0742 GMT November 22, 2019
The plan involves using the gases from Tata's Port Talbot plant in Wales, which developers believe could be used for thousands of flights a year, BBC reported.
Tata, along with Neath Port Talbot council and American bioengineering firm LanzaTech are working on the plan.
Virgin Atlantic worked with LanzaTech last year to fly from Orlando to London powered by recycled carbon jet fuel.
Waste gases are an unavoidable part of the industrial production of steel and it is thought it could generate 30 million gallons of biofuel for the aviation industry every year.
"We certainly have an ambitious agenda with this strategy and heavy industry has to be a part of that," said Neath Port Talbot council's deputy leader Anthony Taylor.
"We accept Tata is one of the main carbon emitters across the whole of Wales. We don't want to endanger the economic side of things, but we have to tackle the environmental issues from this as well.
"But also economically taking something that has previously been regarded as waste in the industrial process and actually harness it and give Tata Steel the opportunity to make some money from the waste it produces."
LanzaTech's gas fermentation process uses carbon-rich industrial gases from the manufacturing of steel, and turns them into ethanol. It can then be transformed into chemical products and fuel.
Carl Wolf, vice president of the firm's European arm, said it was like a traditional fermentation process where waste carbon pollution and microbes are used instead of sugar and yeast.
He added, "It's a bit like retrofitting a brewery onto a steel mill. We can use a variety of waste carbon, from industrial off-gases to gasified solid wastes like agricultural residues and unsorted, unrecyclable household waste.
"We have also developed a technology that converts alcohols, such as ethanol, into jet fuel. This is increasingly important as the aviation sector needs to meet its self-imposed carbon reduction targets."
Wolf said the product performs "as well or better than its fossil-based counterparts."
A Tata Steel spokesman said, "Developing any technology to transform CO2 from our steelmaking processes into valuable resources for other industries is of huge importance.
"LanzaTech has the technology to transform waste CO2 from the steelmaking process into ethanol and is now seeking permission to develop a plant at our site in Port Talbot to convert that into jet fuel."