CEFC tips $150m into logistics park, to slash truck freight emissions

As the federal government remains stalled on policy measures to reduce emissions from Australia’s small vehicle fleet, the Clean Energy Finance Corporation has made a landmark investment in a project that will slash freight truck emissions, by shifting freight transport from road to rail, and powering operations with renewable energy.

The project, which is being led by ASX-listed logistics company Qube Holdings, aims to take 1.55 million freight containers off Australian roads by increasing the use of rail networks to distribute freight to and from Port Botany, in south-eastern Sydney.

The CEFC said on Friday it was committing up to $150 million to the project – called Moorebank Logistics Park – which will begin with the construction of a major intermodal terminal in south-western Sydney, and will incorporate large-scale renewable sources.

While there are no details yet about the type of renewables that will be installed at the Logistics Park site – which is the size of Sydney’s CBD – the resource is expected to generate 65,000MWh/year, enough to power more than 10,000 homes, which suggests a plant of around 50MW capacity.

The finance is being provided to Qube through a seven-year bilateral term debt facility to assist in providing medium-term finance for the staged construction of the intermodal terminal, which is targeting full capacity in 2030.

Once complete, the “nationally-significant” project is expected to reduce freight truck emissions by more than 110,000 tCO2e a year.

Over a 40-year period, the freight and energy efficiencies delivered via the Moorebank Logistics Park are expected to result in net emission reductions of more than 2 million tonnes of CO2-e.

This estimate factors in construction and embodied emissions, offsite transportation, operational emissions and savings from the onsite use of renewable energy. It does not factor in inevitable advances in technology over that 40-year period.

All said, it removes a decent chunk out of one of Australia’s biggest emitting sectors. According to government data, transport emissions made up 17 per cent of Australia’s national emissions in 2016, or around half the emissions of the power sector.

But the data also shows that projected growth in transport emissions are a key driver of emissions to 2020.

“Emissions from road freight transport are a substantial part of our carbon emissions challenge,” said CEFC CEO Ian Learmonth in comments on Friday.

“By switching to rail solutions, the Moorebank project will reduce emissions, reduce urban congestion and improve national freight connectivity for years to come,” he said.

“This project, and others like it, are essential for us to progress down a decarbonisation pathway to net zero emissions by the second half of the century while improving the sustainability of our cities.”

As well as slashing emissions, the switch to rail transport, when operating at scale, will cut an estimated 3,000 truck journeys a day from Sydney’s road network, particularly the M5. It will also reduce the number of regular Sydney-Brisbane and Sydney-Melbourne truck freight trips.

By 2030, Moorebank Logistics Park also is expected to reduce the distance travelled by container trucks on Sydney’s road network by 150,000km a day (56 million kilometres a year); reduce the distance travelled by interstate freight trucks by 93,000km a day (34 million kilometres a year); and deliver net annual carbon emissions savings equivalent to removing 11,000 vehicles.

It is also expected to deliver significant job creation with the precinct employing as many as 6,800 people when operating at full capacity and over 1,300 jobs to be created during the construction phases.

“Our focus at Qube has always been on how we can improve the efficiency of the import and export supply chain, how we can provide a faster and more cost-effective way to get goods to consumers
and the Moorebank terminal is certainly a key part of that strategy,” said Qube’s managing director Maurice James.

“We are extremely proud to be the first transport infrastructure project which the CEFC has chosen to support in this way.

“Being able to deliver a faster and more reliable supply chain that creates savings for our customers, as well as remove thousands of truck trips from our roads at the same time as delivering very
significant environmental benefits is a great trifecta,” James said.

“Through this investment, the CEFC will work with Qube to help influence project engineering, construction and design decisions to tackle some of Australia’s toughest energy challenges, including ambitious energy efficiency and reduced transport emissions,” Learmonth added.

“We’re aiming for the Moorebank Logistics Park to be built to a standard Australia hasn’t seen before, so that it reaps the benefits of built-in efficient technologies throughout its useful life and demonstrates what is possible for the next generation in low emissions transport and freight facilities.”