Charged for Change in Australia's Heavy industries and Remote Areas

Australia is rapidly embracing solar, wind and batteries as the foundation of its net-zero strategy. But one crucial clean energy solution remains largely absent from the national conversation: renewable diesel.

Greenhouse gas emissions - especially carbon dioxide - are the main driver of global warming through the greenhouse effect. The Paris Agreement calls for limiting global temperature rise to well below 2°C above pre-industrial levels, with an ambition to keep it to 1.5°C. Achieving this requires a rapid shift away from fossil fuels and a major scale-up of renewable energy.

The UN’s 2025 report, Charged for Change, sends a clear warning:

“Current climate policies are falling short of Paris Agreement goals […] slowing the shift to renewables and pushing the world towards a 2.6°C future that leaves millions behind.”

With the right policies and investment, the report shows the world could limit warming to 1.5°C, lift 193 million people out of extreme poverty, and add $48 trillion to global GDP by 2060. The takeaway is clear: a diverse, ambitious clean energy mix delivers far-reaching economic, environmental and social benefits

“Investing in renewable energy is not just good climate policy - it’s good economics. Every dollar spent delivers long-term savings and development dividends.”

“By 2060, integrated action on renewables and energy efficiency can deliver $20.4 trillion in cumulative cost savings - reinforcing the development and climate case.”

For Australia, this means seizing every viable low-emissions solution - not just those that plug into the grid.

Australia’s Opportunity (and Challenge)

As a high-income nation with vast renewable energy potential, Australia faces a pressing challenge: how to decarbonise hard-to-electrify sectors like freight, mining, and agriculture, especially in regional and remote areas. While solar and wind power are scaling rapidly, many parts of the economy still require reliable, transportable energy sources that electricity alone can’t yet provide.

These areas often operate off-grid or rely on weak, unreliable electricity networks, making the transition to battery electric vehicles (BEVs) and powering high-load equipment difficult. Even where grid access exists, it's frequently insufficient to support widespread electrification. As a result, these locations remain diesel dependent. This dependence not only drives high greenhouse gas emissions, but also exposes communities to fuel price volatility, supply chain risks, and long-term sustainability challenges. Upgrading grid infrastructure across vast, sparsely populated regions is both technically complex and financially burdensome, often delaying the rollout of clean technologies for years.

Renewable Diesel: A Practical Solution

Renewable diesel, also known as hydrotreated vegetable oil (HVO), is a drop-in fuel that can directly replace fossil diesel in existing engines. Its compatibility with current infrastructure makes it a valuable transitional fuel, where diesel use remains essential and electrification faces significant hurdles. It cuts lifecycle emissions dramatically, improves air quality, and is well-suited to:

• Heavy transport and freight

• Agricultural and mining machinery

• Remote energy systems

• Backup power generation

Renewable diesel can play a key role in Australia’s transition to a net-zero economy, starting in the very regions most dependent on fossil fuels today.

Applying the Charged for Change Framework

Whilst the UN report calls for bold, coordinated climate action, it's time Australia responded, not just with ambition, but with breadth. Renewable diesel isn’t a silver bullet, but it can help close critical emissions gaps and support a truly inclusive energy transition. For Australia, this means:

• Including renewable diesel in national climate commitments, such as our updated NDC under the Paris Agreement. As of July 2025, Australia's does not explicitly include renewable diesel as an emissions reduction strategy despite recent steps to facilitate its use with the adoption of the 2025 Australian Fuel Standard (Paraffinic Diesel).

• Targeting rural and regional energy systems, where dependence on diesel remains high and clean alternatives are limited. This is where renewable diesel offers a practical, near-term solution. As a drop-in replacement for fossil diesel, it can be used in existing engines, machinery, and distribution infrastructure without costly modifications. This makes it especially valuable in areas where transitioning to electrification is likely to be slow, expensive, or infeasible, providing immediate emissions reductions while maintaining the performance and reliability essential to remote Australian industries.

• Investment in renewable diesel needs to be prioritised alongside solar and wind if Australia is serious about reaching net zero across all sectors. While electrification is advancing, many industries like freight, mining and agriculture, will remain reliant on liquid fuels for years to come. Climate finance mechanisms, including targeted grants, production incentives and public-private investment, could rapidly scale renewable diesel manufacturing from sustainable sources like waste oils and tallow. Supporting fuel-switching in diesel-dependent regions through subsidies or tax relief would deliver fast, measurable emissions reductions without waiting for costly infrastructure upgrades.

In Australia, renewable diesel deserves a place in the national clean energy agenda.

*NDC = Nationally Determined Contribution under the Paris Agreement.