Australia is spending billions on fuel security. What if some of that went to electric trucks?

Australia is spending billions on fuel security. What if some of that went to electric trucks? The war in Iran has kicked off the 'largest supply disruption in the history of the global oil market', and it's also drawn attention to something invisible to most Australians — we use a lot of diesel to keep this country running. We crunched the numbers, and per capita, Australians use almost twice as much diesel as the United States. From mining to growing food, diesel is needed in all economic sectors. There are only about 27 million of us, but living on this vast continent, it's unsurprising that transporting goods swallows the biggest portion of the fuel. The impact of the war was felt immediately; builders complained about delivery prices, and groceries became more expensive. We currently have 36 days of diesel in the national stockpile, but the government is spending big to increase that number. This year's federal budget included an $11.9 billion National Fuel Security Plan; $3.2 billion of that is to physically stockpile diesel and jet fuel. Short-term fix for a long-term issue The billion-dollar fuel security package aims to increase Australia's fuel reserves to last for 50 days. But what if instead we worked out how to use less diesel? Frances Vierboom, chief executive of non-profit renewable advocacy group Rewiring Australia, said Australia had an obvious problem. "Australia has a fuel crisis because so many of its machines still rely on fossil fuels," he said. "The long-term fix for this, where we won't have inflation built into all our groceries, where we aren't beholden to whatever's happening around the globe, is if we run on Australian-made electricity. "What we need to do is think about how at each moment that a fossil fuel machine breaks down, we end up replacing it with an electric one." Yet electrification of our trucking industry didn't get much of a look in. The only measure in the fuel security plan was $40 million allocated to electrifying Australia Post's delivery fleet, not even 1 per cent of the total package. Aside from the fuel security plan, a tax break to encourage the electrification of passenger cars has so far cost the government $3.35 billion in revenue and will cost another $2.8 billion by the 2028-2029 financial year. And there is a groundswell in Australia. A year ago, electric vehicles (EVs) made up just 7.5 per cent of new car sales. In May this year, that figure hit a record high of 23 per cent. We will still need liquid fuels for a long time. But how hard is it to electrify our transport and freight? First stop: delivery trucks It's a question Australia's Renewable Energy Agency (ARENA) was interested in when it commissioned a report into electrifying trucking. It found it is much easier and more achievable to electrify transport with shorter distances around urban centres first. This is what the industry refers to as "last mile" delivery — these are the light commercial or medium rigid vehicles that travel shorter distances and can "return to base" and charge overnight at depots. Industry observers say electric versions of the trucks that deliver your groceries and do most of the deliveries in our cities now cost the same as a diesel truck. "Electric trucks have started to reach a really exciting tipping point," Climate Council analyst Ben McLeod said "We've seen some really interesting proposals that suggest that a $3 billion package over five years could support anywhere from 30,000 to 50,000 new electric trucks," Mr McLeod said. ARENA's report found that 98 per cent of transport operators are "small-medium-enterprises" and have a median profit margin of just two per cent. And 70 per cent of them only have one truck. Mr McLeod isn't suggesting the government spend $3 billion buying everyone a new truck. He's arguing for something akin to a subsidy scheme to help operators get over the up-front cost barrier because once they're on the road, electric trucks are cheaper to run and service. "And that would displace upwards of a billion litres of diesel per year," he said. "It would cut the costs for the operators of those trucks by over $30,000 per year." Going small is an idea that has support from the trucking industry, according to Warren Clark, the chief executive of NatRoad, the peak industry body for road freight operators. "You can't expect industry to try and absorb the cost, and that's really what everyone forgets," Mr Clark said. He said the Australian Renewable Energy Agency (ARENA) tended to fund larger businesses, and that would need to change if a government was serious about decarbonising the road freight industry. "There's no funding that is available for small one- or two-truck operators,"Mr Clark said. It's a proven model in