ARENA backs aviation fuel project

The Australian Renewable Energy Agency (ARENA) has committed up to $32 million in conditional funding to support a project that aims to convert forestry byproducts into sustainable aviation fuel (SAF), as Australia looks to establish a domestic low-carbon aviation fuel industry.

The funding will enable HAMR Energy to undertake front-end engineering design (FEED) and development work for a proposed biomass-to-fuel supply chain across Victoria and South Australia.

The project intends to convert forestry byproducts such as sawdust and bark into renewable methanol, which can then be used to produce SAF, renewable diesel and other low-carbon fuels.

If commercialised, the facility could produce enough SAF to displace around 140 million litres of conventional jet fuel each year, reducing carbon emissions by an estimated 330,000 tonnes annually.

ARENA chief executive 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."

The finding will be released in two stages, with an initial $12.5 million available immediately and the remaining $19.5 million contingent on HAMR Energy securing additional co-investment to progress detailed engineering.

The project will source plantation forestry for the Green Triangle region across western Victoria and South Australia, creating an additional revenue stream for plantation owners while supporting certified sustainable forestry operations.

HAMR Energy co-founder David Stribley said the investment marked an important step towards building a domestic SAF 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.