Australia’s renewable energy agency has backed a new initiative to transform forestry byproducts like sawdust and bark into sustainable aviation fuel (SAF), aiming to slash emissions across hard-to-abate sectors while supporting a new domestic green industry.
The Australian Renewable Energy Agency (ARENA) announced AU$32 million in conditional funding for renewable developer HAMR Energy to undertake front-end engineering design (FEED) and development across Victoria and South Australia.
Funded under the federal government’s Future Made in Australia Innovation Fund, the project aims to convert forestry waste into low-carbon methanol, which can subsequently be used to produce SAF, renewable diesel, and other clean liquid fuels.
If fully realised, the project could displace 140 million litres of traditional fossil jet fuel and abate roughly 330,000 tonnes of carbon dioxide annually, helping build sovereign fuel security.
ARENA CEO Darren Miller noted that long-haul aviation remains one of the trickiest sectors to decarbonise due to limited alternatives to liquid fuels.
“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.”
ARENA will roll out the funding across two phases, releasing AU$12.5 million initially. The remaining AU$19.5 million remains conditional on HAMR Energy securing required matching investment to commence detailed design work.
The biomass feedstock will be sourced from plantation owners operating in the Green Triangle, a region spanning Western Victoria and South Australia.
Certified under strict forestry management schemes, the supply chain provides timber growers an extra revenue stream alongside structural lumber.
HAMR Energy Co-Founder David Stribley welcomed the funding as a vital milestone for local 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.
