ARENA invests $32m into major sustainable fuel project

The three facilities will include a biomass processing centre in Victoria; the Portland Renewable Fuels methanol project, which will produce 300,000 tonnes a year of renewable methanol; and the Methanol-to-Jet project in South Australia, which will make around 140 megalitres of SAF per year.

“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 Energy Minister Chris Bowen in a joint statement.

“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 says its funding will be released in two stages: $12.5 million initially, then $19.5 million “conditional on HAMR Energy securing the necessary co-funding”.

“Aviation is one of the most challenging sectors to decarbonise, particularly for long-haul flights where alternatives to liquid fuels remain limited. SAF offers a practical near-term pathway to reduce emissions from aviation using existing aircraft and infrastructure,” said ARENA CEO Darren Miller.

“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.”

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“By supporting projects like this, ARENA is helping to test the technical and commercial foundations of a domestic SAF industry, which in the future could strengthen Australia’s fuel resilience, create new regional economic opportunities and reduce emissions from aviation.”

HAMR Energy has welcomed the funding, with co-founder David Stribley calling it “a significant milestone in Australia building globally competitive domestic SAF industry”.

“Our projects bring together plantation forestry residues from the Green Triangle, Australian renewable energy and hydrogen, and proven methanol and refining technologies to produce lower-emissions aviation fuel at commercial scale,” he said.

“The projects have the potential to strengthen Australia’s fuel security, reduce 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.”

According to HAMR’s estimates, the SAF produced could cut carbon emissions by around 390,000 tonnes per year, and facilitate approximately 4.5 million annual economy trips between Adelaide and Melbourne.

Transport Minister Catherine King said the project will “create new opportunities across the forestry, manufacturing, engineering and aviation sectors”.

“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,” she said.

“This investment is part of our Low Carbon Liquid Fuels Innovation Fund, which will support the development of biofuel industries across the country.”

HAMR earlier this year secured funding from Qantas and Airbus for a Victorian project to create the methanol supply.