New report: Australian forestry must reduce diesel relianceFriday 29 Aug 2025
The report, released this week by the Australian Academy of Technological Sciences and Engineering (ATSE), in partnership with Fortescue, gives five clear recommendations, including that the Federal Government commission an independent review to reform financial incentives that support diesel use. ATSE CEO Dr Kylie Walker said that to achieve its low-emission targets, Australia needed to take a new approach to fueling heavy industry, and this could be achieved by applying technological solutions, and reforming policy and tax levers that support diesel. “There is an urgent need to decarbonise Australia’s most emissions-intensive sectors,” Dr Walker said. “By encouraging the application of mature clean fuel technologies, investing in fast-tracking clean tech in development, reducing the cost of green alternatives and increasing the cost of diesel in a targeted and balanced way, Australia can achieve its industrial decarbonisation." Early-stage research and development initiatives are also crucial in supporting the transition away from diesel. The report calls for an independent review which should consider a range of reforms, including to the Fuel Tax Credits Scheme (FTCS), which is a major barrier to the transition away from diesel. By subsidising diesel use, the FTCS currently protects high-emitting sectors from the true cost of fossil fuel consumption and undermines national emissions reduction goals. The report also recommends examining changes to the Australian market-based emissions reduction mechanism by exploring the introduction of carbon pricing or an adjustment of the Safeguard Mechanism to better reflect the environmental impact of diesel. ATSE’sreport highlights a range of mature and emerging technologies, and the need for a comprehensive techno-economic assessment of decarbonisation pathways beyond electrification – as well as mechanisms to bring clean fuel tech to market. Other recommendations include the establishment of a coordinated Future Diesel Strategy, investment in comprehensive infrastructure to support the clean energy transition and targeted R&D investment. ATSE Fellow, Fortescue Board Member and former CSIRO Chief Executive, Dr Larry Marshall, emphasised the importance of Industry partnering with Government to shape science-based Industry and Energy policy. “Heavy Industry wants to transition to cleaner fuels, but the current policy settings make it harder than it should be. Right now, the Fuel Tax Credit scheme effectively subsidises burning diesel, while companies that invest in clean alternatives face higher costs especially in this transition period. That imbalance holds back innovation and locks in emissions,” Dr Marshall said. The Federal Government has a critical role to play in fixing those settings and creating incentives that accelerate the adoption of clean technologies. More >> Source: ATSE 
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