Transitioning Australia to a fossil fuel free construction future

30 Jun 2022

Australia is going to be left behind unless it accelerates the electrification of our construction sites and creates a local renewable diesel market. Both are essential to the decarbonisation of the construction industry – a major contributor of global emissions. Electrification is the surest path to decarbonising construction but there is a very limited availability of electric construction equipment and machinery in Australia.

With fuel security, skyrocketing petrol and energy prices, it’s critical we have a renewable fuels industry to decarbonise construction as a transition fuel. The time is now for Governments to provide financial incentives to support electrification and a local renewable diesel industry like in the UK and we need collective action to make this a reality.  

The warning signs have been there for years. But the World Economic Forum's most recent Global Risk Report lays it out in black and white. "Climate action failure" is now the number one long-term global threat and the goal of 1.5°C fundamental to our future. But the transition away from fossil fuels can create jobs in renewable energy industries and secure a self-sufficient supply of reliable, affordable energy.

Construction emissions contribute twenty-three per cent of global greenhouse gas emissions, Roughly 5.5% of these emissions are directly caused by powering machinery and equipment, mainly through fossil fuel use. At Lendlease, we’ve set ourselves the ambitious target of reaching ‘absolute zero carbon’ by 2040. To do that, we must find a way to eliminate all emissions from construction sites – and without the use of carbon offsets.

The challenge is clear. How quickly can we move away from powering our construction sites with fossil fuels? With the help of the University of Queensland, we are a step closer to answering that question. 

Our research has found electric construction machinery is economically competitive over its operational lifespan, provided we have the right charging infrastructure from the outset. Electrification is the surest path to decarbonising construction but there is still limited availability of electric construction equipment and machinery in Australia.  There are no battery-electric models currently available for a significant number of large construction equipment types within typical trades, such as civil, demolition and piling. UQ estimates that we could hit 40% of energy use by 2030 and 60% by 2040. 

This still leaves a 40% gap. Construction is not typically considered a ‘hard to abate’ sector – but this 40% tells a clear ‘hard to abate’ story. Supportive policy, financing and advocacy will all be needed as the construction industry makes the transition together.

As the shift to electrification gathers pace, renewable diesel is a critical transition fuel. An advanced biofuel made from animal fats, vegetable oils, and agricultural waste, renewable diesel is chemically identical to conventional diesel and can be used as a 100% ‘drop-in’ fuel without machinery needing any modification. 

Lendlease is already using renewable diesel across several construction projects in the United Kingdom, including Google’s headquarters in London. 

As renewable diesel is not commercially available in Australia, we are using biodiesel – a cleaner alternative to mineral diesel, but far from zero emissions. Two renewable diesel refineries in regional Queensland and Western Australia are expected to be in production by 2025. While we wait, feedstock like tallow and used cooking oil is being exported overseas to be transformed into renewable diesel in other markets where low-carbon fuel policies have accelerated the adoption of renewable diesel.

California’s Low Carbon Fuel Standard, for instance, sparked several commercial renewable diesel ventures. According to UQ’s report, production capacity across the United States is expected to exceed 300,000 barrels per day by 2024 – up from around 25,000 in 2020.

Australia, in contrast, has no low carbon fuel policies to support either electrification or renewable diesel, no national biofuel program and no government subsidies. Yet. If we are to take a serious step change towards decarbonising construction, renewable diesel must be manufactured locally in Australia.

In sustainability circles, people often talk about ‘co-benefits’ of climate action. This may be cleaner air or healthier workplaces or regional jobs or national energy security. In the case of electrification and renewable diesel, the answer is ‘all of the above’.

The signposts are all pointing Australia in one clear direction. The question is how quickly we can introduce policies that support industry to invest in an orderly transition towards the inevitable fossil fuel free future.