Fuel security: Is 20 days enough?

Australia faces significant risks to national security, energy security and climate change mitigation, due to a heavy reliance on imported oil and access to only a limited amount of fuel at any one time, according to new analysis from the Australia Institute.
The new research finds that Australia is unprepared to deal with any potential fuel security crisis.
Key findings:
90 per cent of the fuel consumed in Australia is derived from oil sourced outside of Australia.
In FY2018 Australia had on average access to 20 days’ worth of fuel. The emergency powers to ration fuel stocks would take up to three weeks to be implemented.
Australia’s oil production has already peaked and is likely to continue to decline.
Addressing Australia’s fuel security risks requires reducing oil use through increased fuel efficiency and transition to non-oil-based transport.
Electric vehicle uptake increases transport energy security by replacing imported fuel with domestically produced electricity.
“Last year Australia had access to only 20 days-worth of liquid fuel, but the emergency powers to ration fuel stocks take up to 3 weeks to be implemented. This means that by the time the rationing powers come into force, there may not be any fuel left to ration,” said Richie Merzian, Climate and Energy Program director at the Australia Institute.
“90 per cent of Australia’s fuel – like petrol and diesel – is sourced from overseas, and Australia only has about 20 days of fuel in reserve. Given Australia is clearly not equipped to deal with a liquid fuel security crisis, we strongly support a review of the Liquid Fuel emergency Act.
“Australia Institute research makes it clear that producing more oil in Australia is not the answer to the fuel security problem. Australia’s oil production has already peaked and there is great uncertainty surrounding the scale, quality and viability of oil production in prospective resources.
“Addressing Australia’s fuel security risks requires a reduction in oil use.  This involves increasing fuel efficiency and transitioning to non-oil energy sources through electric vehicle targets and fuel efficiency standards.
“Australia is an international laggard when it comes to fuel efficiency. Weak fuel standards and an absence of a national electric vehicle policy leave Australia among the least fuel-efficient fleets in the OECD, and far behind the rest of the world in electric vehicle uptake.”
The submission, Liquid Fuel Security Review, was prepared by Tom Swann, a senior researcher at Climate and Energy Program at the Australia Institute.

The RENAULT-NEOLINE-cargo sailing-ship sustainable supply chains transport

Supply Chain Climate Change Solutions Summit and Expo

In recognition that people in industry learn from successful deployments, not white papers, three industry associations have banded together to organise a Supply Chain Climate Change Solutions Summit and Expo. This event will be held in Melbourne on Thursday 13 June 2019. Read more

Maersk sets net Zero Co2 emission target by 2050

Aimed at accelerating the transition to carbon neutral shipping, Maersk has announced its goal to reach carbon neutrality by 2050.
The company said that to achieve this goal, carbon neutral vessels must be commercially viable by 2030, and an acceleration in new innovations and adaption of new technology is required.
Climate is one of the most important issues in the world, and carrying around 80 per cent of global trade, the shipping industry is vital to finding solutions, said the company. Maersk’s relative CO2 emissions have been reduced by 46 per cent(baseline 2007), approx. 9 per cent more than the industry average.
As world trade and thereby shipping volumes will continue to grow, efficiency improvements on the current fossil based technology can only keep shipping emissions at current levels but not reduce them significantly or eliminate them, the company said.
“The only possible way to achieve the so-much-needed decarbonisation in our industry is by fully transforming to new carbon neutral fuels and supply chains,” Søren Toft, Chief Operating Officer at A.P. Moller – Maersk said.
Maersk is putting its efforts towards solving problems specific to maritime transport, as it calls for different solutions than automotive, rail and aviation. The yet to come electric truck is expected to be able to carry max 2 TEU and is projected to run 800km per charging. In comparison, a container vessel carrying thousands of TEU sailing from Panama to Rotterdam makes around 8800km. With short battery durability and no charging points along the route, innovative developments are imperative.
Given the 20-25-year life time of a vessel, the company says it is now time to join forces and start developing the new type of vessels that will be crossing the seas in 2050.

Supply chains must address climate change, child labour

Less than a quarter of global businesses address climate change and child labour in their supply chains, an EIU study has found.

  • Four in five executives claim their companies have a responsible supply chain.
  • Yet 30% of firms have decreased their focus on supply chain responsibility over the past five years.
  • Only 27% of firms are willing to cooperate with non-competitor firms to raise supplier standards, and even fewer (23%) are willing to cooperate with competitors.

