8 OCTOBER 2026

Welcome to our news round-up. See previous issues here.

–––––

WAR HAS CHANGED THE ECONOMICS OF EV MINING TRUCKS IN THE PILBARA

Excellent to see the AFR feature Cyan Ventures new report by Pulkit Athavle and Shaun Chau detailing modelling that shows the near doubling of global diesel prices due to Trump's open-ended war on Iran has made electric vehicles cheaper to run than heavy diesel trucks on mine sites, potentially clearing a key barrier to faster adoption of the technology in the Pilbara.

The war has shown the massive energy security risks for Australia as the world's largest importer of diesel globally even as fossil fuel hyperinflation is reshaping the economics of decarbonising the operations of the country’s biggest mining firms at BHP and subsitute and Rio Tinto, showing the pivot to domestically sourced clean energy by Fortescue is paying immediate dividends.

The research has prompted the West Australian government to dial up pressure on miners to speed up their plans to cut emissions in Australia’s north-west as a way to shore up energy security, while Andrew Forrest’s Fortescue said it showed electrification should be accelerated in the region.

Cyan Ventures found diesel-powered mining vehicles were 13% per hour cheaper to run than battery electric trucks in September 2025, with diesel costing $1.14 per litre. However, that cost saving evaporated by September 2026, with EVs 5% cheaper to run than diesel haul trucks as prices surged to $1.91 per litre after the conflict restricted the flow of oil through the Strait of Hormuz. Report co-author Shaun Chau concludes: “On our modelling, battery electric vehicles are cheaper than diesel haul trucks at current diesel prices.”

WA Energy Minister Amber-Jade Sanderson said the modelling was proof for the miners that the up-front price of decarbonisation would be offset by cost savings and improvements to fuel security: “This confirms all the independent evidence that we have, which is that decarbonising is energy security, but it’s also going to save billions of dollars for industry in the medium and long term. Decarbonising and accessing common user transmission infrastructure is the more commercially sensible approach.”

Matt Pollard argues in Climate Energy Finance’s report for a $50m cap to the imported diesel fuel subsidy and substitute and a fiscal pivot to incentivise capital deployment in domestic clean solutions.

The AFR’s Jessica Sier went to XCMG’s factory in Xuzhou to experience first hand the autonomous and EV mining trucks that CEF visited in June with the SEC / RECAP / Austrade Australian cleantech delegation, and again in our site visit to Inner Mongolia in July 2026. This followed the AFR’s Tom Rabe insightful interview with XCMG Chairman Yang Dongsheng, who visited Perth as a guest of Fortescue’s Chairman Andrew Forrest as part of the massive Chinese delegation attending the Boao Forum in Perth. CEF had the privilege of speaking at this event. Seeing is believing. The change is coming, the only question is will BHP and Rio Tinto embrace this opportunity, or be left behind?

–––––

HOW DUMB CAN YOU GET: LATEST ENERGY ‘POLICY’ FIASCO FROM UNREFORMABLE COAL-ITION

The Coalition’s Dan Tehan’s recent release of its latest excuse for an energy policy was met with universal howls of derision. Amongst disingenuous references to affordability and reliability, it included:

1. Repeal the Climate Change Act 2022 and legislated net-zero emissions targets

2. Remove the Safeguard Mechanism

3. Repeal the New Vehicle Efficiency Standard Act of 2024

4. Revoke four offshore wind energy zones

5. Repeal all Federal legislative prohibition on nuclear energy, clearing the way for Australia to evaluate it on its merits (where it will fail anyway)

Zero solutions or alternatives.

The only thing the resurrection of this moribund joke of a ‘policy’ would achieve is sending Australia back into the energy dark ages and creating massive sovereign risk for investors.

It would punish Australians already suffering from the cost of living crisis caused by skyrocketing fossil fuel energy bills, drive soaring carbon pollution, derail the considerable progress that has been made on transitioning Australia to clean, cheap, reliable firmed domestic renewables, destroy the incredible momentum we are seeing on EV takeup, lock in our dependency on foreign oil and vulnerability to energy shocks, and waste time on the nuclear Australia scam in the midst of a climate crisis.

This iteration of the Coalition’s energy policy pamphlet belongs in the bin fire with the previous iteration. 

The Coalition has pivoted again to capitulate to the vested interests of their fossil fuel funders, actively working to replicate Trump’s undermining of the climate science and continuing to externalise the rising costs of carbon pollution onto everyone else, particularly future generations.

