The agreement secures the site for the development of the multibillion LGF facility, a world-leading second-generation SAF plant that will be one of the largest of its kind globally and is the most advanced in Europe. The project will also be UK's first new refinery since the 1960s.
Located at Seal Sands on the mouth of the River Tees, the site will enable full end-to-end SAF production, from feedstock pre-treatment through to final fuel production and storage. Its proximity to key infrastructure and carbon capture and storage (CCS) networks, will support efficient, ultra-low carbon operations and future scalability.
Once operational, the facility will produce 180 million liters of SAF and 30 million liters of renewable naphtha per year from sustainably sourced biomass feedstocks, including forestry and agricultural residues.
With access to carbon capture and storage (CCS), the project can deliver carbon-negative fuel, reducing lifecycle emissions by over 200% compared to conventional jet fuel. Once operational, LGF could contribute around 46% of the total UK SAF Mandate on a greenhouse gas emissions basis, compared with around 20% without CCS, while also strengthening the UK's long-term fuel resilience.
The project has now entered an advanced development phase, with Front End Engineering Design (FEED) completed at the end of May and all core technology licenses secured. Planning and permitting continues to progress through the Development Consent Order (DCO) process ahead of a final application submission in the summer.
This follows the recent announcement that LGF has been selected by Defra as a pilot project for the Lead Environmental Regulator programme, alongside Sizewell C, helping streamline environmental consenting for nationally significant infrastructure projects.
In parallel, the project has submitted its application for connection into the Teesside carbon capture and storage network, while commercial discussions continue with major biomass suppliers and SAF offtake partners.
To date, Alfanar has invested approximately £90 million into the project, with a further £100 million expected to be committed ahead of Final Investment Decision and financial close, targeted for the end of 2027.
Alfanar UK Country Head, Noaman Al Adhami, said, "This marks another major milestone for Lighthouse Green Fuels as we advance towards financial close. The land option agreement not only anchors the project in Teesside, but gives us the platform to deliver one of the most advanced and ambitious sustainable aviation fuel facilities anywhere in the world.
"At a time of growing fuel insecurity, this multibillion investment will strengthen the UK's resilience to global oil price shocks and unlock new opportunities for growth, innovation and skilled jobs in the region."
Site MP Chris McDonald, who visited the LGF site, said, "Lighthouse Green Fuels is the kind of project that tells you something important about where Teesside is heading. The scale is impressive, the ambition is clear, and it will be right at home in Billingham. A town with the industrial heritage, skilled workforce and know-how to deliver major projects of national importance.
"This is a powerful vote of confidence in our region. A groundbreaking project, major investment and a new industry, all coming together on Teesside. It has the potential to change aviation for the better and to cement the UK, and Billingham in particular, as a leader in sustainable aviation fuel.”