A new report released by The Economist Intelligence Unit (EIU) finds that progress in raising ethical standards in global supply chains has stalled in many places. Although companies generally describe their supply chains as responsible and recognise a direct link with brand reputation, the research finds that few address issues such as climate change, child labour and gender equality.
The report, No more excuses: responsible supply chains in a globalised world, sponsored by Standard Chartered Bank, finds that issues for which it is relatively easy to demonstrate quantifiable short-term risks and benefits/opportunities (such as health and safety risks and waste reduction) receive more attention from firms than less tangible longer-term ones such as climate change. Issues that only affect a sub-set of people, such as child labour and gender equality, also appear to be side-lined.
More positively, four in five respondents said their companies address general problems in their supply chain ‘well’ or ‘very well’, and almost all respondents said their companies’ standards are compliant with or more stringent than those of governments (94%) or industry watchdogs (97%), respectively. This indicates a degree of complacency given that many key issues are still overlooked. The study concludes that a failure to acknowledge the risks and lack of understanding among companies of their own supply chains is not a positive result. Companies should think long-term and build a business case for more transparent, sustainable and socially-inclusive supply chains.
This report, together with Sourcing Transparency: Who should clean-up supply chains? — a mini-documentary produced by The EIU — launched at the CEO Agenda event in Johannesburg, South Africa as part of the Growth Crossings series. The event is available for viewing on live-stream and it brings together global executives to examine strategies that companies can use to succeed in an increasingly isolationist world, and identify emerging trends that will shape the future of industry.
With its global premiere at the CEO Agenda event, Sourcing transparency looks at how policy makers and companies are paving the way in creating more transparent and responsible supply chains.
In addition, Supply chains: a collective responsibility includes video interviews with such globally-renowned experts as professor Richard Locke, provost at Brown University, to understand how supply chain complexity has created a need for the private sector to better regulate itself.
Download No more excuses: responsible supply chains in a globalised world
Watch Sourcing transparency: Who should clean-up supply chains?
Watch Supply chains: a collective responsibility

Act now or pay dearly: OECD

The Organisation for Economic Cooperation and Development (OECD) has released its 2008 Environmental Outlook Report: "How much will it cost to address today’s key environmental problems?"

"Solutions to the key environmental challenges are available, achievable and affordable, especially when compared to the expected economic growth and the costs and consequences of inaction", OECD secretary general Angel Gurria said at the worldwide launch of the 2008 OECD Environmental Outlook in Oslo, hosted by Norway’s prime minister, Jens Stoltenberg.

"The outlook is an impressive body of work. It combines hope for the future with an urgent call for action today. It offers important guidance for decision-makers and integrates economic and environmental analysis", said prime minister Stoltenberg.

The 2008 OECD Environmental Outlook  is a pathbreaking report that marries economic and environmental projections for the next few decades and simulates specific policies to address the key challenges. It identifies four priority areas where urgent action is needed: climate change, biodiversity loss, water scarcity and the impact on human health of pollution and toxic chemicals.

Economic-environmental projections show that world greenhouse gas emissions are expected to grow by 37% to 2030 and by 52% to 2050 if no new policy action is introduced. To meet increasing demands for food and biofuels world agricultural land use will need to expand by an estimated 10% to 2030; 1 billion more people will be living in areas of severe water stress by 2030 than today; and premature deaths caused by ground-level ozone worldwide would quadruple by 2030.

"Countries will need to shift the structure of their economies in order to move towards a low carbon, greener and more sustainable future. The costs of this restructuring are affordable, but the transition will need to be managed carefully to address social and competitiveness impacts, and to take advantage of new opportunities", Secretary-General Gurría said. (read the complete speech)

The 2008 OECD Environmental Outlook projects that world GDP will almost double by 2030. And the OECD policy simulation shows that it would cost just over 1% of that growth to implement policies that can cut key air pollutants by about a third, and contain greenhouse gas emissions to about 12% instead of 37% growth under the scenario without new policies.

OECD recommends the use of policy mixes, and to keep the costs of action low these should be heavily based on economic and market-based instruments. Examples are the use of green taxes, efficient water pricing, emissions trading, polluter-pay systems, waste charges, and eliminating environmentally harmful subsidies (e.g. for fossil fuels and agriculture). But more stringent regulations and standards (e.g. for transport and building construction), investment in research and development, sectoral and voluntary approaches, and eco-labelling and information are also needed.

Mr. Gurría said that technological developments will also contribute to the solution but that the generalised application of breakthrough technologies poses important challenges in the area of intellectual property rights that will have to be confronted.

The Outlook identifies ways to share the cost of policy action globally. Developed nations have been responsible for the majority of greenhouse gas emissions to date, but rapid economic growth in emerging economies – particularly Brazil, Russia, India and China – means that by 2030 the annual emissions of these four countries together will exceed those of the 30 OECD countries combined.  Fair burden-sharing and distributional aspects will be as important as technological progress and the choice of policy instruments.

"We must be aware that getting it right in the field of the environment is not only about what to do and how to do it. We also need to address the question of who will pay for what. The global cost of action will be much lower if all countries work together", Mr. Gurría underlined.

The clock is ticking

Climate change will have overarching impacts on Australian businesses, and fully grasping the imminent challenges will be the key to success in a “brave new carbon-constrained world”, a report has said.

Professional services firm Deloitte has released a report, Helping you to understand the climate change Green Paper, which identifies the key issues, interprets the impacts, and articulates how to develop an appropriate response to the carbon economy.

“The Carbon Pollution Reduction Scheme will fundamentally change the economic environment,” said Deloitte Australia’s chairman Wayne Goss.

“However many Australian businesses are still at the early stages of understanding exactly how these changes will affect them.”

Mr Goss said climate change is no longer just an issue for the environmental or sustainability team, but it applies to every level of management whether it is tax, supply chain, corporate governance or reporting.

“Climate change is about to become an everyday business challenge with far reaching implications across the organisation and it will therefore be elevated to the agendas of every board,” he said.

Jon Stanford from Deloitte Economics, who led the firm’s review, said: “Businesses now recognise that the scheme will introduce significant structural change in the economy. It will change relative prices and costs, demand new structures and supply chains, and present opportunities to some sectors and limit others.

“It is now recognised that some organisations will prosper, while others will linger for a while and then disappear. Adaptation and action will be the key to survival in this ‘new world’.”

The report is available at www.deloitte.com.au

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