Don’t wait for electric tractors: is there a case for electrification in Australian farming?

Australian farmers may be years away from following miners into battery-powered heavy vehicles, but the current fuel squeeze is putting a more immediate question on the table: what equipment on the land can move off diesel now?

Fuel supply disruption has pushed the issue into sharper focus, with the federal government saying global events are hitting supply chains, particularly in regional areas and in sectors including agriculture, transport and maritime. 

Canberra has responded by cutting minimum stockholding obligations by 20 per cent, making up to 762 million litres of additional diesel and petrol available to the market, while also moving to relax diesel standards for six months to lift supply.

For farming, that does not suddenly make electric tractors a near-term reality. But it does strengthen the case for switching some pumps, cooling systems, hot water and smaller vehicles away from diesel where the economics stack up. 

Agriculture deeply reliant on diesel 

Australia’s agriculture sector remains deeply tied to diesel. A NSW Department of Primary Industries report found Australian agriculture consumed 85.9 petajoules of diesel in 2019, equal to 2,225 megalitres, and said diesel made up more than 80 per cent of the energy consumed by agriculture in NSW and nationally.

The same report says a small share of high-power systems, which are used only occasionally, are likely to stay diesel for the foreseeable future.

A different path from mining 

Mining is already further down the electrification track. In May 2024 BHP and Rio Tinto announced they would collaborate on trials of large battery-electric haul trucks in the Pilbara, including tests of battery, static and dynamic charging systems. In December last year BHP said the first Caterpillar battery-electric haul trucks had arrived at Jimblebar for on-site testing.

But mining’s use case is quite different to agriculture’s. Mining fleets are concentrated on large sites, run hard and can justify major charging infrastructure. Farm machinery is more dispersed, more seasonal and often works across long distances, which makes electrification of the biggest machines harder to pull forward. 

Where farms can move sooner

Government and industry programs suggest the most practical potential electrification gains for farmers are in stationary and lower-power equipment. Agriculture Victoria has run on-farm energy assessments since 2018. The majority of those assessed since then have been dairy and horticulture farms, with common recommendations including solar PV, variable speed drives, more efficient equipment, heat recovery and operational controls. 

The CEFC and National Farmers’ Federation have also pointed to irrigation, pumping, heating and cooling, machinery upgrades and precision agriculture as areas where clean energy can lower energy use and improve productivity. The CEFC says energy is one of the sector’s fastest-growing costs.

In irrigation, the numbers can be tangible. A CEFC case study on the Darling Downs found a 25kW solar system supporting an 18kW bore pump cut annual electricity costs by $8,000, for example.

There are also operating benefits beyond the fuel bill. The NSW DPI report found maintenance costs for a diesel pump are almost double those of an electric pump, with diesel pumps more labour-intensive and harder to operate remotely.

Not a simple switch 

All of that does not make electrification straightforward. A 2024 NSW pilot with dairy farms found thermal storage and solar-powered cooling systems could reduce peak electricity demand and energy costs, but said the financial results fell short of expectations, underlining that technology alone does not guarantee savings.

That may be the most important point for agriculture right now. The electrification opportunity is real, but uneven. Some farm systems look ready for change. Others still depend on diesel and may do so for years.

For now, the current fuel disruption may be less a trigger for an all-electric future than a reminder that energy choices on farm are becoming more strategic. In mining, the headline story is battery-electric haul trucks. In agriculture, the quieter shift may be in pumps, cool rooms, hot water, sheds and smaller machines that can be electrified earlier, and with less disruption.