EVs that Helen Rowe from the non-profit Climeworks Centre thinks could help kickstart the rollout of electric trucks. "We've seen with EVs that once you sort of get it out of the starting blocks, people are trying them, they're talking to their neighbours about what the EV are like," she said. "There's going to be a bit of a transition in how we roll them out, how different, if it's a delivery business, where they're going to put the charging infrastructure on their site, there's a bit of that kind of change that needs to be navigated." Plug-in road trains? The most complicated part of road freight is not the urban delivery trucks carrying your online grocery shop; it's the long-distance freight, the massive road trains traversing thousands of rural kilometres. Electric prime movers are still two to three times the up-front cost of their fuel-powered equivalents. However, there are big benefits in focusing on this part of the sector, according to energy analyst David Leitch. Articulated trucks make up just over three per cent of Australia's freight, yet they gobble about a third of all the diesel used across the sector. "Long haul is where the diesel's consumed, so that's where the economics matter most," he said. Electric trucks could reduce running costs by 60-70 per cent, which dwarfs up-front costs. "If you look at a B-double, it roughly costs a dollar to go a kilometre on diesel; it costs 30 cents to do the same trip on electricity," Leitch said. His modelling suggests electric long-haul trucks could cut fuel costs by 47-71 per cent. Mr Leitch calculates that a B-double travelling 100,000 kilometres a year would save up to $73,000 annually, and the extra up-front costs could be recouped within three to four years. Mr Leitch is at the forefront of discussions on how Australia can electrify our trucking industry, and has shares in New Energy Transport, a company building its own electric truck charging infrastructure. Chicken-or-egg problem For Mr Leitch, charging is the chicken-and-egg problem that sits at the heart of the issue. Without an appropriate charging network, companies won't invest in electrifying their trucks. The electrifying road freight report commissioned by ARENA estimates at least 165 megawatt charging hubs will need to be built across the country to support the electrification of the country's road freight. Based on global data, Mr Leitch calculated a megawatt-scale, grid-connected truck charging hub with 20 to 50 bays would cost between $35 million and $85 million a piece, before accounting for any additional costs. Using ARENA's numbers with Mr Leitch's cost estimate, a countrywide network would cost between $6 billion and $14 billion. These are big numbers, but similar to the cost of the current fuel security measures. Warren Clark, chief executive of NatRoad, the peak industry group, says building charging infrastructure is exactly the role governments should play, just like they have in the past by building major roads. "If I'm the treasurer and I'm the infrastructure minister, I'd be pushing infrastructure and I'd be putting all the money into infrastructure and building it," Mr Clark said. "Commercial companies are not going to really go out and buy trucks where they can't get them charged." Instead of tackling the whole country, Mr Leitch thinks we should focus on big transport corridors where the majority of our trucks go. He has crunched the numbers on electrifying Sydney to Melbourne for B-Double trucks, and while he admits it's "optimistic", he calculates that could be done for under $5 billion. "So if you look along these big highways, there are already lots of truck charging stops to charge the diesel trucks," Mr Leitch said. Mr Leitch's research notes that the single biggest cost variable is grid connection. It found that a 20-megawatt connection can require upgrades costing US$3 million to US$8 million on its own, so sites with existing industrial power supply have an advantage. With transmission lines often not far away, he suggests repurposing or leasing nearby land for megawatt truck recharging stations. "Do we have to have a major war and everyone starts starving because there's no diesel in the country before we actually take this seriously?"Mr Leitch said. First stages within reach "If we look at the picture right now, about one per cent of the national fleet is electric trucks," Warren Clark said. He said currently Australia had roughly 2,500 operators and tens of thousands of trucks on the road. "The average life of these trucks is basically 15 years of age," Mr Clark said. For Mr Clark, the enthusiasm of some proponents is hard to reconcile with the reality of moving freight across Australia's vast distances. "The building of the network across regional Australia is an enormous infrastructure project that won't happen overnight," he