Construction relies heavily on diesel-powered plant, mobile equipment and temporary site energy systems. For this part of the sector, low carbon liquid fuels (LCLFs) are one option for reducing emissions while electrification, battery-electric equipment and lower-emissions site design continue to develop.
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Construction at a glance
10% of Australia’s emissions
Embodied carbon from buildings and infrastructure makes up about 10% of Australia’s national emissions. Upfront carbon alone makes up 7%. Upfront carbon is the emissions released before an asset is used, from producing materials, transporting them and carrying out construction.
Up to 64 Mt of upfront carbon a year
Australia’s pipeline of infrastructure and building projects is forecast to release 37 to 64 million tonnes of carbon dioxide equivalent (CO₂e) in upfront carbon each year over the five years to 2026–27, or up to 247 million tonnes in total.
39.1 PJ of energy a year
The construction industry uses around 39.1 petajoules of energy annually, expected to grow 2.2% annually.
Over 75% of heavy machinery runs on diesel
Diesel combines high power density, strong performance and reliability, which makes it the preferred fuel for heavy machinery on construction sites.
How construction is reducing emissions
Decarbonisation of the construction sector involves a combination of measures rather than a single solution.
Efficient plant and engines
New, more efficient diesel machines are able to offer efficiency gains over older machines as well as better emission control technology.
Operational improvements
Reducing idling time of equipment on construction sites can help reduce fuel consumption and reduce emissions. Construction equipment is idle on site around 25% of the time and trucks are idle 50% of the time.
Electrification of light plant
Electrification has the potential to reduce construction carbon dioxide emissions. However, power availability, duty cycles and utilisation can make rapid full electrification difficult across all projects.
Drop-in low carbon liquid fuels
Reducing idling time of equipment on construction sites can help reduce fuel consumption and reduce emissions. Construction equipment is idle on site around 25% of the time and trucks are idle 50% of the time.
Low carbon liquid fuels for construction
Across much of the sector, the dominant liquid fuel remains conventional diesel. Australian construction guidance increasingly treats low carbon liquid fuels as a practical near-term decarbonisation strategy while electric alternatives continue to scale.
Renewable diesel
A diesel-equivalent hydrocarbon fuel produced from oils, fats and residues through hydrotreating (HVO/HEFA) or through synthetic pathways (PtL). Chemically and functionally different from biodiesel.
How it can fit in construction
Often seen as the strongest near-term drop-in low carbon liquid fuel for existing diesel construction fleets
Considerations
It can align with paraffinic diesel specifications and may be suitable for some existing engines, subject to original equipment manufacturer (OEM) approval and operating conditions.
Biodiesel and fatty acid methyl ester blends
A liquid fuel made by reacting fats or oils, such as vegetable oils, used cooking oil or tallow, with an alcohol.
How it can fit in construction
May offer a lower-carbon substitute or blend component for diesel construction applications.
Considerations
Usually requires closer attention to blend limits, storage, maintenance practice and OEM requirements.
Life-cycle emissions benefit
The emissions benefit of a low carbon liquid fuel used in construction is assessed across the full fuel life cycle, including feedstock production or collection, fuel conversion, transport and distribution to depots or project sites, on-site storage and refuelling, and use in construction plant and equipment such as excavators, loaders, cranes, compressors and generators.
For drop-in renewable diesel-type fuels the International Renewable Energy Agency (IRENA) reports well-to-wake greenhouse gas reductions of around 60–90%, depending on the feedstock and conversion pathway, compared to conventional diesel.
On-site fuel handling
On construction sites, fuel handling is planned around live plant movements, temporary compounds and changing access routes. Temporary site tanks must be secure, clearly labelled, bunded and positioned away from drains, excavations and high-traffic areas. Mobile refuelling keeps excavators, generators, pumps and other equipment operating efficiently, but should be carried out by trained personnel with spill controls and accurate issue records.
Regular on-site fuel quality checks help identify water, sediment or contamination before they cause downtime, while original equipment manufacturer (OEM) and hire-company approval should be confirmed before switching fuels. Liquid fuels should be stored and labelled separately where required, with fuel specifications, cold-weather performance and compatibility clearly documented.
How fuel moves through the construction industry
Supply & refining
Delivery to site
Secure site storage
Quality checks on site
Controlled fuel
Use in plant & equipment
Construction fuels today
Across much of the sector, the dominant liquid fuel remains conventional diesel. Diesel is widely used in off-road mobile plant and in temporary site equipment such as generators, particularly on projects where grid access, charging access or continuous high-power operation can be difficult. Australian construction guidance increasingly treats renewable diesel as a practical near-term option for diesel plant while electric alternatives continue to scale.
Conventional diesel
Remains the main liquid fuel used in heavy construction plant and temporary site equipment.
Liquid fuels
Remain especially relevant on remote, high-utilisation and heavy-duty projects where electrification is not yet straightforward.
The sector is beginning to assess both battery-electric plant and low carbon liquid fuel substitution rather than relying on a single pathway.
Australia
CSIRO · 2025
Bioenergy Australia · 2025
CSIRO · 2025
International and technical
IEA · 2025
European Union · 2023
IEA Bioenergy Task 39 · 2024
Policy, regulation and technical guidance
The bodies below shape construction fuel policy, regulation, standards and technical guidance. They are grouped by what kind of role they play.
Key construction sector bodies
National industry body representing major contractors and publishing guidance on construction decarbonisation pathways, including renewable diesel and fossil fuel free construction.
Peak industry body for the Australian bioenergy sector, representing producers, technology providers and end-users of low carbon liquid fuels, biogas and bio-based products. Publishes industry strategy, including the Securing our Fuel Future roadmap (Ref 105 on this page’s Resources block).
Peak body for Australia’s civil construction industry and a relevant sector voice on plant, infrastructure delivery and workforce issues.
Peak body for infrastructure sustainability in Australia and Aotearoa New Zealand and operator of the IS Rating scheme used across planning, design, construction and operations.
National WHS policy body whose guidance is relevant to plant safety, diesel exhaust exposure and risk management on construction sites.
Recognised industry organisation representing the European construction equipment sector and engaging on standards, regulation and the sector’s low-emissions transition.
Fuel quality legislation and technical standards
A standards organization that develops and publishes voluntary consensus technical international standards for a wide range of materials, products, systems and services.
Technical standards drafted and maintained by CEN (European Committee for Standardization), CENELEC (European Committee for Electrotechnical Standardization) and ETSI (European Telecommunications Standards Institute)
Policy and incentives
Australian Government bodies, programs and financing institutions that drive low carbon liquid fuel production, deployment and construction decarbonisation policy.
Provides funding and support for low carbon liquid fuel studies, demonstrations and infrastructure work, including construction-related projects.
Sustainability and certification frameworks
Frameworks that govern how fuel’s life-cycle emissions and provenance are assessed, certified and claimed.
Independent global certification scheme covering sustainable biomass, bio-based materials, renewable fuels and circular economy products. ISCC is one of the certification schemes recognised under the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and is widely used across European Union renewable fuel pathways.
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Resources
Browse a searchable collection of trusted reports, roadmaps and case studies.