Context

Western Australian miners are currently investing in decarbonisation to varying extents, with Fortescue identified as the leader in terms of level of investment and ambition. However, this investment is constrained by the unintended distortionary effects of the Fuel Tax Credit (FTC). In the current policy environment, the FTC provides a rebate of approximately A$0.53 per litre to miners for diesel use, which degrades the business case for decarbonisation investment. Under these settings, widespread industry adoption of electrified haulage is delayed until roughly 2035. Cyan Ventures was commissioned by Fortescue to evaluate the economic opportunity of addressing this distortion through a A$50 million FTC cap, alongside the potential impact of Common-User Transmission Infrastructure (CUTI).

Methodology

The research sizing induced decarbonisation investment and its flow-on value to the Western Australian economy follows a five-step methodology. First, researchers modelled the decarbonisation investment induced by a A$50 million FTC cap by comparing the Total Cost of Ownership (TCO) of diesel versus Battery Electric Vehicle (BEV) haulage. Second, they estimated spend-driven value-added by applying ABS Input-Output multipliers to capital expenditure across BEV haulage, renewables, storage, and charging. Third, additional uplift from operational savings was calculated by estimating diesel and maintenance savings over the asset lives of the deployed BEV cohort. Finally, the study measured the additive contribution of CUTI by estimating spend-driven value and additional uplift from avoided duplicative transmission costs.

Decarbonisation investment induced by the $50m FTC cap

The application of a A$50 million FTC cap is projected to accelerate industry-wide BEV adoption by bringing forward fleet-replacement economics by approximately six years. For the average industry-wide fleet, this improves the relative economics of BEVs over 2027 and 2028, with the first scaled deployment estimated from 2029. Under current settings, adoption is delayed until 2035. The induced investment package totals A$5.6 billion between 2026 and 2035. This consists of A$3.0 billion for vehicles (representing approximately 290 cumulative BEVs), A$2.4 billion for dedicated renewables and supporting battery energy storage systems (BESS), and A$0.2 billion for charging infrastructure. Renewables are sized to meet BEV operating power demand and apportioned only to the BEV fleet.

Spend-driven value-added from decarbonisation investment

The A$5.6 billion in decarbonisation investment creates approximately A$0.8 billion of spend-driven economic value for Western Australia. Value capture varies significantly by stream; vehicle capital expenditure is large at A$3.046 billion but is import-heavy, meaning only 3.4% of its value (A$103 million) is retained in the state. Conversely, renewables and storage capital expenditure of A$2.382 billion creates the most spend-driven value at A$647 million, with an effective WA value coefficient of 27.1%, because it includes local civil works, construction, and services. Charging infrastructure contributes a further A$17 million. Across the total A$5.6 billion package, the blended WA value coefficient is 13.6%.

Additional uplift from operational savings

BEV haulage creates substantial operating savings by removing exposure to diesel fuel and carbon costs. In 2026, BEV haulage operating costs are estimated to be approximately 25% lower than diesel under a A$50 million FTC cap, equating to a saving of roughly A$130 per hour. By 2035, this saving is expected to rise to approximately A$186 per hour. Recurring operating benefits are calculated based on 7,000 operating hours per year per truck. Within the 2026 to 2035 investment window, these savings total A$1.4 billion. However, because BEVs deployed by 2035 continue to operate beyond the model window, post-2035 operating savings create an additional A$4.9 billion in value over a remaining cohort life of approximately 13 years.

Decarbonisation induced by a $50m FTC cap creates A$7.1bn of WA economic value

The total economic value created from the initial investment and ongoing operating savings totals A$7.1 billion. Most of this value stems from recurring operating savings (A$6.3 billion combined across both windows), while capital expenditure creates the initial A$0.8 billion during deployment. This uptake supports roughly 4,600 cumulative investment-phase FTE-years through BEV haulage, charging, and dedicated renewables deployment. Furthermore, the transition drives approximately 3.1 MtCO2e of cumulative abatement within the 2026 to 2035 window, rising to roughly 13.1 MtCO2e across the full remaining asset life. Annual abatement is expected to reach 0.8 MtCO2e by 2035, once BEVs are deployed across approximately 46% of the average industry-wide fleet.

Common-user transmission infrastructure investment and value

Investment in CUTI for the Pilbara is estimated at A$4.4 billion. This is modelled as an additive investment that supports coordinated electrification. Most of this capital expenditure is driven by new node links and renewable generation hub links (A$3.4 billion), with additional funds for link upgrades (A$0.5 billion) and station terminals. This investment is highly retentive for the WA economy, creating A$2.0 billion in spend-driven value with an effective coefficient of 45.3%, as most spend is mapped to local civil and electrical works. Additionally, CUTI is projected to avoid A$4.2 billion of duplicated transmission costs over 25 years by comparing a coordinated build against an ‘autarky’ model of individual miner-led networks.

With CUTI in place, total WA economic value from Pilbara decarbonisation rises to A$13.2bn

When CUTI is pursued in tandem with decarbonisation, the total WA economic value increases to A$13.2 billion. This includes the A$7.1 billion from the core decarbonisation case plus A$6.2 billion in additive value from CUTI construction and transmission-only savings. Total cumulative investment-phase employment rises to approximately 16,800 FTE-years, including roughly 12,200 incremental FTE-years specifically from CUTI development. While CUTI amplifies financial value and employment, the carbon abatement remains consistent with the core BEV uptake case at approximately 13.1 MtCO2e over the asset life of the cohort.