HIF Global plans to produce around 100 million litres of eFuel per year from 2028, according to a statement.

The agreement plans to use Forico's plantation near the town of Burnie, northwest Tasmania, to recycle about 250,000 tons of carbon dioxide per year from the residual biomass that the Australian company will supply.

This is equivalent to decarbonising 60,000 vehicles per year, HIF Global and Forico said in the statement.

"The technology essentially produces methanol, so to produce methanol, what they do is use electrolysers to split water into hydrogen and oxygen," said Andrew Jacobs, Forico's head of strategy, at a meeting in Launceston, Tasmania, with foreign journalists.

"Then they take biomass, which is why they're (HIF Global) interested in forestry residues, and they extract carbon dioxide through a gasifying process. And then they combine the hydrogen with the carbon dioxide to make your methanol," said Jacobs, emphasising that Australia will be a pioneer in the production of eFuels.

By obtaining permits from the Australian authorities and overcoming obstacles around the electrification network and investments, the modern plant's construction will begin in 2025 in northwest Tasmania.

Australia has enormous potential to be a key player in meeting the huge worldwide demand for eFuels and this is another big stride towards realising that potential," Cesar Norton, president and CEO of HIF Global, said in the statement.

The energy giant, which already produces eFuels at its pilot plant in Haru Oni, in southern Chile, seeks to produce "150,000 barrels per day of eFuels" globally in the next decade.

Forico, the largest private forestry management company in Tasmania, and which has responsible forest management certification from the global NGO Forest Stewardship Council, has about 173,000 hectares of forests.

Australian Associated Press