Australia’s road sector relies heavily on conventional diesel and petrol across freight, bus, service and light vehicle fleets. For parts of the sector that are hard to electrify quickly, low carbon liquid fuels (LCLFs) are one option for reducing emissions while electric, hydrogen and other lower-emissions vehicle pathways continue to develop.
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108 MtCO₂-e a year
Domestic road vehicles produced an estimated 107.6 Mt carbon dioxide equivalent (CO₂-e), rounded to about 108 Mt CO₂-e, in full fuel-cycle greenhouse gas emissions in 2024-25.
84%of domestic transport emissions
Road vehicles made up about 84% of full fuel-cycle greenhouse gas emissions from domestic transport modes in 2024-25.
Passenger and freight split
Passenger road vehicles produced 69.4 Mt CO₂-e and road freight produced 38.1 Mt CO₂-e in full fuel-cycle emissions in 2024-25.
264 billionvehicle kilometres travelled
Road vehicles travelled an estimated 264 billion vehicle kilometres in 2024-25, showing the scale of road transport fuel demand.
Low carbon liquid fuels for road
For road transport, the main low carbon liquid fuel options are renewable diesel, biodiesel, ethanol blends for compatible petrol vehicles and, over a longer timeframe, synthetic diesel-type fuels or e-fuels. Australia’s fuel quality framework includes determinations or requirements for conventional diesel, paraffinic diesel, biodiesel and ethanol fuels.
Renewable diesel
A diesel-equivalent hydrocarbon fuel produced from oils, fats and residues through hydrotreating (HVO/HEFA) or through synthetic pathways (FT). Chemically and functionally different from biodiesel.
How it can fit in road
Often seen as the strongest near-term drop-in low carbon liquid fuel for existing diesel road fleets
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.
Biodiesel and fatty acid methyl ester blends
A liquid fuel made by reacting fats or oils, such as vegetable oils, used cooking oil or tallow, with an alcohol.
How it can fit in road
May offer a lower-carbon substitute or blend component for diesel road applications.
Considerations
Usually requires closer attention to blend limits, storage, maintenance practice and OEM requirements.
Ethanol Blends
A petrol fuel made by blending petrol with ethanol, commonly produced from plant-based feedstocks such as sugar, starch or other biomass
How it can fit in road
May offer a lower-carbon blend component for compatible petrol engines and petrol-powered road equipment, but is not a diesel substitute
Considerations
Requires checking OEM approval, blend limits and storage practices; higher blends may need dedicated or flex-fuel vehicles.
Synthetic diesel-type fuels (including Fischer-Tropsch fuels biomass-to-liquid and power-to-liquid (e-fuels))
Diesel-type fuels made from biomass-derived synthesis gas, or from renewable hydrogen combined with a carbon source.
How it can fit in road
Chemically similar to renewable diesel, most relevant where very low lifecycle emissions are needed and direct electrification remains difficult.
Considerations
Volumes are limited and production pathways are still developing. Life-cycle emissions depend on feedstocks, energy inputs and certification.
Retail fuel supply and forecourts
Road fuels move through terminals, depots, retail forecourts and fleet refuelling sites. A low carbon fuel pathway needs to consider product specifications, storage and blending arrangements, labelling, vehicle compatibility, quality assurance, fleet maintenance and customer information.
How fuel moves through the road sector
Crude oil or finished products are produced locally or imported from overseas.
Fuel is received, unloaded and stored in tanks at terminals or depots.
Additives are blended to meet fuel specifications and stored in tanks.
Samples are tested to ensure quality, safety and compliance with standards.
Fuel is distributed to service stations or depots for sale and supply.
Fuel is used in vehicles to power transport and keep people and goods moving.
Road fuels today
Across the road sector, conventional diesel remains central to heavy freight, buses and other high-utilisation vehicles, while petrol remains important across the passenger and light commercial fleet. The Transport and Infrastructure Net Zero Roadmap identifies switching to low carbon alternatives where electrification is not feasible as part of the transport transition.
Diesel remains central for heavy vehicles
Heavy freight, many bus fleets and other high-utilisation road vehicles need high payload, long range and fast refuelling.
Petrol remains important in the light fleet
Passenger and light commercial vehicles will continue to include many internal combustion vehicles during the transition period.
State biofuels schemes
New South Wales and Queensland have road-fuel biofuels sales mandates for ethanol and biodiesel in defined circumstances.
Australia
Australian Academy of Technological Sciences and Engineering (ATSE)- 2025
Commonwealth of Australia- 2025
Australian Contractors Association- 2024
Pathways to Transition
Electrifying Road Freight:
Pathways to Transition-2025
Climateworks Centre- 2020
Grattan Institute-2022
International
2025
Policy, regulation and technical guidance
The sections below cover the standards, certification criteria and organisations shaping how low carbon liquid fuels are used across the road transport sector, grouped by the role they play.
A standards organization that develops and publishes voluntary consensus technical international standards for a wide range of materials, products, systems and services.
Technical standards drafted and maintained by CEN (European Committee for Standardization), CENELEC (European Committee for Electrotechnical Standardization) and ETSI (European Telecommunications Standards Institute)
Australia’s Guarantee of Origin scheme, which is administered by the Clean Energy Regulator, provides a transparent, publicly accessible record of the emissions associated with the production of key commodities, including low carbon liquid fuels for road transport use. The scheme is being expanded to cover low carbon liquid fuels.
Independent global certification scheme covering sustainable biomass, bio-based materials, renewable fuels and circular economy products. ISCC is widely used across European Union renewable fuel pathways including road transport biofuels supplied under the Renewable Energy Directive.
Australia’s national regulator for heavy vehicles and a key body for heavy vehicle law, standards, modifications and lower-emissions vehicle transition issues.
National trucking industry body representing 50,000 businesses and 200,000 people and actively publishing on low carbon liquid fuels and trucking decarbonisation.
National body representing the bus and coach industry in Australia, including operators, manufacturers and suppliers.
Association of Australian and New Zealand transport agencies providing practical and impartial advice on road transport and infrastructure.
World road transport organisation and publisher of the commercial road transport industry’s Green Compact decarbonisation framework.
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