Tees Valley Mayor Ben Houchen said it was "fantastic news".
Mr Houchen said: "Alfanar's commitment to the region and its workers is fantastic to see, with hundreds of high-quality, well-paid jobs set to come for people right across Teesside, Darlington and Hartlepool.
"It also ties into our ambitions to make Teesside Airport the UK's first hydrogen-ready airport, and an early adopter of these sustainable aviation fuels.
"Critically, at a point where we need to be thinking outside of the box to cut down on traditional jet fuel emissions to keep our aviation sector soaring, this investment and innovative project will help us become a pioneer in the aviation fuels of the future."
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