South Australia’s Forest Industries Set to Propel Low Carbon Fuel Development with Federal Investment

South Australia’s forest industries stand at the forefront of a transformative shift toward a low-carbon fuel future, buoyed by the federal government’s recent announcement of a $1.1 billion investment package designed to foster the development of cleaner fuels. This strategic funding will target hard-to-abate sectors, including aviation, shipping, heavy transport, construction, and mining, which are pivotal in Australia’s journey towards net-zero emissions.

Nathan Paine, CEO of the South Australian Forest Products Association (SAFPA), highlights the significance of this investment, particularly its recognition of forestry residues as essential feedstock. Often overlooked, materials such as limbs and needles can be repurposed into renewable fuels, presenting a substantial opportunity to decarbonize industries that are otherwise challenging to transition.

At scale, these wood residues can be converted into low-emission fuels like bio-methanol and sustainable aviation fuel (SAF), which are crucial for reducing emissions in international air transport and shipping—both identified as priority sectors in Australia’s net-zero roadmap. Companies like Hamr Energy are already making strides in this domain, positioning South Australia as a potential host for pioneering facilities that could bring commercial viability to these innovations within a few years.

Paine emphasizes that bioenergy represents a dual advantage: it not only supports a net-zero economy but also reduces Australia’s dependency on imported fuels. South Australian company OneFortyOne exemplifies this leadership in decarbonization, operating Australia’s largest sawmill with a commitment to utilizing renewable biomass for its operations.

As the forest industry marks its 150th anniversary, its role remains crucial in providing the foundational fiber necessary for economic growth and housing development. With the federal government’s investment designed to bolster national energy security, the outlook for the forestry sector is promising.

According to Bioenergy Australia, even with a shift towards electrification, Australia will need approximately 30 billion liters of liquid fuel annually by 2050. Without local production, over 80% of this demand could fall to imports.

Independent analysis from Deloitte indicates that a mature renewable fuel industry could generate an impressive $36 billion in economic activity by 2050, slash emissions by 230 million tonnes, and create over 26,000 jobs, many of which would be in regional Australia.

With a supportive policy environment, South Australia’s forest industries can lead the charge in creating a sustainable fuel sector, transforming residues into solutions that not only cut emissions but also bolster energy security and stimulate job creation across the state.