Transport emissions will be covered when the Scheme starts. However, it will not be necessary for persons who emit through their transport use (eg. car drivers) to purchase permits. Instead, the liability for transport emissions will rest with upstream fuel suppliers.

Transitional assistance will be provided to give business time to adjust to the costs of the Scheme. For the first three years of the Scheme, the Government will cut fuel tax on a cent-for-cent basis to offset the initial price impact on transport fuels associated with the Scheme. The agricultural industry will receive a new CPRS fuel credit (which will be equal to the fuel tax cut). The transitional arrangements will not apply to transport fuels used by the aviation, rail and maritime industries.

The Government has acknowledged in the White Paper that the Scheme may lead to an increase in fuel costs. However it has concluded a carbon price on fuel will ultimately reduce fuel use and the emissions intensity of transport by contributing to improved vehicle efficiency, changes in the fuel use mix, modes of transport and residential location.