said. "We 100 per cent agree that freight within metropolitan areas can be transitioned to electric … they're back-to-base, they can be charged overnight." But China, at the forefront of electrification, is offering a lesson to the world in how quickly this transition is possible with the right support. Over the last five years, sales of heavy electric trucks have gone from near zero to 230,000 in 2025. They now account for more than a quarter of total truck sales, and it's predicted that this year electric truck sales will surpass diesel trucks. Tennant Reed, the Australian Industry Group's director of climate change and energy, says soaring energy costs and cheaper trucks are changing the calculus for Australian businesses. "The sums in those business cases have been improved very much by both the ongoing decline in the cost and improvement in the performance of electric vehicles and hybrid vehicles and the rise in expected diesel prices." "It does also make sense, both on climate grounds and on resilience and economic security grounds, to transition to as much electrified transport as we can practically manage. How much diesel could we save? A new report from the Superpower Institute, a not-for-profit policy think tank, argues Australia can improve fuel security from about 17 per cent today to 87 per cent by 2040. And for harder-to-electrify sectors like aviation and shipping, low-carbon liquid fuels could be used until alternative technologies prove commercially viable. As of August 2026, Australia had approximately 3.3 billion litres of diesel in its reserves, enough to cover us for 36 days. These back-of-the-envelope calculations show electrifying Australia's diesel light commercial vehicles, which include cargo vans, utes and panel vans, would save an estimated 5.85 billion litres of diesel per year. That's equal to 17.3 per cent of Australia's total diesel consumption and would extend our current diesel reserve to 44 days. If we also electrify all diesel rigid trucks, we could save approximately 9.47 billion litres of diesel per year, or 28.0 per cent of what Australia currently consumes. This would extend our diesel fuel reserve to 50 days. Electrifying our full diesel road freight fleet, including semi-trailers, could save an estimated 14.36 billion litres of diesel per year, or roughly 42.5 per cent of what is currently consumed. Hypothetically, if we could electrify our transport sector, the diesel reserve would stretch to last 63 days in total, which is 27 days longer than it currently does. If 27 days doesn't seem like much, remember the government is aiming for about 10 extra days of fuel supplies, and the reality of a fuel reserve is that it's prohibitively expensive to try to keep this much fuel in storage. "We're not saying shut it all down tomorrow, but we're saying that you should be investing at least as much in reducing our dependence on this stuff, because that's the long-term investment that's worth making," Rewiring Australia's Francis Vierboom said. Cost is of course a factor. But beyond that, electrifying trucking and using 'homegrown Australian electricity' could shield the country's supply chains from global energy shocks. An even bigger benefit would be the dent it could make in the amount of emissions Australia contributes to the atmosphere. Eight barrels of diesel per head equates to a lot of greenhouse gas and is one of the reasons we are among the worst in the world in per capita emissions. Small changes can already make a big difference, says Baethan Mullen, chief executive of The Superpower Institute. "Every litre of fuel that we are able to save through electrification makes us more fuel secure," he said. "It leaves those parts of the economy that can't yet electrify with easier access to diesel." Notes about this story - Diesel savings methodology: We used the 2025 vehicle registration data and the 2020 ABS fuel consumption rates for each class of vehicle, the most recent data available. AI tools were used to assist with initial calculations during the modelling process. Climateworks independently verified the figures and combined this data with the latest Australian petroleum statistics to estimate current diesel use. The diesel reserve figure comes from the government's August 2026 minimum stockholding obligation data. Each scenario assumes full electrification and is an estimate, not a forecast. - *David Leitch has disclosed a shareholding in New Energy Transport, a company building its own electric truck charging infrastructure, and also co-hosts a podcast sponsored by Janus Electric, a rival truck electrification company. - We refer to BITRE-defined categories of light-rigid, heavy-rigid and articulated trucks as light, heavy and long-haul respectively, for the purposes of this article. Graphics and illustrations by Alex Lim