BP pulls out of building Teesside hydrogen plant

H2Teesside would have been one of the largest blue hydrogen plants in the UK, BP said

BP has pulled out of building a hydrogen plant on Teesside following a row over whether the site would be better suited to housing a data centre instead.

A government decision on whether the plant at Teesworks in Redcar could be built had been due this week.

But the energy firm backed out before the decision could be made, citing a "material change in circumstances" to the land that the plant had been due to be built on.

The project, H2Teesside, had been mired in controversy after landowners South Tees Group (STG) sought permission to build a data centre there instead. STG has been approached for comment.

BP said the data centre planning application had been part of the "material change in circumstances" the land had faced.

A spokesperson said: "We continue to move forward with other projects on Teesside, including our investments in Net Zero Teesside Power and the Northern Endurance Partnership, and remain an active partner in the region."

BP and Teesworks Ltd had competing plans for part of the site in Redcar

BP began the application process for a development consent order (DCO), which is required for nationally significant infrastructure projects, in March 2024.

If the government had granted the firm a DCO on Thursday, it would have been given the power to compulsorily purchase the land it needs.

But Teesworks Ltd, which is part of STG, had attacked the plans and in August received planning permission from Redcar and Cleveland Borough Council to build a giant AI data centre there instead.

In a letter detailing its opposition to BP's plans, STG claimed the proposed data centre was of "critical national importance".

BP previously said it was willing to have discussions aimed at finding a solution "that would enable both developments to co-exist".

Previously, it had said the development would have had a "peak construction workforce of 1,300 jobs".

Teesworks is run as a joint venture between the publicly owned and funded South Tees Development Corporation, led by the Tees Valley Combined Authority (TVCA), and Teesside businessmen Martin Corney and Chris Musgrave.

The men initially owned 50% of the shares in Teesworks, but that increased to 90% in 2021 with the remaining 10% staying in public hands.

The Department for Energy Security and Net Zero (DESNZ) said the decision to pull out had been made by BP.

"We continue to provide a route for hydrogen projects in Teesside, including Tees Green Hydrogen, which is moving towards final investment decision, along with several other projects creating high-quality jobs for the region," a spokesperson said.