The Australian Government is investing $32 million to help develop a project converting forestry residues into sustainable aviation fuel, a step toward a more resilient, less import-dependent domestic fuel supply.
The funding, delivered through the Australian Renewable Energy Agency (ARENA), will support HAMR Energy's project to convert forest waste into renewable methanol, which can then be processed into sustainable aviation fuel, renewable diesel and other low-carbon liquid fuels.
ARENA's funding comes in two stages: $12.5 million for the early Front End Engineering Design phase, with a further $19.5 million available once HAMR Energy secures the necessary co-funding to begin detailed design.
The forestry residues used, byproducts such as sawdust, bark, woodchips and thinnings left over after harvesting, typically have limited existing markets, meaning the project could generate additional revenue for plantation owners alongside their primary products.
With a total project cost of $92 million, the funding will prepare three facilities for future investment decisions: a biomass processing facility in Victoria handling around 600,000 tonnes of forestry residue annually; the Portland Renewable Fuels methanol project in Portland, Victoria, producing approximately 300,000 tonnes of renewable methanol a year; and a Methanol-to-Jet facility in Gillman, South Australia, converting that methanol into around 140 megalitres of sustainable aviation fuel annually.
Liquid fuels account for roughly half of Australia's national energy use, and sustainable aviation fuel is considered one of the most effective ways to cut aviation emissions, particularly on long-haul routes where alternatives remain limited.
Climate Change and Energy Minister Chris Bowen said the project could strengthen the country's long-term fuel resilience. "Australia has an abundant supply of forest waste, and turning it into fuel for hard-to-abate sectors like aviation would be a win for emissions, Australian industry and regional jobs," he said.
Infrastructure, Transport, Regional Development and Local Government Minister Catherine King said the project would create opportunities across multiple sectors. "Producing new clean fuels here in South Australia and over the border in Victoria will create new opportunities across the forestry, manufacturing, engineering and aviation sectors," she said, noting the investment forms part of the Low Carbon Liquid Fuels Innovation Fund.
South Australian Premier Peter Malinauskas said the state was positioning itself as a leader in the emerging industry. "South Australia is at the forefront of creating a new sovereign jet fuel industry for Australia," he said. "Australia cannot afford to rely indefinitely on imported liquid fuels."