ARENA CEO Ivor Frischknecht said the project is expected to generate simple, cost effective renewable energy from biomass.
Frischknecht said: "Renergi was created out of Curtin University to commercialise some of its bioenergy ideas. Renergi is aiming to scale up existing technology successfully developed with ARENA funding support.
"A 100 kg per hour biomass conversion (pyrolysis) unit will be designed and constructed along with a complementary 20 litre per hour biorefinery unit.
"Biomass like agricultural waste and mallee can be used to produce products that replace fossil fuels, including bio-oil and advanced biofuels.
"Renergi’s approach would allow green bio-crude to be produced by conversion units at the source of feedstocks and refined into high quality transport biofuels at a large central refinery."
The biofuel plant will be operated at low temperature and close to atmospheric pressure, thereby increasing safety while reducing energy requirements and capital costs, Frischknecht said.
Frischknecht said: "Existing processes require agricultural waste crops to first be ground into smaller pieces, costing considerable time and energy.
"Renergi’s solution aims to streamline this step by incorporating steel grinding balls into a rotating biomass conversation unit, allowing simultaneous break-down and gasification.
"The plant will operate at low temperatures and close to atmospheric pressure increasing safety and reducing energy requirements and capital costs.
The $12.9m project is planned to be completed in October 2017.