The funding will enable the trust to more than double its current output of locally sourced sustainable timber to 70m3 per year.
The timber is needed for building projects, including renovations and new builds by the Knoydart Foundation, as the community seeks to increase housing.
The new sawmill will be run on renewable electricity produced by the community’s hydro scheme, all of which will contribute to the Scottish Government’s Net Zero target.
Knoydart Forest Trust's Lorna Schofield said: 'The trust has been working hard to provide jobs and make use of local timber for building work on the peninsula. Increasing our production will help deliver timber for much-needed affordable housing in Knoydart.
'The trust is committed to taking action against the climate crisis and the sawmill going electric is a big step towards this. We have also planted more than 500,000 trees, creating 400ha of new native woodland on community-owned land.
'By working with our neighbours, our aim is to link up the woodland across the peninsula to enhance biodiversity and lock up more carbon.'
Over its 22-year operation, the trust has built up the sawmill and firewood business. The use of local timber supports Knoydart’s economy and employment and reduces the community’s carbon footprint.
One of the highlights has been providing the spectacular oak timber flooring for the recently renovated community hall, with the timber mileage from tree to sawmill, to final resting place, just one mile.
Ian Collier of Scottish Forestry commented: 'This sawmill is a great example of delivering Scotland’s Forestry Strategy on the ground.
'Not only is the community increasing the sustainable management of its woodlands and producing much-needed timber, it is making an important contribution towards 'net zero'.
'The trust has an approved forest plan and an excellent track record of managing and creating new woodlands. It’s a real model for what can be done in the west Highlands and I look forward to working with the trust as it develops new proposals.'
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