A quantity of homemade napalm was allegedly among the items confiscated from the Hobart home of a man arrested and released without charge, the ABC can reveal.

A container of the highly flammable, sticky incendiary gel was allegedly discovered when police searched a South Hobart flat last Friday.

Police also allegedly found other containers of potentially explosive chemicals that had been mixed together.

The 28-year-old man was taken into custody but was released without charge about 48 hours later.

Despite the alleged find of napalm and other chemical mixes, along with instructions on making explosives, police could not find any legislation the man had breached.

It is not illegal to possess the chemicals in Tasmania.

Section 181 of Tasmania's Criminal Code Act makes it an offence to make or have in one's possession a dangerous thing with the intent to facilitate a crime.

But it is understood the man told police he wanted to make fireworks with the chemicals, not bombs, and without any evidence of an intended target, police determined they did not have enough evidence to make out the charge.

Most of the chemicals that were seized could be bought off the shelf at a hardware store or supermarket.

Tasmania's Police Association said the case highlighted a real problem with existing laws in the state and called for an urgent review.

"It should be an offence for having a combination of certain chemicals, as well as limits on the amounts a person can have," acting president Gavin Cashion said.

"It's a problem. It puts all our people at risk."

Former counter-terrorism federal agent and chief operating officer at global security consultancy firm GM Risk Group, Doug Nicholson, said the problem was not isolated to Tasmania.

"It's a hard one, because some of the biggest improvised explosive devices made, were made from diesel and fertiliser," he said.

"A lot of explosive precursors have perfectly legitimate uses, hence why states haven't been successful previously in banning possession of precursors."

Commissioner Darren Hine said he would wait until the investigation was completed before reviewing the existing legislation to see if police needed to request that the Tasmanian Government close any loopholes in the legislation.