Teesside can be heart of UK tech, mayor says

BP and landowners South Tees Group had competing plans for part of the former Redcar Steelworks site

Tees Valley Mayor Ben Houchen has said the news that BP is no longer seeking to build a hydrogen plant on land earmarked for an AI data centre will help to put the area "at the heart" of the UK's tech industry.

The fuel giant pulled out of plans for the plant at Teesworks in Redcar following a row over whether the site would be better suited to housing a data centre instead.

It cited a "material change in circumstances" to the land that the plant had been due to be built on as part of its decision on Monday.

Houchen said it cleared the way to build an AI data centre, which would "create more long-term jobs, attract more investment and deliver greater future-proof growth".

BP's project, H2Teesside, had been mired in controversy after landowners South Tees Group (STG) sought permission to build a data centre instead.

Houchen said he would continue to work with the firm on Net Zero Teesside (NZT), a gas-fired power station with carbon capture and storage capability.

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

Houchen said the authority had a responsibility to make sure the site was being used to "deliver the biggest possible benefit for local people".

He said BP's decision to pull out "clears the way for what could be the biggest private investment Teesside has ever seen".

"BP's hydrogen project faced a number of challenges, and while I know this won't have been an easy decision, I welcome their pragmatism," the Conservative peer said.

"We'll continue working closely with BP to deliver their world-first £4bn NZT carbon capture scheme - a critical part of Teesside's industrial future."

The mayor said land on the former steelworks site was "limited" and "investor interest is high".

"A cutting-edge data centre will create more long-term jobs, attract more investment and deliver greater future-proof growth than any alternative," he said in a statement. "This is absolutely the right move for Teesside."

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.