Construction

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Construction relies heavily on diesel-powered plant (heavy machinery), mobile equipment and temporary site energy systems. For this part of the sector, low carbon liquid fuels (LCLFs) are one option for reducing emissions while electrification, battery-electric equipment and lower emissions site design continue to develop.

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Reducing emissions Fuels for construction On-site fuel handling Policy and regulation Resources

Construction at a glance

About 10%

of Australia’s emissions are built into materials and construction

Making steel, cement and concrete, and putting them in place, accounts for a tenth of the national total .

More than 75%

of heavy construction equipment runs on diesel

Power density, performance and reliability make diesel the default on site .

About a billion litres

of diesel-equivalent energy a year

The energy used on construction work itself, expressed as the diesel that would carry the same energy. It runs excavators, cranes, generators and site equipment .

Half or more

of lifecycle emissions can be cut by switching fuel

Renewable diesel needs no blending and drops straight into existing machines. Most can also run biodiesel blends up to 20% .

How construction is reducing emissions

Decarbonisation of the construction sector involves a combination of measures rather than a single solution.

1

Efficient machinery and engines

Newer diesel machines offer efficiency gains over equipment more than 15 years old, along with much better emissions control technology .

2

Operational improvements

Reducing idling cuts fuel use and emissions. On average, equipment on construction sites is idle around 25% of the time, and trucks can be idle up to 50% of the time .

3

Electrification of smaller machinery and equipment

Electrification is the long-term answer for construction emissions, but it will not arrive evenly. Industry estimates suggest electric alternatives may cover only around 40% of construction equipment energy use by 2030, rising to about 60% by 2040, with power availability, duty cycles and utilisation shaping what is practical on any given project .

4

Drop-in low carbon liquid fuels

Renewable diesel needs no blending and runs in existing machines. Many diesel machines can also take biodiesel blends of up to 20% .

Fuels for construction

Across much of the sector, the dominant liquid fuel remains conventional diesel. Australian construction guidance increasingly treats low carbon liquid fuels as a practical near-term decarbonisation strategy while electric alternatives continue to scale.

A diesel-equivalent hydrocarbon fuel produced from oils, fats and residues through hydrotreating (HVO/HEFA) or through synthetic pathways (PtL). Chemically and functionally different from biodiesel.

How it can fit in construction

  • Excavators and earthmoving plant
  • Cranes
  • Site generators and lighting towers
  • Tipper and concrete trucks
  • Compressors and pumps

Considerations

It can align with paraffinic diesel specifications and may be suitable for some existing engines, subject to original equipment manufacturer (OEM) approval and operating conditions.

Learn more

A liquid fuel made by reacting fats or oils, such as vegetable oils, used cooking oil or tallow, with an alcohol. Reacting with methanol produces fatty acid methyl esters (FAME); reacting with ethanol produces fatty acid ethyl esters (FAEE).

How it can fit in construction

  • Earthmoving plant (blends)
  • Site generators
  • Haulage trucks

Considerations

Usually requires closer attention to blend limits, storage, maintenance practice and OEM requirements.

Learn more

On-site fuel handling

Step 1

Store it safely

Temporary site tanks must be secure, bunded, clearly labelled and kept away from drains, excavations and high-traffic areas. AS 1940 is the benchmark: a bund holds at least 110% of the largest tank, or 25% of all tanks, whichever is greater.

Step 2

Refuel around live plant

Mobile refuelling keeps excavators, generators, pumps and other equipment working as compounds and access routes change. It needs trained personnel, spill controls and accurate fuel issue records.

Step 3

Test before use

Regular on-site checks pick up water, sediment and contamination before they cause downtime. Biodiesel blends absorb water and oxidise, so they need closer watching than renewable diesel.

Step 4

Approve the change

Confirm OEM and hire-company approval before switching fuels. Store and label fuels separately where required, and document specifications, cold-weather performance and compatibility.

Policy, regulation and technical guidance

The sections below cover the standards, policy, certification criteria and organisations shaping how low carbon liquid fuels are used across the construction sector, grouped by the role they play.

Fuel quality and technical standards

These decide whether a fuel is legal to sell in Australia and fit to run in construction plant and site equipment.

Certification criteria

If a fuel is bought or claimed as low carbon, these schemes decide whether the claim counts and how it is proven.

Key construction sector bodies

Industry bodies, regulators and associations that set construction practice, guidance and safety requirements for fuel use on site.

Australia

Australian Constructors Association (ACA)

National industry body for major contractors, publishing guidance on construction decarbonisation, including renewable diesel and fossil fuel free construction.

ACA

Australia

Bioenergy Australia

Peak industry body for the Australian bioenergy sector, representing producers, technology providers and end users of low carbon liquid fuels, biogas and bio-based products.

