BP Pulls out of Building Teesside Hydrogen Plant

by Jason Arunn Murugesu (BBC) 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 (week of December 1, 2025).

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. Teesworks Ltd, which is part of STG, said it wanted to maximise the land's benefit for locals.

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 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 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.

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

"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. READ MORE

Excerpt from BBC: BP's decision to pull out of building a hydrogen plant has been described as "discouraging" by scientists working on decarbonisation.

Last week, the energy giant backed out of its plans at Teesworks in Redcar following a row with landowners over whether the site would be better suited to housing a data centre.

Prof Simone Abraham, Durham Energy Institute executive director, said the decision raised "a lot of questions about the commitment to hydrogen development among industry and government".

The Department for Energy Security and Net Zero (DESNZ) said the government had backed the industry with £500m. BP has been approached for comment.

Prof Abraham said the move was "discouraging" but that she still believed hydrogen would play an important role in future energy systems.

Decarbonisation expert Prof Dawid Hanak, from Teesside University, said BP's decision to pull out of the scheme would make it "challenging" to meet the country's goal of producing up to 10GW of low carbon hydrogen by 2030.

Prof Maria Sharmina at the Tyndall Centre for Climate Change Research pointed to the fact that BP had also suggested one reason it pulled out of the scheme was because the companies which it planned to sell its hydrogen to had "postponed decarbonisation plans".

She said: "You can build all the supply infrastructure you like, but if the industrial users who were meant to switch to hydrogen are pulling back, then the economic case collapses." READ MORE

Excerpt from ESG Today: The new announcement follows the establishment of a new strategy by bp in February 2025, reallocating capital to increase oil and gas investment and reducing low carbon energy to less than 5% of the company’s capex allocation.

Blue hydrogen is produced by converting natural gas into hydrogen and CO2, which is then captured and permanently stored. When initially announcing the project, bp stated that it had begun a feasibility study into the project to explore technologies that could capture up to 98% of carbon emissions from the hydrogen production process. READ MORE