BP has withdrawn from plans to build a large hydrogen production facility at UK’s Teesworks in Redcar after a dispute arose over whether the site should instead house a major AI data centre. The company pulled out ahead of an anticipated government decision on the project, citing a “material change in circumstances” relating to the land.
The H2Teesside project had become embroiled in controversy after South Tees Group (STG), the landowner, sought planning permission for a data centre on the same site. Redcar and Cleveland Borough Council approved STG’s data centre proposal in August, prompting a clash over the future use of the land. STG has been approached for comment.
BP said the data centre application formed part of the “material change” that led to its decision to halt the hydrogen project. The firm had begun the process of applying for a development consent order (DCO) in March 2024. A DCO approval from ministers would have given BP compulsory purchase powers for the land, but the company withdrew its application before the government could issue a ruling.
Teesworks Ltd, part of STG, had strongly opposed BP’s plan, arguing in a formal letter that the data centre would be of “critical national importance”. BP had previously said it was open to finding a solution that would allow both developments to proceed side by side. The hydrogen plant was expected to support up to 1,300 construction jobs at its peak.
Despite the setback, BP said it remains committed to other regional initiatives, including Net Zero Teesside Power and the Northern Endurance Partnership.
Teesworks is operated as a joint venture between the publicly owned South Tees Development Corporation, under the Tees Valley Combined Authority, and private partners Martin Corney and Chris Musgrave. Their ownership stake rose from 50% to 90% in 2021, leaving 10% in public hands.
The Department for Energy Security and Net Zero confirmed BP’s withdrawal was solely the company’s decision. “We continue to provide a route for hydrogen projects in Teesside, including Tees Green Hydrogen, which is moving towards a final investment decision,” a spokesperson said.
