New research by the Australia Institute shows Australia’s dependence on petroleum poses a serious fuel security risk and, with no policies in place to seriously curb petroleum use, the sector’s emissions will eclipse electricity sector emissions by 2030. The report recommends developing and implementing policies to replace petrol-fuelled vehicles with low emission alternatives.

The Australia Institute Climate & Energy Program has released their latest National Energy Emissions Audit, analysing the electricity sector over the previous months.

Key Points:

• Between February 2020 and January 2021, annual energy combustion emissions fell by about 7.3 % (22.3 Mt CO2-e).
  • More than half of that fall in emissions (12.8 Mt CO2-e) relates to petroleum use directly impacted by the pandemic response.
  • There is no evidence in NEM states that the pandemic response reduced electricity consumption by any significant measure.
• Petroleum emissions are expected to reach around 125 Mt CO2-e in 2030. By contrast, electricity generation emissions are expected to fall to 111 Mt.
  • On the basis of current policy settings, by 2030 petroleum emissions will be a considerably larger source of emissions in Australia than electricity generation.
  • Transport accounts for 75% of total petroleum consumption with most of the rest coming from mining (14%) and agriculture (5%).
• The government is spending larger sums to support Australia’s continuing dependence on petroleum fuels by announcing $94 million to buy and store crude oil in the USA for 10 years, and by subsidising the continuing operation of loss-making oil refineries in Australia with so-called production payments.
  • This combination of extreme import dependence combined with government policy promoting the role of petroleum fuels in fuelling transport and other services, presents a major security challenge.
  • The best way to increase Australia’s energy security in the medium term would be to reduce consumption of petrol by rapidly switching to electric passenger vehicles.
• Throughout summer, the highest peak demand on the NEM was lower than in the previous five summers, with rooftop solar proving more useful and making a larger contribution to the grid than the Liddell or Yallourn coal-fired power stations.

“Australia is becoming increasingly fuel insecure, but propping up our remaining oil refineries will not help,” said Dr Hugh Saddler, author of The Australia Institute’s National Energy Emissions Audit.

“The chemical composition of most Australian produced crude oil is not well matched to the configuration of Australian refineries, meaning that the bulk of production—equivalent to about 30% of Australian consumption—is exported.

“It is hard to see the logic of spending public money to prop up the two oil refineries which will remain in Australia — after the two which have already announced their impending closure are gone — given they are old, inefficient refineries that mainly produce petrol, which will be the first fuel to decline with the rise of electric vehicles.”

“If Australia were serious about reducing greenhouse gas emissions, higher priority would be given to developing and implementing policies to replace petrol-fuelled vehicles with low emission alternatives, particularly in the transport sector. Yet no such policy exists or is even being considered,” said Richie Merzian, Climate & Energy Program Director at the Australia Institute.

“A direct, and in many ways superior, replacement for petrol-fuelled passenger vehicles are Electric Vehicles—a technology to encourage and support in Australia, not denigrate and ridicule, as the Prime Minister did so publicly less than two years ago.”