Fuelling Switch Makes Financial Sense
One billion dollars. That’s how much Tasmanians spend each year on petrol and diesel to fuel their cars (ABS data for drivers and kilometres, last two years' average fuel prices from fuel.io). And this is just for passenger transport; light freight, freight, marine, aviation and other transport are not included.
How much would we save by switching over to electric vehicles, once each commuter car eventually gets replaced by an Electric Vehicle? About $500 million per year, or about $1,000 per driver. That’s a decent chunk of cash by anyone’s standard, but it’s likely an underestimate, as it’s calculated using the flat tariff rate, while many people can and will charge using an off-peak tariff and solar panels.
Whether it’s a saving of $500 million or more, it would be a massive boost to our local economy, giving people more money in their pocket to pay for essentials or add demand for goods and services.
This is the savings calculated on fuel alone, and there are similar savings to be had on repair and maintenance each year. How do we get there? From less than 5% EVs on Tasmania’s roads to 95%? First, any effort from the government must be incentive-based - that is all carrot and no stick.
Look at the installation of solar panels in Australia as an example. This is one of the biggest success stories globally in distributed clean energy, with around 3 million households installing solar across Australia; providing some of the cheapest marginal cost energy per kWh anywhere on earth. This huge groundswell of distributed clean energy was kick-started with a consumer incentive - a generous feed-in tariff - that bootstrapped a multi-billion-dollar industry, employing thousands.
If we zoom back in on Tasmania, we see that it is the perfect place for electric vehicles to take off. We have 100% net-clean energy on the island and a burgeoning EV-facing entrepreneurial sector, ready to grow.
The state government’s $2,000 consumer subsidy is a great start, particularly when paired with other incentives, such as the state government no-interest loan to install home chargers and the federal government’s fringe benefit tax exemption (ask your accountant about that one).
How quickly should we make this transition? According to the CSIRO, keeping pace with other states would mean about 20-30% of new vehicle sales in 2030 are EVs, while leading the way would be somewhere above 50%. In UTAS’ submission to the State Emissions Reduction Plan, they split the difference and go for 37%.
In conclusion, shifting to electric vehicles presents an opportunity for substantial economic and climate benefit. Using incentive based policy settings to encourage adoption, Tasmania can rapidly decarbonise its transport sector this decade.
The state government is currently consulting on its transport emissions reduction plan until 29 November, head to recfit.tas.gov.au/ and have your say.
Jack Redpath is the Principal at Carbon Zero Initiative, a new Tasmanian for purpose organisation advocating for a fast, fair and sustainable transition to 100% clean energy.