This climate science denialism and fossil fuel lobby capture creates sovereign risk for Australia by massively increasing investor risks. Policy uncertainty, such as the potential dumping of net zero under any future Coalition government, reduces capital investment in our country, with less investment in our energy system in turn reducing new energy supply and raising energy costs for consumers and industry. 

The Coalition’s plan is radically misaligned with our key Asian trade partners, all of whom are committed to the Paris Agreement and collectively dealing with the escalating cost of more extreme and more frequent weather events as they progress their economy-wide decarbonisation. 

This will make the 2028 Federal election yet another referendum on whether Australia will stay in alignment with the global consensus of the Paris Agreement and the climate science. This alignment is imperative to ensure Australia’s energy security and prosperity in the emerging net zero world economy.

Naturally, the fossil fuel lobbyists are out in force to back-in this nonsense – whether emanating from the shambolic Coalition or from One Nation. See for example the AFR platforming ex-LNP staffer/MCA lobbyist Patrick Gibbons of Orizontas. 

He quotes the fossil fuel database the "2026 Statistical Review of Energy" to claim that “across Australia’s key trading and strategic partners, fossil fuels and nuclear power together still account for the vast majority of total energy supply…: "In South Korea it is 96.8%. For India, 94.5%; the US 92.8; Japan 92.0%; China 90.9%....”

But all these percentages are for "energy in" (Primary Energy Consumption), not useful energy out. Two-thirds of "energy in" to an Australian coal power plant is waste energy used to heat the steam and waste water ponds. For plants burning gas, half the "energy in" is waste heat. In a petrol car, the share of useful energy out (the energy that moves the wheels) is only 16% to 25%. The Statistical Energy Review has for decades promulgated this Primary Energy Consumption fallacy, saying that almost 100% of the energy in for renewable energy and hydro is "useful energy out" so as to inflate the scale of the task of decarbonisation and make it look daunting or insurmountable. Climate science denialism moves to climate science delay.

But don’t take our word for it. The International Energy Agency (IEA) Age of Electricity report released in September makes 'useful energy out' the centrepiece of its informed analysis (more on this below).

On nuclear, Gibbons states that India targets 100GW of nuclear by 2047, as though this has any credibility when its operational nuclear capacity in 2026 is 8.78GW, and it has only added 2GW in the last decade, despite 100% open-ended government funding (zero private capital), decades of investment and no legal barriers. His assertion that Australia has 30% of the world’s known uranium reserves fails to note that we do not have a base of engineering knowledge or supply chains to produce nuclear energy here, nor does it mention the other barriers that make a nuclear Australia a prohibitively expensive pipe dream designed to distract from and delay our renewables transition, already well underway.

>>> See Tim’s commentary on the Coalition’s energy policy release in an interview on AusBiz, and in Renew Economy, Pearls & Irritations, and PV Magazine.

>>> See Ben Potter in The Energy: Debunking the Primary Energy Fallacy

–––––

BELL BAY RESCUE: ALUMINIUM PRICE RISK-SHARING APPROACH SAVES THE DAY

The federal and state governments last week jointly committed up to $200m over 5 years to support the continued operation of Rio Tinto's Bell Bay Aluminium smelter in Tasmania's north. Rio Tinto had long threatened closure of Bell Bay Aluminium with the impending end of its electricity supply contract.

The deal, which includes a new power supply arrangement with Hydro Tasmania, provides financial security for Australia's ongoing aluminium production capability over the medium term, protecting our national security and sovereign manufacturing capacities, and secures employment for the 550 staff. This is particularly important for this region given the collapse and liquidation of global fraudster Sanjeev Gupta's manganese smelter Liberty Bell Bay, devastating the local community.

Federal Industry Minister Tim Ayres said the "The Albanese Government is backing Australian industry, Australian workers and Australian manufacturing by securing Bell Bay Aluminium smelter while a future plan for the Bell Bay region is worked through”. 

The joint investment "provides certainty for the workers, their families and the businesses that rely on its ongoing operations".

CEF applauds the aluminium price risk sharing approach of this bailout, in which taxpayer support only applied when profitability is challenged by weak prices. The aluminium price has risen 10-20% since Trump's war on Iran took out a lot of middle east aluminium capacity, with the London Metal Exchange price currently sitting at $3,223/t.

As Tasmanian Energy Minister Nicholas Duigan said: “When prices are high like they are now, there’s no level of support. Should over the course of the five years aluminium prices fall to levels where it makes it challenging for the smelter that’s when that support will kick in.”

