LanzaTech, a US-based firm, has scrapped its plans to build a sustainable aviation fuel (SAF) facility in Port Talbot, a project that was expected to create more than 150 jobs. The decision, announced on June 25, 2026, ends a development effort that had been ongoing since 2012.
Project Dragon Abandoned
The proposed facility, known as Project Dragon, was to be located on a former industrial brownfield site at Port Talbot's Crown Wharf. LanzaTech cited the site's lack of economic viability for SAF production as the primary reason for the cancellation. The company had previously secured £25 million from the UK Government's advanced fuel fund to support the project, which aimed to produce up to 100 million litres of sustainable aviation fuel annually using an alcohol-to-jet process.
When planning permission was granted in 2024, it was anticipated that the facility would create over 150 full-time jobs, including 85 on-site positions and additional employment through the supply chain.
Impact of Tata Steelworks Closure
LanzaTech's original plan involved capturing waste gases from the Tata steelworks blast furnaces, converting them into ethanol, and then processing that into SAF. However, the last blast furnaces at Port Talbot closed in September 2024, eliminating that feedstock source. The company then explored an alternative configuration using imported ethanol, but determined that the Port Talbot site remained significantly more expensive than alternatives due to site-specific factors.
Jim Woodger, managing director of LanzaTech UK, stated: "This is not a decision we have taken lightly. LanzaTech has been working to establish a project in Port Talbot since 2012... The closure of the blast furnaces removed that opportunity so we examined an alternative configuration... However despite extensive efforts to improve the economics the Port Talbot site remains significantly more expensive for SAF production than alternatives."
Local Disappointment and Future Prospects
David Elward, a Port Talbot local and energy transition lead at General Index, expressed disappointment: "This news will obviously come as a disappointment to the local community in Port Talbot. The past couple of years has been a roller coaster with the loss of jobs at the steelworks, the positive news of Port Talbot being potentially at the forefront of new innovative fuels production in SAF, and then now that hope and possibility coming to an end so soon."
Neath Port Talbot Council also voiced its disappointment. A spokesman said: "We are disappointed that LanzaTech will not be progressing with its proposed sustainable aviation fuel facility in Port Talbot. While the council gave its full support to the project this decision ultimately rests with the developer."
Shift to Humberside and Other Developments
LanzaTech plans to proceed with an alternative SAF production facility in the north of England, known as Dragon II. The company is also exploring ethanol production at Milford Haven using captured CO2 and green hydrogen, but high hydrogen costs have made that economically unviable. Woodger noted: "The learnings from Dragon I have been applied to Dragon II, which is now moving forward at pace in Humberside and where we hope to secure a financial investment decision in 2027."
Despite this setback, Neath Port Talbot Council highlighted other ongoing investments in the area, including the Celtic Freeport, Tata Steel's electric arc furnace, the Switch research facility, and the Global Centre of Rail Excellence.
