Forestry deal boosts green fuel start-up’s $1.8b project
An ambitious proposal to produce green fuel at a $1.8 billion facility in Victoria is gaining momentum after the federal government’s pledge to invest into the fledgling sector and the project’s developer struck a key deal to source forestry residue.
HAMR Energy, a sustainable fuels start-up chaired by former ExxonMobil executive Richard Owen, plans to develop a facility in Portland on Victoria’s west coast to manufacture clean fuel for aviation and shipping.
Known as low-carbon liquid fuels, they can replace the conventional fossil fuels used in aviation and shipping, sectors that are difficult to decarbonise otherwise.
The Albanese government last week committed $1.1 billion to the low-carbon liquid fuel (LCLF) sector as part of the national effort to hit the new 2035 climate target.
HAMR has already signed an MOU with Future Fund-backed forestry giant OneFortyOne for the supply of biomass – material left over from logging and sawmilling – as the feedstock for the Portland facility.
“The announcement on LCLF by the Australian government is very timely, we are pleased to see the ongoing commitment to reducing Australia’s carbon emissions,” said Nick Chan, director of corporate strategy at OneFortyOne.
OneFortyOne’s owners include the Future Fund, Aware Super and T-Corp along with US pension funds and other offshore investors. It holds about 160,000 hectares of softwood plantation across the Green Triangle region in south-east Australia and in New Zealand.
Chan described the tie-up with HAMR Energy as a “pivotal moment for trans-Tasman forestry” as OneFortyOne looks to both diversify its market and decarbonise its supply chain, especially the emissions linked to transport.
“Our industry is the logical partner in this LCLF space given the predictability and reliability we offer through scale and consistency of feedstock supply, year-round operations, and utilisation of well-established infrastructure and supply chains,” he said.
The Labor government last week declared its revised climate target to reducing emissions by between 62 per cent and 70 per cent. The road map to achieve that goal includes expanding the use of clean fuels, given the transport sector accounts for 22 per cent of Australia’s annual emissions.
Clean fuels can be “dropped in” – directly substituted for the conventional fuels used in existing engines. The feedstock to produce greener fuels can be drawn from the agricultural sector – such as canola and tallow – or from forestry residue such as offcut branches, pine needles and sawdust.
Once up and running, HAMR Energy’s Portland plant could potentially produce about 300,000 tonnes annually of methanol, derived from the forest residue. It is in the middle of a Series A funding round aimed at high-net-worth individuals and venture capitalists along with energy, aviation and shipping companies.
“We are looking forward to working with OneFortyOne, our other project partners, state and federal governments and offtakers so that locally sourced forestry residues are soon fuelling Australian aviation and shipping,” said co-founder David Stribley.
Australia exports billions of dollars worth of canola and tallow, while forestry residues that could be used to produce clean fuels are left on the forest floor or turned into pulp. Meanwhile, the Clean Energy Finance Corporation estimates a domestic low-carbon liquid fuel industry could be worth $36 billion by 2050.
Other biofuel players also positioning for a place in the market include Jet Zero Australia, which has two projects under way in Queensland using waste agricultural products.
