes. “Electrifying this critical sector is no longer optional, but essential.”
The blueprint also offers a new assessment methodology that draws from freight movement datasets, energy forecast datasets and stakeholder input.
In the short term, urban freight could be the first to adopt electrification since there are already electrified fleets in operation.
The Fifth Estate in the Buildings as Batteries masterclass in 2024 reported on some of these fleets, including Team Global Express’s fleet of electric trucks and Zenobe’s “EV as a service” fleet leased to Woolworths.
The opportunity, said the report, was in the “availability of suitable vehicles” and the “predictability of delivery routes.”
Intrastate and interstate freight would be medium to longer-term opportunities as infrastructure and grid are in need of rapid scale-up to meet growth in the field.
“Underpinning this is the need to ensure that the energy grid can service the additional energy demands of a fully electrified road freight sector.”
While electricity generation is forecasted to be “sufficient to meet increased freight corridors”, the report said that transmission and distribution networks will require significant upgrades to manage changing load profiles.
Charging infrastructure is crucial
Also needed is a phased rollout of charging infrastructure along key freight corridors. This is particularly necessary on national highways to support both intrastate and interstate freight operations in the future.
The key is “cross government collaboration” to tailor a freight solution that meets local needs. This means coordinated policy, planning, and regulation are key to “overcoming infrastructure and investment barriers”.
Needed from the government are integrated planning, targeted demonstration projects, and crucially, a national electric freight strategy with defined goals for the sector’s decarbonisation.
The aging fleet could be both an opportunity and a barrier
According to the report, the average freight vehicle in Australia is more than 14 years old, meaning fleets have a longer lifespan than non-freight related commercial fleets, which typically operate on a replacement cycle of roughly three to five years.
Smaller vehicles are easier to electrify because smaller vehicles lean towards the national passenger fleet average of 10 years, making the cycle more suitable for adoption.
There are opportunities in aligning the transition of freight to EVs with the fleet replacement cycle, which would minimise operational disruption, reduce upfront costs and ensure charging infrastructure and grid upgrades are delivered in time to support demand.
However, if this were poorly coordinated, it may lead to infrastructure bottlenecks, underutilisation of new technology and increased cost for operators to replace vehicles prematurely.
Industry feedback suggests that larger operators tend to have quicker fleet cycle rates of roughly every five years to keep up with new technologies to keep up with new technology and to benefit from enhancements to fuel efficiency or safety technologies. However, smaller operators would replace fleets over a longer period and are more likely to purchase used vehicles, pushing the national average of vehicle age up.
Factors and barriers to electrification
Despite having a smaller population and GDP than other countries, Australia has the seventh largest volume of freight compared to any other OECD country. And by electrifying, every kilometre can be made “cheaper and more efficient,” the report said.
However, according to the report, there are several roadblocks that “underscore operational reality” of electrification.
Regulations
Regulations provide both regulatory oversight and protection but also create red tape and complexities in the system. While the National Heavy Vehicle Regulator (NHVR) serves as the primary federal authority to administer heavy vehicle national law, states still retain aspects of the decision making in licensing and access. For example, restrictions on routes would require longer travel distances and increased operational costs and time, and curfews limiting noise impact can affect delivery times and service efficiency.
This could also affect the availability and operation of an electric truck but could also present benefits for electrification by offering extended hours of operation and regulatory easing by getting everyone on board.
Small operators
While largescale logistics companies are important to Australia’s freight industry, 98 per cent of operators are small to medium enterprises, with 70 per cent only having one truck. This may put a significant dent in electrification due to SMEs having challenges in achieving economies of scale, accessing capital for newer technologies and navigating regulations.
Low margins
Despite being large emitters, the industry only has a median profit margin of 2 per cent, meaning further financial constraints when it comes to fleet upgrades and technology adoption.
This could also be an opportunity, as financial vulnerability would cause operators to focus on operational efficiency and cost management. However, limits to the capacity to bear the upfront cost of acquiring BEV vehicles would still staunch electrification.
Licensing
The greater the weight of the vehicle, the more advanced the licensing requirements and progression to higher licence classes would require holding a lower class licence for one to two years and sometimes completing additional training and assessments, depending on the state. However, because BEVs often have a higher gross vehicle mass, meaning truck drivers would be required to have advanced licenses, which could discourage the adoption of BEVs.
Industry calls for government intervention
The report said that interested stakeholders included a broad range between operators, government, industry and unions – and the consensus is a growing interest in electrifying freight.
But some stakeholders suggest that without greater government support and investment, the industry will likely not meet the 2050 emissions target due to barriers to cost, availability of vehicles and infrastructure. This would particularly impact operators of smaller margins due to the capital cost of BEVs. Notably, while operational challenges were initially a low-ranking topic, further conversations saw it become a key concern of stakeholders.
Electrification on a truck-by-truck basis is slow and inefficient. We need an electrified national rail network with Eurotunnel style waggons for inter-city trips and trucks to roll-on-roll-off for local deliveries.