HAMR Energy has secured up to AUD 32 million in conditional funding from the Australian Renewable Energy Agency (ARENA) to advance a series of projects that will use renewable hydrogen, plantation forestry residues and renewable electricity to produce sustainable aviation fuel (SAF) and other low-carbon fuels.
The funding marks the first investment under the Australian Government’s AUD 250 million Low Carbon Liquid Fuels priority, which aims to establish a domestic industry for producing lower-emission fuels for sectors that are difficult to decarbonise, including aviation.
At the centre of the initiative is a proposed large-scale methanol-to-jet refinery in Port Adelaide, which would convert low-carbon methanol into sustainable aviation fuel. The integrated project spans South Australia and Victoria, covering the entire value chain from collecting plantation forestry residues to producing renewable methanol and refining it into aviation fuel, renewable diesel and other low-carbon products.
Renewable hydrogen will play a key role in the process by combining with carbon derived from sustainably sourced forestry residues to produce low-carbon methanol, an increasingly important intermediate product for sustainable fuel production.
At full capacity, the projects are expected to process approximately 600,000 tonnes of plantation forestry residues annually, producing around 300,000 tonnes of low-carbon methanol. The Port Adelaide refinery would then convert this into approximately 140 million litres of sustainable aviation fuel each year, alongside renewable diesel and other fuels.
According to HAMR Energy, the annual SAF output could replace an equivalent volume of conventional jet fuel, reducing greenhouse gas emissions by approximately 390,000 tonnes of CO₂ equivalent per year. The company estimates that the fuel could achieve emissions reductions of around 85% compared with fossil-based aviation fuel, depending on lifecycle assessment.
The funding will support engineering and project development activities as the company moves into the Front-End Engineering Design (FEED) phase. ARENA will initially provide AUD 12.5 million, with an additional AUD 19.5 million available once HAMR Energy secures the required co-investment for the next stage of development.
Beyond emissions reductions, the project is intended to strengthen Australia’s fuel security by establishing domestic production of sustainable aviation fuels and reducing reliance on imported liquid fuels. The company also expects the development to create hundreds of construction jobs and more than 200 permanent positions, while supporting Australia’s forestry, renewable energy, manufacturing and engineering sectors.
The project reflects the growing role of renewable hydrogen in the production of sustainable aviation fuels. Green hydrogen, produced through electrolysis powered by renewable electricity, is increasingly being combined with sustainable carbon sources to produce synthetic fuels capable of reducing emissions in aviation—one of the sectors where direct electrification remains challenging.
If developed as planned, HAMR Energy’s integrated forestry-to-fuels project would represent a significant step toward building Australia’s domestic sustainable aviation fuel industry while demonstrating how renewable hydrogen can help decarbonise long-distance air transport.