Bioenergy Australia

Australia

Civil Contractors Federation (CCF)

National representative body for civil construction contractors, and a sector voice on infrastructure delivery, skills and workforce issues.

CCF

Australia

Infrastructure Sustainability Council (ISC)

Peak body for infrastructure sustainability in Australia and Aotearoa New Zealand, and operator of the IS Rating scheme used across planning, design, construction and operations.

ISC

Australia

Safe Work Australia

National work health and safety policy body whose guidance covers plant safety, diesel exhaust exposure and risk management on construction sites.

Safe Work Australia

International

Committee for European Construction Equipment (CECE)

Represents Europe’s construction equipment manufacturer associations, engaging on standards, regulation and the sector’s low emissions transition.

CECE

Keep exploring
Diesel fuels Fuel supply chains Funding initiatives

Resources

A selection from the library related to this page.

    • Report
    • 2025

    Opportunities and Priorities for a Low Carbon Liquid Fuel Industry in Australia
    Commonwealth Scientific and Industrial Research Organisation (CSIRO), prepared in partnership with the Australian Government
    CSIRO report, prepared in partnership with the Australian Government, outlining opportunities for a low carbon liquid fuel industry in Australia and identifying priorities to progress projects from development through to commercial scale.
    Read more
    • Report
    • 2025

    Refined Ambitions: Exploring Australia’s low carbon liquid fuel potential
    Clean Energy Finance Corporation (CEFC), prepared by Deloitte
    CEFC’s Refined Ambitions report assesses Australia’s low carbon liquid fuel potential, covering supply chains, investment considerations and policy levers across fuels such as SAF and renewable diesel.
    Read more
    • Technical & scientific report
    • 2024

    Update on drop-in biofuel and co-processing commercialization
    International Energy Agency Bioenergy Technology Collaboration Programme (IEA Bioenergy) Task 39
    IEA Bioenergy Task 39 report on progress in drop-in biofuel and co-processing commercialisation, updating its 2022 report on low carbon intensity drop-in fuels. Finds that the hydrotreated esters and fatty acids (HEFA) pathway remains the only fully commercial route to drop-in biofuels, with a substantial increase in announced facilities and in sustainable aviation fuel output driven by supportive policy.
    Read more
    • Data & statistics
    • 2025

    Australian Energy Statistics – Update Report 2025
    Australian Government, Department of Climate Change, Energy, the Environment and Water (DCCEEW)
    DCCEEW annual update report on Australian energy production, consumption and trade by fuel and sector, providing the official baseline for liquid fuel end use.
    Read more
    • Technical & scientific report
    • 2024

    Embodied Carbon Projections for Australian Infrastructure and Buildings
    Infrastructure Australia
    Infrastructure Australia projections of embodied carbon emissions from Australian infrastructure and construction activity, used to scope decarbonisation requirements including fuel switching.
    Read more
    • Legislation & regulation
    • 2000

    Fuel Quality Standards Act 2000 (Australia)
    Australian Government
    Australian legislation establishing national fuel quality standards and compliance arrangements for fuels supplied in Australia, including standards and determinations relevant to liquid fuels.
    Read more
    • Guidance
    • 2025

    Regulating Australian fuel quality
    Australian Government, Department of Climate Change, Energy, the Environment and Water (DCCEEW)
    DCCEEW webpage explaining how fuel quality is regulated in Australia, including standards, determinations and compliance information relevant to petrol and diesel supply.
    Read more
    • Legislation & regulation
    • 2023

    Renewable Energy Directive (RED III) amendment (Directive (EU) 2023/2413)
    European Union (EU)
    EU directive amending the Renewable Energy Directive (RED III), including updated renewable energy and transport provisions and sustainability rules that affect biofuels and other renewable fuel pathways.
    Read more
    • Report
    • 2025

    Delivering Sustainable Fuels: Pathways to 2035
    International Energy Agency (IEA)
    IEA report outlining pathways to scale sustainable fuels to 2035 across transport and industry, including policy and investment needs and where fuels can complement electrification in hard-to-abate uses.
    Read more
    • Report
    • 2025

    Decarbonising diesel industries
    Australian Academy of Technological Sciences and Engineering (ATSE)
    ATSE report examining options to reduce conventional diesel use and emissions across Australian mining, freight and agriculture, fisheries and forestry, including technology pathways, enabling infrastructure and policy. Source of the figure that diesel accounts for approximately 84% of on-farm energy consumption in agriculture, at page 9. Note that figure is for on-farm agriculture only, not the three sectors combined, and ATSE attributes it to three secondary sources without giving a year.
    Read more
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