BP has withdrawn its H2Teesside blue-hydrogen challenge at Teesworks in Redcar, pulling out days earlier than a key Authorities resolution and blaming a ‘materials change in circumstances’ after the identical website was lined up for a significant AI knowledge centre as a substitute.
The transfer ends BP’s bid to safe a growth consent order (DCO) for H2Teesside, a nationally vital infrastructure challenge that might have given the corporate powers to compulsorily buy round 115 acres of land on the previous steelworks website. The DCO resolution had been anticipated this week.
It follows months of wrangling between BP and landowners South Tees Group (STG) and Teesworks Ltd, which efficiently secured define planning permission in August for an AI knowledge centre on the very plot BP had hoped to make use of for hydrogen manufacturing.
BP stated the emergence of the info centre plan fashioned a part of the ‘materials change in circumstances’ affecting the land and finally prompted its withdrawal.
A spokesperson for the oil large famous, “We proceed to maneuver ahead with different initiatives on Teesside, together with our investments in Web Zero Teesside Energy and the Northern Endurance Partnership, and stay an energetic accomplice within the area.”
Hydrogen versus hyperscale on Teesworks
The H2Teesside scheme had been put ahead as one of many UK’s flagship blue-hydrogen initiatives. BP’s plans concerned splitting pure fuel into hydrogen and capturing CO2, making a large-scale hydrogen hub that might feed into the area’s rising carbon seize and storage community and act as an anchor load for transport and industrial customers.
BP has beforehand argued that H2Teesside was of ‘nationwide significance’, and that it might make a ‘vital contribution’ in direction of the Authorities’s goal of as much as 10GW of low-carbon hydrogen manufacturing capability by 2030, probably supplying greater than 10% of that quota. It additionally claimed “An information centre wouldn’t ship comparable ranges of public profit.”
The corporate started the DCO software course of in March 2024. Had the Authorities granted consent this week, BP would have gained the ability to compulsorily purchase the land, regardless of the landowner’s competing ambitions.
As a substitute, Teesworks Ltd – which is a part of STG – went to Redcar and Cleveland Borough Council with its personal proposal: a big AI-focused knowledge centre, which councillors backed in early August.
In a letter setting out its opposition to BP’s DCO bid, STG argued that the info centre was of ‘vital nationwide significance’, and stated it needed to maximise the land’s long-term profit for the local people. BP, for its half, had insisted it was in search of a place of co-existence and was “prepared to have discussions aimed toward discovering an answer that might allow each developments to co-exist.”
Beforehand, BP had stated the hydrogen plant would help a ‘peak development workforce of 1,300 jobs’.
Google rumoured to be concerned about Teesworks knowledge centre
The battle over the Teesworks plot has more and more been framed as emblematic of a wider dilemma for the UK: methods to steadiness land-hungry AI and cloud infrastructure towards heavy trade and internet zero initiatives.
In August, it was reported that the AI knowledge centre proposal at Teesworks was already in ‘superior discussions’ with a possible occupier. By September, sources near these talks prompt that Google was eyeing the Teesworks website, with discussions described as ‘finely poised’ and the potential for a deal being signed earlier than Christmas. No such deal has materialised publicly as of writing.
The intrigue round what to do with Teesworks deepened much more as the positioning itself has been designated an AI Development Zone by the Authorities.
In accordance with earlier reporting, the row even uncovered tensions inside Whitehall, with Prime Minister Keir Starmer and Enterprise Secretary Peter Kyle stated to be backing a number of knowledge centres at Teesworks, whereas Vitality Secretary Ed Miliband was reported to be extra supportive of BP’s hydrogen proposal.
What subsequent for Teesside’s hydrogen ambitions?
The Division for Vitality Safety and Web Zero (DESNZ) was eager to emphasize that the choice to tug out of H2Teesside was made by BP.
“We proceed to supply a route for hydrogen initiatives in Teesside, together with Tees Inexperienced Hydrogen, which is transferring in direction of closing funding resolution, together with a number of different initiatives creating high-quality jobs for the area,” a spokesperson stated.
BP likewise emphasised that it isn’t strolling away from Teesside solely, pointing to its stakes in Web Zero Teesside Energy and the Northern Endurance Partnership. These initiatives purpose to decarbonise energy era and heavy trade through gas-fired era with carbon seize and a shared CO₂ transport and storage community within the North Sea.
Nonetheless, the loss of a giant blue-hydrogen plant that BP had hoped would contribute greater than 10% of the UK’s 2030 hydrogen capability goal raises questions over how that shortfall might be made up – and the place future hydrogen hubs might be positioned.
For Teesworks, the AI knowledge centre plan stays in pole place, with or and not using a closing deal involving Google. The positioning’s AI Development Zone standing and the broader push to draw AI-related funding to the UK counsel that extra digital infrastructure might observe, significantly if the land now free of the H2Teesside proposal is absolutely dedicated to knowledge centres.
