Environment Minister Mick Gentleman said while the next step was up to Foy, the planning directorate "would be extremely unlikely to approve a development application ... in view of the findings".

That effectively puts an end to the bid, at least for now.

Foy chairman Paul Dickson said it was disappointing that Australia was not more advanced in technology innovation, but Foy would have a commercial plant operating in Britain in 12 months, with others to follow, which would provide the requested data.

Describing the health report as "a transitional phase" that "delayed" its plans in Australia, he said there was no reason Foy would not keep its block in Hume.

Foy bought the Hume site from the government last year for $3.108 million and has paid a deposit. It had planned to covert 200 tonnes of plastic a day into diesel and petrol.

But the health panel, chaired by Craig Lamberton, raised a series of concerns about Foy's claims on emissions, potential for explosion and other concerns, given there was no operating factory of its kind.

Describing the factory as a mix of "chemical processing facility, mini crude oil refinery and fuel storage facility", the panel said converting plastic to fuel was "a promising objective" but far from a proven technology.

Foy had asserted there would be no harmful contaminants in the plastics that went into its plant, and so none in the emissions, but had provided no scientific evidence to support the claim. Contaminants in plastics could flow through to fuel quality and emissions, the panel said, describing the danger as "garbage in garbage out".

In many ways, the factory shared the risks of petrol and chemical industry sectors, with 1810 kL of fuel to be stored onsite - the size of two Olympic swimming pools, and a chemical plant "involving thermal depolymerisation in an oxygen depleted environment and fractionating and gas stream treatment processes".

But unlike most petrochemical facilities, the plastic being fed in was not well defined chemically. If oxidising agents were present they could spark unexpected chemical reactions. And given the combination of technologies, risks could not be predicted as well as they could be in the petrol or chemical industries.

The decomposition of polystyrene, polyethylene and polypropylene plastics would produce styrene, ethylene and propylene during the process, and it was not clear they had been factored into the assessment of fire and explosion risk.

"Furthermore, these alkenes must be converted (hydrogenated) to butane, propane, isooctane, etc, that constitute diesel, petrol and LPG. That means hydrogen must be produced in‐situ in the process or supplied externally to convert these intermediates to fuels," the panel said.

"Hydrogen is a flammable gas with a wide range of flammability. The broader the flammability range of a compound, the more dangerous it is with regards to its fire and explosion risk."

The panel said the ACT should require proof of performance before approving the project.

The decision is a major blow for Foy, a company with mining interests in Papua New Guinea, but which is trying to make its plastics-to-fuel technology a reality.

An intervention from the NSW Environmental Protection Authority, which made a submission to the ACT urging a "precautionary" approach, was effectively the death knell for the project, and the health panel's report followed soon afterwards.

The panel received 91 submissions, overwhelmingly opposed, with a handful supporting.

Greens parliamentarian Shane Rattenbury said the findings were a win for the community and the environment. Liberal environment spokeswoman Elizabeth Lee said the government should accept the findings and reject the proposal, without delay.