The UK government and Tata has agreed a £1.2bn deal to secure its future and 5,000 out of 8,000 jobs in the UK, of which 4,000 are based at the plant.
Tata Steel boss T.V. Narendran said its factory was losing up to £1.5m a day.
Locals like Olivia Martin, whose father and partner work at Tata, told the BBC any job cuts could "have a massive impact" on peopleʼs lives.
"It keeps a lot of roofs above peopleʼs heads," said Ms Martin from Cwmafan.
The companyʼs plans involve switching from using blast furnaces powered by fossil fuels to electric arc furnaces which can be powered by using renewable energy.
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And instead of producing virgin steel, the plant would produce recycled steel.
The UK government has said the deal "has the potential to safeguard over 5,000 jobs across the UK".
ʼBody blow to thousands of familiesʼ
Torfaen council leader Anthony Hunt, who also represents the Welsh Local Government Association on finance, said "clarity and support are urgently needed for the workers at this incredibly worrying time".
"Any job losses on this scale would be body blow to thousands of families, and the wider shockwaves would be keenly felt in the economy and communities," he added.
Ian Price, boss of business leadersʼ group CBI Wales, said: "Itʼs crucial that policymakers and local businesses now step in to provide support and equip those Tata workers facing possible redundancy with the tools they need to make a swift return to the job market.
"Their expertise is vital amid a growing skills gap facing so many industries."
The Welsh governmentʼs Climate Change Minister Julie James said: "The investment is a good thing, although we would argue they should have done it a considerable time ago. The investment of course is welcome in the steelworks, but itʼs a drop in the ocean for what they need for the proper decarbonisation of the steelworks."
She added the announcement was made without anything to reassure the workforce and the surrounding community.
Economy Minister Vaughan Gething said he would meet Tata again next week to continue talks, after meeting with union officials on Friday.
"The Welsh government will continue to work closely with the trade unions and the company to do everything we can to minimise job losses," he added.
The Welsh Conservatives economy spokesman Paul Davies said: "Without UK government investment, there would be a bigger risk to jobs and steel production in an area dependent on the industry.
"With negotiations still ongoing, the prime minister is securing the future of steel production in Port Talbot, which will be more focussed on reducing carbon emissions and protecting the environment."