Three recent publications relevant to the alternative fuels industry

Part 3 Possible futures: scenario modelling of Australian alternative transport fuels to 2050

This report, released by the CSIRO, provides the detail behind many of the strategic assumptions
contained in the Strategic framework for alternative transport fuels (see blog Part 2). Some of the
key observations and assumptions include:

• The rate of alternative fuel uptake could begin to reverse the decline in Australia’s transport fuel self-sufficiency from around 2020.
• Fuel economy (i.e. L per 100 km) is expected to improve 25% for new petrol vehicles and 14% for diesel engines by 2050, when the efficiencies of these engines could converge.
• LPG and gas (spark-ignited) engines are expected to rapidly catch up to diesel efficiency.
• Natural gas (mostly LNG trucks) is projected to have strong growth from a small base.
• An exception to the general trend in consumption of alternative fuels is LPG which could decline if there is a rise in LPG prices and the availability of hybrids.
• Most growth in biofuel consumption will be in replacing diesel for the land transport sectors, which offer the highest sale price for fuel. However, there is an expected shift towards bio-derived jet fuels in the 2040s and a subsequent reduction in road biodiesel consumption.
• Only 15% of rigid trucks are assumed to have the appropriate drive cycle and short range freight route to benefit from running primarily on electricity.
• The cost of road freight is expected to increase in the next decade because there are fewer unrealised fuel efficiency gains available to offset rising oil prices.
• Given government policy is for a reduction of GHG emissions by 80% across the economy by 2050, the transport sector is unlikely to contribute a proportional reduction using lower carbon alternative fuels alone.
• Due to the preference of motorists to avoid upfront costs, the adoption of alternative fuels could require financing and mixed ownership models to increase uptake.
• The modelling approach ignores fast adopters who have driven recent hybrid adoption and often do not display rational economic decision-making relating to achieving payback.

The CSIRO ‘Possible futures’ paper identifies the opportunity to improve Australia’s transport fuel self-sufficiency through development of multiple alternative fuel options. While the industry may challenge the rigour of some assumptions applied to the outlook for specific alternative fuels, the paper provides food for thought when the relative fuel prices are viewed under different what if? scenarios.