This follows the August 2026 10-year $2.5bn joint Federal-NSW Government package for Tomago Aluminium, where this public investment is set to enable the construction of >3GW of new firmed renewable energy infrastructure, given the pending end-of-life coal plant closure. Rio Tinto’s Boyne aluminium smelter at Gladstone in Queensland received a $2bn federal-state bailout earlier this year.

As CEF has long written, the bailout merry-go-round must stop, but public financial support is needed until we get an effective price on embodied decarbonisation in Asian trade, to extend and leverage the EU/UK ETS and carbon border adjustment mechanism (CBAM). See CEF’s Matt Pollard’s report on this: "A Price on Carbon: Building Towards an Asian CBAM: A focus on the harmonisation and integration of carbon pricing mechanisms in Asia-Pacific for the steel, aluminium and cement value chains." 

>>> Hear Tim on ABC’s The World Today on the Bell Bay bailout.

–––––

TRANSITION-DRIVEN ENERGY EFFICIENCY BOOST CUTS ENERGY USE 20% PER DOLLAR OF GDP

Good news last week from the Department of Climate Change, Energy and Water’s Australian Energy Update: a massive increase in energy efficiency helped along by factors including the rise in zero-emissions energy generation displacing thermally-inefficient fossil fuel electricity generation, a surge in EV takeup and a shift away from highly energy-intensive industries has produced a decline in overall energy use of nearly 5% over the last decade.

In other words, the energy intensity of the Australian economy has reduced over time, boosting productivity as economic growth in Australia outpaced growth in energy consumption (Figure 1). Per dollar of GDP, Australia uses 20% less energy than a decade ago. If there ever was a case for Electrifying Australia, this is it. We accept this also highlights the progressive, ongoing hollowing out of Australian manufacturing, a trend the Albanese government’s FMIA is focussed on reversing.

Electrifying Australia and the world 

The continued shift towards greater energy efficiency underpins Climate and Energy Minister Chris Bowen's COP31 strategy to electrify 35% of the world’s economy by 2035 as part of his role as the global head of climate negotiations.

As Minister Bowen writes in the foreword to the new IEA report, The Age of Electricity, "Electrification offers many benefits at once: it strengthens energy security, supports economic development, improves affordability and lowers emissions. …The global energy shock has prompted many countries to seek ways to strengthen energy security, while still delivering affordable and reliable energy. Electrification acts on each of these challenges, while also supporting economic growth and lowering emissions.”

The IEA notes in its report that “the last decade has seen an acceleration in the global deployment of many technologies related to electrification. This includes those used where demand is growing rapidly (like air conditioners and data centres), and those that facilitate the electrification of multi-fuel end-use sectors (like electric vehicles and heat pumps). This trend has been reinforced by rising levels of investment in key supporting technologies, notably grids and storage. Innovation and manufacturing advances have led to sharp price declines and improved performance for critical technologies such as batteries, boosting market uptake. This increase in deployment has been underpinned in many regions by policy support, motivated by concerns about energy security, climate change and industrial strategy.”

–––––

ENERGY SYSTEM CHANGE IN AUSTRALIA 

The rate of energy system change across the board in Australia is phenomenal – think booming rooftop solar and home battery installs, booming utility scale battery energy storage systems (BESS), record high new energy vehicle sales. 

The electrification of the passenger vehicle fleet continues apace. Figures released last week by the Electric Vehicle Council showing increasing momentum:

• 157,957 EVs sold in the first half of 2026, up 117% on the same period last year.

• By June, EVs made up 25.8% of new light-vehicle sales, more than double the 12.1% share of a year earlier.

• Buyers now have more to choose from too. 196 models are available in Australia, up 28% in a year, including 125 battery electric and 71 plug-in hybrid options.

Petrol and diesel vehicles combined accounted for less than half of new car sales in Australia for the first time in August 2026, driven by the economics. Yet it’s clear where the gaps remain. Electric truck and van sales still sit under 1% of their markets.

CEF calls for a $50m per company pa cap on the rebate, with any amount exceeding that cap deployed into electric haulage or renewables infrastructure, or foregone by the claimant. Cyan Ventures models that a $50m annual cap would create $7.1 billion of value add for Western Australia, by unlocking $5.6 billion in additional investment by 2035. 

As for CER, home battery installs are running at 2,000 installs per day, totalling ~14GWh since the federal Cheaper Home Battery scheme was launched in June 2025. This has been complemented by a massive rooftop solar installation acceleration, up a third on previous years, to put Australia on track for 4GW in CY2026. With Minister Bowen moving to unlock C&I rooftop solar from 1 October, this should accelerate to ~5GW pa. Utility scale BESS is booming too, with Australia the #3 market in the world. Modo Energy’s benchmark capacity data shows 8,610MW / 19,271MWh of utility-scale BESS installed across the NEM, treble that of just 12 months ago. Trebling undermines claims Australia is not moving fast. 

