$32 million investment to create jet fuel from forest waste

A $32 million federal government investment into Australian-made jet fuel produced from forest waste is bringing it a step closer to powering flights.

The government hopes the investment will make the country’s fuel supply more resilient and less vulnerable to overseas shocks.

Through the Australian Renewable Energy Agency (ARENA), the investment will help develop HAMR Energy’s project — which aims to use forest waste to produce renewable methanol in Australia, which can then be converted into sustainable aviation fuel, renewable diesel and other low-carbon liquid fuels.

“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,” said Minister for Climate Change and Energy Chris Bowen. “Projects like this can help strengthen Australia’s long-term fuel resilience by supporting more domestic fuel production and a more diverse fuel supply, making us more resilient to global energy shocks.”

ARENA’s funding is in two stages, with $12.5 million available for the early Front End Engineering Design phase, and a further $19.5 million subject to HAMR Energy securing the necessary co-funding to commence the detailed design phase.

The forestry waste consists of by-products and residues such as sawdust, bark, woodchips, thinnings and other material left over after harvesting and processing has occurred that typically have limited other markets. This will generate additional revenue to plantation owners alongside their existing primary products.

“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,” said Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King.

“We are proud to be investing in this project that turns waste into fuels. It brings together a range of industry partners and investors with Australian expertise in aviation, fuels and engineering who will help us take the next step with these biofuels.”

With a total project cost of $92 million, the funding will be used to undertake development and design work to prepare three facilities for future investment decisions:

• A biomass processing facility located in Victoria will process approximately 600,000 tonnes a year of forestry residues.
• The Portland Renewable Fuels methanol project located in Portland, Victoria will produce approximately 300,000 tonnes a year of renewable methanol.
• A Methanol-to-Jet project located in Gillman, South Australia will use the methanol to produce approximately 140 megalitres of sustainable aviation fuel each year.
   

Liquid fuels make up around half of Australia’s national energy use. Sustainable aviation fuel is one of the best ways of reducing emissions from aviation, particularly on long-haul flights where alternatives are limited.

This project could support the development of a new Australian low-carbon liquid fuels industry, more jobs and investment opportunity across the forestry, manufacturing, engineering and aviation sectors.

“Australia’s foresters have always been innovators. That’s why our government is backing new opportunities through significant investments in low-carbon liquid fuel,” said Minister for Agriculture, Fisheries and Forestry Julie Collins. “This will mean more opportunities taking flight for our proud forestry industry, backing jobs in regional communities.

“Producing more low-carbon liquid fuels right here in Australia doesn’t just benefit our fuel security and emissions reduction, it supports Australian foresters and our regions.”

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