Australia imports 80 to 90 per cent of its refined transport fuel, on foreign ships, with reserves still short of its ninety-day obligation. Sovereign Australia’s energy policy is the Modern Movement Australia programme: cheap firm domestic power, coal retained until it is undercut on price, Australian oil drilled and refined here, and continental electric freight. Net zero follows as an outcome.
Australia imports 80 to 90 per cent of its refined transport fuel. Stocks have risen — the Commonwealth put diesel at 34 days during the 2026 crisis, its highest in fifteen years — bought with a $14.8 billion package, and still short of the 90-day International Energy Agency obligation Australia has not met since 2012. Japan and South Korea hold more than 200 days. Two refineries remain, both on public support. Australia produces crude, exports about 94 per cent of it, and buys refined product back. About half of diesel imports pass through or originate from refineries exposed to the Strait of Hormuz.
Both refineries run on imported crude. Australian production is mostly light condensate they cannot process, so it is exported and heavier grades are bought in. Combined capacity is about 230,000 barrels a day against consumption near 1,150,000. There is no Australian-flagged refined-product tanker on the register: imports arrive on 80 to 90 foreign-flagged cargoes a month. Diesel imports rose from 11.24 thousand megalitres in 2012 to 29.8 thousand in 2023, and about 91 per cent of diesel is now imported. About 99 per cent of heavy trucks require AdBlue, made from gas-derived urea; urea stock was reported at around ten days during the 2026 crisis.
In early 2026 the Strait was constrained rather than closed. Six product tankers were cancelled or deferred, South Korea capped refined exports, the Commonwealth relaxed diesel specifications and took emergency United States supply, wholesale diesel rose about 67 per cent in two months, and farmers ran out of fuel during the seeding window.
Coal plants are closing to a legislated timetable rather than when replacement capacity exists. The five largest transmission projects are running at roughly 140 per cent combined cost overrun and years behind schedule. Household and industrial power prices carry both.
Australia moves about 178 billion tonne-kilometres a year on articulated trucks running on imported diesel. Road freight costs two to six times more per tonne-kilometre than rail. General freight rail — groceries, manufactured goods, farm produce, fuel — is about five per cent of the national task on a network not seriously expanded in fifty years. One in twelve trucking businesses closed in the year to November 2025, before the 2026 diesel rise.
Sovereign Australia’s energy policy is the Modern Movement Australia programme, delivered by the Sovereign Build Corporation: continental desert solar, an HVDC transmission backbone carried on the corridor structure built for freight and passenger rail, and 40 GW of pumped hydro at the Alice Hub to firm it. Target consumer price: under 10 cents a kilowatt hour. Full detail is published on the MMA site, in the Energy and Oil pillars.
The test is a price, not a fuel. Whatever delivers 10c/kWh gets built. Nothing is excluded by category and nothing is protected by category.
That means no legislated closure dates, and it means new firm capacity where new firm capacity is what holds the price down. If the cheapest way to hold ten cents through the build is coal, coal is what gets built. If it is gas, gas. If it is desert solar with storage — which is where the cost curve is heading — that. The decision is made on delivered cost per kilowatt hour, in public, with the numbers published. The same test retires plant: generation closes when it is undercut commercially, on a date the market sets rather than a date a parliament announces.
Australian liquid fuel demand continues for years. The acreage is opened, tight oil and gas approvals proceed, the two remaining refineries are kept running, and the 90-day reserve is rebuilt on Australian soil with the Liquid Fuel Emergency Act 1984 enforced. Domestic gas carries a reservation policy so Australian industry pays Australian prices.
Exploration, not geology, is the constraint. Dorado, off the Pilbara, was the largest Western Australian oil discovery this century, found in 2018 by a well drilled for gas. Its sub-basin has had about seventeen exploration wells against more than fifteen hundred in the Carnarvon Basin next door, and the Great Australian Bight is untested. Refining then has to match what Australia produces: modular skid-mounted units, built in under a year, configured for light condensate.
Fuel is also grown. About 5.84 million tonnes of canola sat in Australian silos after the 2025–26 harvest — roughly 2.2 billion litres of biodiesel equivalent, or 34 to 37 days of national diesel. Reserving half of each year’s crop for domestic processing yields 1.1 to 1.3 billion litres a year.
