National consistency for electric vehicles and road pricing in Australia

Electric and hydrogen vehicles are the future of Australia’s supply chain economy.

However, the fledging product technology is currently climbing the apex of what must be considered Australia’s Mt Everest of legislative hurdles to get a foothold in the Australian freight and logistics market.

Australia is a single national economy. Yet so much of the regulatory framework that impacts on businesses is designed and enforced at a State or local level.

For those operating businesses in the freight logistics sector, this means daily confrontation with a hodgepodge of legislative and regulatory hurdles that variously confound and complicate the process of transporting freight safely and efficiently.

States have rushed to the finish line determined not to be left behind to establish their own state specific sets of road user pricing.

The result is that they are strangling an infant commercial market with excessive unit cost increases before it has even managed to establish its first breaths.

Victoria has announced the introduction of a 2.5 cent per kilometre levy on electric vehicles, following an earlier decision made by South Australia.

The ACT appears to be mooting an ‘opt in’ distance charge whilst the NSW Government appears uncertain.

It is disappointing that a simple and nationally consistent Federal fuel excise regime is at risk of ultimately being replaced with another complex set of charges administered at the state and territory level.

ALC believes that a road pricing process should fairly capture all the relevant cost components of roads so that, as far as is practicable, pricing does not distort the choice of transport mode used by consignors and/or consignees in the transport of freight; and while road infrastructure development undertaken to advance either general congestion issues, light vehicle user or community amenity is not cross subsidised by heavy vehicle operators.

Australian governments currently have on foot a process called Heavy Vehicle Road Reform.

The intention is to change the manner in the road user charge for road access levied on heavy vehicles to one calculating charges using a forward-looking cost base as used to calculate prices for other utilities.

In a submission made in response to a 2020 discussion paper prepared as part of the reform ALC said: One of the key benefits of HVRR is the opportunity to align more closely road and rail pricing and create a more level playing field and hopefully help get more freight on rail – an aim of a number of jurisdictions.

Whilst this reform is only about the supply side, the proposed methodology for roads will facilitate a more similar approach to rail.

This is a useful outcome, even if this will not be fully achieved until the demand side of HVRR is progressed.

ALC is firmly of the view that taxation mechanisms for road use should be uniform throughout the country.

It is also imperative that all road users, irrespective of whether they are operating light or heavy vehicles, electrically or traditionally powered, pay the road user charges necessary to permit the construction and maintenance of the roads Australia needs now and in the future. We can no longer rely on the fuel excise to do this.

The growth of fuel cell electric vehicles, as the CSIRO noted in its National Hydrogen Roadmap can be hampered when Federal, State and Local government entities have their own portfolio of priorities: “and time spent by technology proponents in acquiring multiple approvals can constrain development and increase costs.

An inter/intragovernmental authority with the power to make decisions within a reasonable time frame will therefore be important in facilitating industry growth.

This could provide a ‘one-stop-shop’ for gathering all the required licences for a specific hydrogen project. The Roadmap also noted that a lack of infrastructure is a barrier to support increased use of fuel cell electric vehicles.

This raises two issues. Firstly, it is important the infrastructure is there to allow the efficient transport of hydrogen that is not completely reliant on movement by road. The second issue relates to planning.

Whilst it is unlikely Australia’s federal system would permit a single consent authority to develop a hydrogen approval authority as suggested above, jurisdictional planning instruments must ensure:

(a) a spread of charging and refuelling stations in urban areas;
(b) ‘back to base’ charging and fuelling infrastructure is not impeded; and
(c) infrastructure for the movement and storage of hydrogen is permitted.

The Australian Government has recently published Draft National Urban Freight Planning Principles that are intended to be included in the planning documentation generated by States and Territories.

They are one of the important outputs from the National Freight and Supply Chain Strategy — a process championed by ALC. Uptake of alternatively powered vehicles is the future of Australia’s commercial and consumer economies.

Consistent taxation mechanisms for road access is key to supporting Australia to remain competitive in the global market.

Kirk Coningham
CEO, ALC