British Airways has reportedly been forced to abandon a £340 million plan to create 16 million of jet fuel from London’s rubbish every year.

The Green Sky project was due to open next year at a former oil refinery in Thurrock Essex, where it would have turned 575,000 tonnes of household waste into gas.

Enough green fuel would have been produced to power all the airline’s annual flights from London City airport twice over, with carbon savings equivalent to taking 150,000 cars off the road, the Guardian reported.

But a BA spokeswoman confirmed the project has been mothballed, partly due to low crude oil prices, concerns among investors and a lack of government policy engagement.

“The government needs to support innovative aviation biofuels projects such as this if they are to progress,” she told the newspaper.

“Aviation fuels are not eligible for incentives that road transport fuels receive, making it difficult to build a business case to invest in UK aviation fuels projects. This affects investor confidence.”

About 150 workers were expected to staff the Solena Fuels plant which BA had committed to pay £35 million a year for over a decade.

But US company Solena filed for bankruptcy three months ago and the carrier has switched its attention to other waste-to-fuels firms.