But utility scale generation installs need to double to replace increasingly unreliable end-of-life coal clunkers. We need coal plant closure certainty. 

There is movement on this front, with FID on the ninth wind farm across Australia since the end of the wind investment slump late last year, and the biggest in two years  – Atmos Renewables' 470MW Parron Maam Marang project 200kms north of Perth. This follows the UK-based Foresight Group FID on the 130MW first phase of its Kondinin wind project in WA, and the July 2026 announcement that China's Envision Energy will supply the 23 7.8MW turbines for Neoen Australia’s 179MW Narrogin wind farm in WA. These FIDs follow earlier construction starts in CY2026 at Tilt Renewables' Waddi (108MW) in WA, Tilt's Palmer (258MW) and Aula Energy's Carmody’s Hill (256MW) in SA and the SEC Victoria Delburn (205MW) in Victoria.

While progress is being made nationally under the leadership of Chris Bowen, and in WA under Premier Roger Cook and Energy Minister Amber-Jade Minister Sanderson, on the other hand there is the train-wreck in Queensland under the LNP Premier David Crisafulli. In NSW, we see the abrogation of social responsibility by Origin Energy CEO Frank Calabria, who last week shamefully announced that Origin would not proceed with its proposed 870MW Skye Ridge Wind Farm project in New England – a demonstration that Origin is entirely unwilling to invest in replacement generation capacity ahead of the inevitable closure of its 2.8GW Eraring coal clunker. 

The Superpower Institute’s Open Electricity tracks National Energy Market renewables share at a record 47.1% moving-annual-total to 5 October 2026. This is up 4.5% share points in a year, but the rate of increase is not yet aligned with 82% renewables by 2030. We need China speed, China scale, now!

–––––

IN CHINA, SOLAR CAPACITY SURPASSES COAL AS EMISSIONS DROP

Solar capacity has surpassed coal as China’s largest power source. As of July 2026, China’s installed solar power reached 1,288GW, becoming the country’s largest power source for the first time ahead of coal power capacity of 1,285GW (NEA, via Reuters/SCMP). In August 2026, solar remained the top source of new capacity added. CEF notes capacity is very different to generation, given coal plants in China run on average 46% of the time, whereas solar runs a capacity utilisation rate of just 15%.

Indicators show a broad-based drop in China’s CO2 emissions in August – the second consecutive year of decreases. China is progressing well ahead of its 2030 emissions peak target. 

Analysis by CREA and Carbon Brief indicates China’s CO2 emissions fell by 1% in the second quarter of 2026. Notably, China’s emissions fell for the first time due to lower oil consumption driven by the electrification of transport. Citing data from the China Automobile Dealers Association, Xinhua reported new energy vehicles (NEVs) reached a 65.2% penetration rate in August 2026. Charging volumes surged, with 24.22 million EV charging facilities nationwide, up 39.6% year-on-year (NEA). Electric heavy-duty truck sales rose 77% in the quarter, accounting for over 45% of new sales, while diesel demand in construction and mining fell sharply. CREA estimates EVs displaced 36 million tonnes of oil equivalent in H1 – exceeding the UK’s six-month oil consumption.

Since 2000, China’s electrification rate has climbed rapidly from 11% to over 30% in 2025. Southeast Asia's electrification rate has also risen rapidly, supported by the expansion of advanced manufacturing and reduced use of traditional biomass – Figure 4.

In much of the world, including many countries in Africa, Asia, and Latin America, the deployment of electrification-related technologies is accelerating. Many countries, notably in Africa and Asia, have seen sharp rises in imports of electrification technologies from China in 2026 (IEA, The Age of Electricity).

Figure 4: Electricity consumption as a share of total final energy, by sector and by region, 2000-2025

Source: IEA, Electrification Special Report, September 2026, https://www.iea.org/reports/electrification

>>> Read Tim’s take on how China’s changing steel sector could leave Australian iron ore behind and what we need to do about it, in Dialogue Earth

–––––

OUR MEDIA |

See all of our media here. 

OUR WORK |

See more of our latest work, including presentations on global decarbonisation and capital shifts.

PREVIOUS NEWS UPDATES |

Our previous newsletters covering major energy news can be accessed here. 

–––––

AJ for Tim, Matt, Li and Fatima

If you wish to be removed from this email list, please just let Annemarie know any time or unsubscribe at the link below. 

This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.