Australian HAMR to crack SAF production challenge

Clip from the Portland Observer paper featuring HAMR Energy’s latest Project update with ThyssenKrup Uhde

Australia's pathway to cleaner skies is clearer than you think… It starts with methanol.

We are excited to be featured in SAF Investor this week, sharing our unique strategy to decarbonise the skies. As our co-founder, David Stribley, explains: “Think of methanol as like crude oil. We can produce methanol through multiple pathways for further conversion into sustainable aviation fuel.”

Our approach, as highlighted in the article:

• 🌲 Leverage regional feedstock advantages to produce methanol locally, all-year round.

• ✈️ Concentrate SAF production in centralised hubs where demand is high near airports in a hub & spoke model.

A huge thank you to the team at SAF Investor the interview & feature!

Read the full piece here: https://www.safinvestor.com/opinion/148563/australia-hamr/

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Australian HAMR to crack SAF production challenge

Think of methanol as like crude oil,” says David Stribley co-founder of renewable fuels company HAMR Energy. “We can produce methanol through multiple pathways for further conversion into sustainable aviation fuel [SAF].”

Australian renewable energy company is taking a unique approach to leverage regional feedstock advantages to produce methanol before concentrating SAF production in centralised locations where demand is high.

HAMR is building its flagship project in the southeastern Australian state of Victoria. The facility, after an AUD $1.8bn (US$1.2bn) investment, will produce methanol through what Stribley calls “a hybrid approach” by transforming hydrogen. The company is using thyssenkrupp Uhde’s technology at the site.

“We will take residual forestry biomass, we will gasify that using thyssenkrupp’s Permaflow gasification process, which has been used for many years. We add hydrogen to that and then we run it over a methanol catalysis bed,” explains Stribley.

Using forestry biomass ensures long-term feedstock security. “One of the reasons we focused on forestry biomass is they’re [biomass suppliers] more than comfortable signing long-term supply agreements,” Stribley noted. “Forestry residue is not seasonal. It’s harvested all year round.” The strategy is already working for HAMR. The company has secured 100% of the biomass feedstock by signing agreements with three to four major firms.

In the second phase, Stribley says HAMR plans to invest $523.8m to convert methanol produced at the Victoria site and convert it into SAF at more centralised locations such as Adelaide or Melbourne. When asked why methanol-to-jet instead of HEFA or alcohol-to-jet production pathways, Stribley says there are clear advantages to adopting the MTJ process for SAF production especially in a country like Australia.

“It is less energy intensive because you are not having to break a double bond in your ethanol,” Stribley explains, comparing the process to alcohol-to-jet conversion. The other key benefit, according to HAMR, is that its MtJ approach responds to the feedstock challenges faced by emerging SAF players. “The big oil and gas companies have the might to secure the feedstock for HEFA pathways,” he highlights. But it is not so simple for newer SAF producers, especially in the Australian market where used cooking oil and tallow is limited.

While some might argue that the MtJ process is relatively new and may suffer from low technological readiness level (TRL). Stribley adds: “At a large scale… each one of those steps [involved in the MtJ pathway] is currently done at mega commercial scale, particularly in China.”

The process involves three key stages. First is converting the methanol into dimethyl ether followed by the addition of hydrogen to remove oxygen from the molecules. The final step is fractionation to produce jet fuel. “All the bits of technology are known and we are also working closely with leading SAF technology company Honeywell to develop this process,” he says.

These partnerships are helping HAMR to raise the capital required to deliver these projects on time. HAMR is currently raising Series A round of $6.55m. It has already received commitments for 60% of the total from leading Australian corporates who are also exploring offtake.

HAMR’s project economics also stands to benefit from government support. The company’s early feasibility studies were partly funded by the Victorian state with additional support also likely from the Australian Renewable Energy Agency (ARENA). It can also qualify for Australia’s Hydrogen Head Start 2.0 Programme given its use of hydrogen in the methanol production process, according to Stribley.

From a demand perspective, Stribley thinks the company is well-positioned despite the lack of a SAF mandate in Australia. “Qantas has their SAF Alliance, which is around creating that domestic demand. So that will probably cover the [SAF purchases from the] first couple of SAF projects within Australia until a mandate emerges,” Stribley notes. And the phased approach of prioritising methanol before SAF means the company can benefit as the decarbonisation push leads to greater demand from airlines in the Oceania region.

For Stribley, this progression from methanol to SAF represents a calculated bet on renewable energy that prioritises supply chain control and development and feedstock security over production.