A new project backed by the Australian Renewable Energy Agency (ARENA) could transform sawdust, bark and other forestry byproducts into sustainable aviation fuel, offering a fresh pathway for cutting aircraft emissions and building a domestic clean fuels industry.
ARENA has committed $32 million in conditional funding to support HAMR Energy in carrying out Front-End Engineering Design (FEED) work and other development activities for a proposed biomass-to-fuel supply chain spanning Victoria and South Australia.
The project would convert forestry byproducts into renewable methanol, which can then be processed into sustainable aviation fuel (SAF), renewable diesel and other low-carbon fuel products.
If successful, the facility could displace 140 million litres of fossil jet fuel each year and cut around 330,000 tonnes of carbon dioxide emissions annually, while helping establish the commercial viability of SAF production in Australia.
ARENA CEO Darren Miller said the initiative could play a key role in growing the country’s emerging SAF sector, noting that aviation remains one of the hardest industries to decarbonise given the limited alternatives to liquid fuels for long-haul travel.
He said SAF represents a workable near-term option for lowering aviation emissions using aircraft and infrastructure already in operation.
Miller added that Australia has considerable scope to convert underused biomass into valuable low-carbon fuel products, and that the project would help determine whether byproducts from existing forestry operations could be turned into liquid fuels on a commercial scale.
He said ARENA’s support for projects of this kind is intended to establish the technical and commercial groundwork for a domestic SAF industry, which could eventually bolster Australia’s fuel security, generate regional economic activity and reduce aviation’s emissions footprint.
The funding will be delivered in two stages.
An initial $12.5 million has been made available now, with the remaining $19.5 million contingent on HAMR Energy securing additional co-funding needed to begin detailed FEED work.
Forestry byproducts for the project will be sourced from plantation owners in the Green Triangle region, which stretches across western Victoria and south-eastern South Australia, provided they meet Australia’s strict forestry management certification requirements.
Establishing a market for these materials could give plantation owners a new revenue stream alongside core products such as structural lumber used in construction.
HAMR Energy co-founder David Stribley described the funding as an important step toward building a globally competitive SAF industry in Australia, saying the project has the potential to strengthen the nation’s fuel security, cut aviation emissions and create skilled jobs across construction, engineering, manufacturing and regional supply chains.
“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,” Stribley said.
The project is being funded through the Future Made in Australia Innovation Fund, part of the federal government’s broader push to build local manufacturing and clean energy capability while supporting the transition to lower-emission industries, including aviation.