One existing subsidy works against all of it. The Fuel Tax Credit refunds excise on off-road and heavy-vehicle diesel at about $10 billion a year, holding imported diesel below its real cost and roughly halving the return on converting a fleet to electric. It is redirected to electrification and domestic fuel production.
An electric vehicle charged on a coal-heavy grid produces about 144 grams of CO2 per kilometre against 191 for the average Australian petrol car, because the electric drivetrain converts energy to motion at over 90 per cent efficiency against 25 to 30 per cent for petrol combustion. Transport electrification does not have to wait for grid decarbonisation.
At 10 cents a kilowatt hour an electric vehicle costs about $270 a year to run against $2,400 for petrol over the same distance — 8.9 times cheaper per kilometre. That closes the purchase premium in three to five years and continues for the life of the vehicle. A rebate is a one-off transfer; the running-cost gap applies to every buyer, every year. No mandate and no purchase subsidy is required.
Continental electric freight on the corridor takes the long haul; road freight becomes the 50 to 200 kilometre run from rail terminal to farm, mine or port. Energy cost falls, the cost is stable because it is not exposed to an overseas chokepoint, and corridor speed competes with road for perishables.
The same generation produces a surplus. Seven subsea multi-service corridors, approximately 32,500 kilometres combined, carry HVDC electricity and fibre from Australia into the Asia-Pacific, with gas, hydrogen or water added where a destination nation requires them. The starter network reaches about 600 million people across seven economies. The Darwin–Singapore route is the Sun Cable alignment, approved by both the Australian Government and Singapore’s Energy Market Authority.
Cable manufacturing, the vessel fleet, converter stations and the regional repair fleet are built and crewed in Australia, using the dockyards and marine workforce commissioned under AUKUS. Electricity sold by cable produces revenue for the life of the asset rather than ending with the shipment.
Liquid fuel follows the same path. Australia currently exports raw energy and imports finished fuel. Once domestic demand is covered, the refining, biofuel, renewable diesel, sustainable aviation fuel, green ammonia and e-methanol capacity built to cover it supplies the same region.
Net zero is an outcome of this programme, not the reason for it. The arithmetic is published on the MMA site: at programme maturity, about 275 to 325 million tonnes a year of domestic emissions retired and sequestered, and a further 455 to 585 million tonnes displaced in Asia-Pacific grids running on Australian electricity. The residual that the programme does not close — about 145 to 195 million tonnes at 2050, in fugitive emissions, agriculture and hard-to-abate industrial chemistry — is stated rather than offset.
The legislated net zero target is repealed and replaced by two measures published quarterly: the price of a kilowatt hour, and the share of transport energy arriving by ship. A statutory date does not build transmission, and it has closed coal plants before their replacements existed.
Electricity and fuel are not two lines on a household budget. They are input costs inside every other line.
Fuel is around 30 per cent of a road freight operator’s costs, and every item in an Australian supermarket arrived on a truck. When diesel rose 67 per cent that did not stay with the trucking industry — it went into the price of food, hardware and clothing. Irrigation is pumping. Refrigeration runs from the farm to the shelf without stopping. Fertiliser, cement, steel, glass, aluminium and processed food are all made with electricity or with heat. The price of energy sets a floor under the price of nearly everything else.
A rebate moves money to a household once, changes the price of nothing, and adds demand. Cutting the input cost lowers prices across the whole basket, and keeps lowering them, without a transfer and without a budget line renewed every year. Electricity first, because that is the price government can act on directly. Fuel second, because cheap electricity converts the fleet, and a converted fleet takes demand out of imported fuel.
At 30c/kWh an electric vehicle is about three times cheaper to run than petrol — enough to interest an early adopter. At 10c/kWh it is 8.9 times cheaper, about $270 a year against $2,400 for the same driving. That is the difference between a niche and a fleet.
Each price step reaches a different buyer: high-mileage operators and rideshare drivers first, then small business fleets, then mainstream private buyers, and at ten cents the second-hand market fills with used electric vehicles, which is what puts them within reach of low-income households.
