ARENA backs aviation fuel from forestry byproducts

ARENA has announced $32 million in conditional funding to support HAMR Energy to conduct a front-end engineering design (FEED) and other development activities for a proposed biomass-to-fuel supply chain across Victoria and South Australia. The project aims to convert forestry by-products into renewable methanol, which can then be used as sustainable aviation fuel (SAF), renewable diesel and other low-carbon fuel products.

SAF produced by the proposed facility could result in the displacement of 140 million litres of fossil jet fuel, abate approximately 330,000 tonnes of CO₂ per annum and support the commercialisation of SAF production.

ARENA CEO Darren Miller said this project could help accelerate Australia’s emerging SAF industry.

“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,” he said. “Australia has a significant opportunity to turn underutilised biomass resources into valuable clean fuel products, and this project will help test whether by-products from existing forestry operations in Australia can be converted into low-carbon liquid fuels at scale.

“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.”

ARENA’s funding will be released over two stages with $12.5 million available for the initial phase and the remaining $19.5 million conditional on HAMR Energy securing the necessary co-funding to commence detailed FEED.

The forestry by-products used by the project will be sourced from plantation owners in the Green Triangle region spanning Western Victoria and South Australia that meet Australia’s stringent certification schemes for forestry management. Creating a new market for these materials could provide plantation owners with an additional revenue stream alongside their primary products, such as structural timber being used in the construction sector.

Image: SAF Energy Park (artist’s impression). Credit: HAMR Energy