The Australian Renewable Energy Agency (ARENA) has awarded up to $32 million in conditional funding to HAMR Energy to advance engineering and development work for a proposed biomass-to-fuel supply chain in Victoria and South Australia.

The funding will support front-end engineering design (FEED) and other development activities for a project that would convert forestry byproducts into renewable methanol. The renewable methanol could then be used to produce sustainable aviation fuel (SAF), renewable diesel and other low carbon fuel products.

If developed, the facility could produce enough SAF to displace about 140 million liters of fossil jet fuel annually while reducing carbon dioxide emissions by an estimated 330,000 metric tons per year. The project is intended to support the commercialization of SAF production in Australia.

ARENA said the project could help accelerate the country's emerging SAF industry by demonstrating whether forestry byproducts can be converted into low carbon liquid fuels at commercial scale.

The agency noted that aviation remains one of the most difficult sectors to decarbonize, particularly for long haul flights where alternatives to liquid fuels are limited. SAF is viewed as a near-term option for reducing emissions while using existing aircraft and fueling infrastructure.

ARENA will distribute the funding in two stages. An initial $12.5 million will be available during the first phase of the project, with the remaining $19.5 million contingent on HAMR Energy securing the co-funding needed to begin detailed FEED activities.

The proposed facility would source forestry byproducts from plantation owners in the Green Triangle region, which spans western Victoria and South Australia. The feedstock would come from forests managed under Australia's forestry certification schemes.

Developers said creating a market for forestry byproducts could provide plantation owners with an additional revenue stream alongside traditional products such as structural lumber used in construction.

HAMR Energy said the project has the potential to strengthen Australia's fuel security, lower aviation emissions and create skilled jobs in construction, engineering, manufacturing and regional supply chains as engineering and development work moves forward.

Source: Australian Renewable Energy Agency, "ARENA backs forestry byproducts-to-aviation fuel project"