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How to make your fleet carbon tax ready

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The carbon tax has been one of the most divisive local issues in recent history. It has sparked heated debate in Parliament, in the media and in businesses as Australians seek to understand how they will be affected.

However, given the Senate’s decision to pass the controversial legislation, the time for speculation is over.  Businesses must now develop a solid understanding of how the Clean Energy Act will affect their bottom line.

The carbon tax provides an important milestone in reducing Australia’s emissions. For many fleet businesses, however, the tax is likely to lead to increased fuel costs. While fuel prices will not rise directly, existing fuel tax credits will be reduced across a number of sectors, resulting in some organisations effectively paying a carbon tax on fuel.

It is worth noting that SMBs will still receive fuel tax credits, as will the trucking industry, until 2014. However, the cuts will impact larger organisations in industries such as mining and construction, many of which operate fleets.

In addition to rising fuel prices, companies with fleets are also likely to face indirect repercussions as businesses look to push green efficiencies down the supply chain.

Under the terms of the Clean Energy Act, 500 of Australia’s biggest emitters will pay $23 for each tonne of carbon they emit. Energy, resources and manufacturing industries are likely to be impacted and will need to reduce their carbon footprint. As part of this process we can expect them to examine their supply chain’s emissions, seeking to work with greener businesses to help reduce their overall liability. Therefore, environmental credentials are set to become an important factor in winning new business.

For fleet businesses the time has come to start looking at ways to reduce emissions, thereby reducing tax liability and remaining competitive in the marketplace. Fuel forms the major source of emissions for fleet industries, so tracking and reducing fuel consumption will be high on the agenda.

This is especially pertinent given the Australian Bureau of Statistics’ finding that the average rate of fuel consumption for Australian vehicles is 13.8 litres per 100 kilometres—one of the worst performances of all Organisation for Economic Co-operation and Development countries.

One of the easiest ways to reduce fuel consumption is by providing drivers with the most direct route between jobs. GPS fleet management solutions can help here, enabling fleet managers to provide improved routing details to drivers and track vehicles to ensure that they are adhering to defined directions.

The effectiveness of this strategy can be demonstrated by Rogers Transport, which has reduced fuel consumption by one percent per week since the implementation of the Navman Wireless solution, through improved route efficiency. This equates to a significant saving of 325 kilolitres of fuel per year.

In addition to reducing fuel consumption, businesses with fleets should be looking at other steps they can take to reduce their carbon emissions. These could include educating drivers about green driver behaviour, such as reducing inefficient practices like excessive idling, speeding and harsh braking. Regular vehicle maintenance can also reduce fuel consumption, as well as prolong the life of your asset.

The good news is that the majority of Australian organisations are ready to embrace a low carbon future. In fact, a recent GE survey found that the vast majority (70 percent) of Australian respondents have already implemented strategies to reduce their emissions.

An unclear regulatory environment was cited as the biggest barrier to making further progress. However, with the Clean Energy Act providing clarity around this issue, the time has come for businesses to focus on better fleet management to tackle their carbon footprint.