AMSL Aero, based out of Bankstown airport in Sydney's west, already has test-flown a tethered prototype of its Vertiia aircraft as a proof of concept and is now preparing a remote-piloted version which it says can be adapted for fire-fighting. The latest $3 million grant comes after a $5.43 million funding boost from the Australian Renewable Energy Agency last year.

The company is combining with the University of Sydney, experienced aerial firefighting specialist Pay's Air Service and robotics company Mission Systems to develop remote-piloted VTOLs which can carry 500kg of water or fire retardant deep into a fireground and attack critical areas and ignition points.

It's a high-tech skew on traditional waterbombing methodology and one which AMSL Aero chief executive Max York says has the potential to change up bushfire fighting practices by having a number of these VTOLS "swarming" over a target area and dropping water very precisely, without putting pilots and crew at risk.

"Aerial firefighting is dangerous work and it's only going to get more dangerous as our warming climate brings intense heat waves and fast-moving wildfires," he said.

"Our solution is to develop a remote piloted VTOL which combines the virtues of an aircraft and a helicopter and has a flying range of 1000kms so it can operate at low cost across a fire front for longer, and which removes that danger to pilots and crew."

Three US crew members were killed when their large air tanker crashed near Adaminaby, in NSW, during the devastating Black Summer bushfires of 2019-2020, and there were reports of several "close calls" involving other types of firefighting aircraft due to pilot fatigue, intense smoke, and mechanical issues.

While VTOL aircraft are under development all around the world, Mr York said the key AMSL Aero point of difference was that it was working on a hybrid hydrogen-fuelled battery-electric solution which boasts much greater range than the battery-only alternatives which need lengthy periods of time on the ground to recharge.

"We believe we've cracked the code on this," he said.

"Because we use liquid hydrogen which is very dense and light weight, our aircraft recharges its batteries in flight using fuel cells. We're on the ground five per cent of the time instead of 50 per cent of the time like the battery versions.

"It only takes 10 minutes to refuel with liquid hydrogen but the challenge of course, is to get that fuel to those refuelling points.

"But when you have a very long range as we do, you can fly somewhere, pick up some fuel at the end of the day, and then you are ready to go again, fighting fires, the next day."

The Vertiia has eight variable pitch rotors mounted in pairs across four control surfaces, with a central compartment which can be adapted for multiple uses including passengers, cargo, or a mixture of both. On the remote control fire-fighting version, it's expected a huge water or retardant tank would be tailored to fit the compartment.

While several Australian companies have already provided seed money for the AMSL Aero program, Mr York said the federal grant will accelerate their aircraft into autonomous testing. As the project grows, there is an opportunity for other Australian companies to become key component suppliers.

Federal Science and Industry Minister Ed Husic said climate change was "making bushfires more extreme and more damaging, so it's really important we find better ways of fighting them and that's what this $3 million investment is all about".

"This is Aussie knowhow being used on the frontline to protect lives and homes, which will always be something the Albanese government takes extremely seriously."