The same arithmetic moves freight. Diesel for a B-double runs 60 to 80 cents a kilometre; at ten cents a kilowatt hour the electric equivalent is 15 to 20 cents. On a truck covering 500,000 kilometres a year that is $200,000 to $300,000 saved annually, and the purchase premium pays back in two to three years.
An electric vehicle charged on a coal-heavy grid produces about 144 grams of CO₂ a kilometre. The Australian petrol fleet average is 191 grams. The electric vehicle wins by a quarter on coal, because an electric drivetrain converts energy to motion above 90 per cent efficiency against 25 to 30 per cent for combustion. On the current grid it is 76 grams, and it improves every year the grid improves — with no trade-in and no new purchase.
Light vehicles emit about 69 million tonnes a year from exhausts and heavy vehicles about 46 million tonnes. Renewable generation on the grid reaches none of it. A perfect renewable grid that nobody drives an electric vehicle on saves nothing in transport — which is why closing coal early, and pushing power to thirty cents, protects the petrol fleet.
The corridor being built for freight and passenger rail carries the HVDC cables, the water, the gas and the fibre inside the same structure, so transmission is a marginal cost rather than a standalone line negotiated easement by easement. At maturity that means about 1,000 GW of desert solar firmed by 40 GW of pumped hydro — more firm dispatchable capacity than Australia’s entire current coal fleet.
The project-by-project alternative is delivering as follows: HumeLink 190 per cent over budget, from $1.1 billion to $3.3 billion. Marinus Link 250 per cent, from $1.1 billion to $3.8 billion. Project EnergyConnect 84 per cent, from $2.23 billion to $4.1 billion. Five major transmission projects are running at roughly 140 per cent combined overrun. On freight, Inland Rail cancelled its northern half in 2025 and the completed segment is diesel-only.
Generation and transmission go in the desert, not on farmland. The interior resource runs at 2,400 to 2,800 kilowatt hours per square metre a year against 1,600 to 1,800 in the coastal zones now being developed, on Crown land with no residential communities in the transmission path.
Getting off imported fuel is the defensive half. The surplus is the other half: roughly 82.5 GW continuous, about 650 terawatt hours a year, exported into Asia-Pacific grids over seven subsea corridors totalling around 32,500 kilometres, HVDC and fibre standard. The Darwin–Singapore leg follows the Sun Cable alignment already approved by both governments.
The global fleet of HVDC cable-lay vessels numbers fewer than two dozen ships, so a network this size builds its own. Australia does not need a new industrial base for it — it uses the one AUKUS is already commissioning. Repositioning that programme wastes none of the investment: the dockyards, the heavy fabrication, the trained workforce and the bilateral supplier relationships all stay, and only the output mix changes. Heavy fabrication runs at Newcastle, Whyalla and the Australian Marine Complex at Henderson.
The same production line makes land transmission cable and subsea export cable. The same steel line makes continental pipeline and subsea pipeline. The same converter assembly serves land substations and subsea landing stations. That cross-use is what delivers the programme’s 95 per cent sovereign content target — and it is the answer to what the shipyards build after the submarine procurement cycle ends.
China switched fastest and did it in this sequence. Government built the infrastructure over four decades: a 162,000 kilometre rail network, about three quarters of it electrified, with more than 70 per cent of non-urban rail kilometres electric. Rail freight is around thirty times less oil-intensive than road. The International Energy Agency’s comparison is that the oil saved by Chinese non-urban rail in a single year exceeds the oil displaced globally by every battery-electric car on the road worldwide. Electric and plug-in vehicles then reached a record share of Chinese new car sales in 2026 — above 60 per cent — while purchase subsidies were withdrawn and a tax on those vehicles was reintroduced.
Memo 10 — Energy Independence & Australian Productivity. The full case: the fuel position, coal and domestic oil through the transition, prices and productivity, the China comparison, the export network, and the emissions outcome. With sources.
Memo 15 — Australia’s Energy Future. The sequencing case: price first, then fleet turnover on economics, then reduced fuel imports, then emissions. With the coal-grid arithmetic, the freight economics, the export network and the manufacturing base.