Transitioning to net zero emissions needs a new supply chain partnership

Some 20 million vehicles use Australian roads each year. Transport is the third highest greenhouse gas emitting sector in Australia, accounting for 19 percent of all national emissions.

Taking to the roads are 77,000 registered buses, more than 600,000 trucks, and 15 million private cars.

Australia has committed to net zero emissions by 2050, so transferring our extensive public and private transport modes to zero emissions is a big part of that journey.

The emphasis is on transition to clean energy for cars, buses, and trucks, and to date the The Institute of Transport and Logistics Studies (ITLS) team have contributed to the development of alternative transition pathways in respect of the full life cycle effects of battery electric and hydrogen conversion for buses and trucks.

The greatest challenge is having a governance framework that creates unambiguous policy settings developed by government, that provide the clarity needed for industry to invest in future clean energy solutions.

There needs to be greater dialogue between procurement agencies in government and the private sector, noting that most expertise in energy technology, manufacturing, and implementation is in the private sector. A critical role for government is to build trust in a Supply Chain Partnership Contract (SCPC), by recognising the diverse set of roles, and risk sharing, that can be delivered by private sector partnerships that negotiate or tender with government to deliver outcomes aligned with achieving the net zero goal.

This would involve a paradigm shift from traditional contracting (i.e., contracts between government and bus operator, or between a truck business and truck manufacturer), to management agreements between government and consortiums. This new arrangement would account for the entire supply chain: energy provision generation and distribution, original equipment manufacturer, asset owners, and operators. This would give the government certainty of service continuance in a net zero emission future for all transport modes.

With benefits accruing to energy, infrastructure, and bus/truck providers in particular, there is a case to be made for sharing the risks with all parties who stand to benefit from the transition to clean energy.

This also aligns well with the real reason for contracting – to get the best value for the taxpayer’s dollar.

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