LanzaTech has taken the difficult decision not to proceed with development of a Sustainable Aviation Fuel (SAF) production facility in Port Talbot.

This is not a decision we have taken lightly. LanzaTech has been working to establish a project in Port Talbot since 2012, and throughout that period we have received constructive and positive support from the local Council and MP, Welsh Government, the Welsh Office, local partners and wider UK Government stakeholders including through the Advanced Fuels Fund and other schemes. We are grateful for that engagement and for the shared ambition to bring first-of-a-kind clean fuels infrastructure to Wales.

The original project was designed to capture waste gases from the Tata steel mill blast furnaces and convert them into ethanol, which would then be processed into green jet fuel at Port Talbot. The closure of the blast furnaces removed that opportunity, so we examined an alternative configuration in which imported ethanol would be converted into SAF at the site. However, despite extensive efforts to improve the economics, including more than £150M in identified construction cost savings, the Port Talbot site remains significantly more expensive for SAF production than alternatives, notably our DRAGON II project site in Humberside. This is due to a series of site-specific factors, including the high costs of bringing power and gas to the site, the need for extensive piling to stabilise the ground, and the requirement to build all required utilities and infrastructure from new. Compared with sites that already have this infrastructure in place, the capital costs at Port Talbot are not competitive, and even with the welcome public support available, the project does not reach the threshold needed for a viable investment decision.

Following the closure of the Tata blast furnaces and the resulting pivot to a SAF-only facility at Port Talbot, we also explored options to produce ethanol elsewhere in Wales to supply the project. This included development of an ethanol production facility at Milford Haven, which would have used captured CO2 together with green hydrogen to produce ethanol for upgrading into e-SAF. Even with the Port Talbot SAF plant no longer proceeding, we considered whether that ethanol could instead be supplied to our DRAGON II project in Humberside. However, the high cost of green hydrogen in the UK makes this route economically unviable. LanzaTech has been in correspondence with relevant Government departments, but regrettably there have been no policy developments sufficient to address the hydrogen cost challenge. We have therefore ceased developing all UK ethanol production facilities that would utilise CO2 with green hydrogen, including the Milford Haven project, and have informed the Department for Transport why it will not be commercially viable to make e-SAF in the UK under the current regulations.

LanzaTech would like to thank local stakeholders for the support given to the Port Talbot and Milford Haven projects and to recognise the positive engagement we have received throughout this process. We appreciate that not moving forward with the DRAGON I project will be a disappointment in Port Talbot and Wales. It is a conclusion reached only after sustained technical, commercial and policy work to make the project viable. 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.”

Jim Woodger
Managing Director, Lanzatech UK