The Australian Renewable Energy Agency (ARENA) has announced up to $32 million in conditional funding for a project aimed at converting forestry byproducts into sustainable aviation fuel (SAF), supporting the development of a domestic low-carbon fuels industry.
According to ARENA, the funding will support HAMR Energy in undertaking Front-End Engineering Design (FEED) and other development activities for a proposed biomass-to-fuel supply chain across Victoria and South Australia.
In a news release, the agency stated the project plans to use forestry byproducts such as sawdust and bark to produce renewable methanol, which can be used to manufacture SAF, renewable diesel and other low-carbon fuel products.
ARENA said the proposed facility could produce enough SAF to displace around 140 million litres of fossil jet fuel each year, with the potential to reduce carbon dioxide emissions by approximately 330,000 tonnes annually while supporting the commercialisation of SAF production.
ARENA CEO Darren Miller said the project could help accelerate Australia’s emerging sustainable aviation fuel sector.
“Aviation is one of the most challenging sectors to decarbonise, particularly for long-haul flights where alternatives to liquid fuels remain limited. SAF offers a practical near-term pathway to reduce emissions from aviation using existing aircraft and infrastructure,” Miller said.
“Australia has a significant opportunity to turn underutilised biomass resources into valuable clean fuel products, and this project will help test whether byproducts from existing forestry operations in Australia can be converted into low-carbon liquid fuels at scale.”
He added that projects such as this could help establish the technical and commercial foundations for a domestic SAF industry.
“By supporting projects like this, ARENA is helping to test the technical and commercial foundations of a domestic SAF industry, which in the future could strengthen Australia’s fuel resilience, create new regional economic opportunities and reduce emissions from aviation,” Miller said.
ARENA said the funding will be released in two stages, with $12.5 million allocated to the initial phase and the remaining $19.5 million subject to HAMR Energy securing the required co-funding to proceed with detailed FEED activities.
The project intends to source forestry byproducts from plantation owners in the Green Triangle region spanning western Victoria and South Australia.
ARENA said participating plantations would be required to meet Australia’s forestry certification standards, and the project could provide plantation owners with an additional revenue stream alongside the production of structural timber and other primary products.
HAMR Energy co-founder David Stribley described the funding as an important step towards establishing a domestic sustainable aviation fuel industry.
“The project has the potential to strengthen Australia’s fuel security, reduce aviation emissions and create skilled jobs across construction, engineering, manufacturing and regional supply chains,” Stribley said.
“We thank ARENA and the Australian Government for supporting the next stage of engineering and development work required to bring this nationally significant and strategically critical project closer to delivery.”
According to ARENA, the project is being funded through the Future Made in Australia Innovation Fund.
For more information visit ARENA’s website.
