A major twist in Teesside’s clean energy ambitions has rocked the region — BP has officially walked away from building its landmark hydrogen plant at Teesworks. But here’s where things get complicated: the withdrawal isn’t just about corporate strategy — it’s tied to a fierce local debate over what the land should really be used for. A hydrogen hub to power the green transition, or a massive data centre to fuel the digital age? Opinions are sharply divided.
The oil and energy giant had been preparing to develop its H2Teesside project in Redcar, part of a wider push to make Teesside a leader in low-carbon hydrogen production. A key government decision on whether construction could go ahead was expected this week. However, BP abruptly pulled the plug before that could happen, citing a “material change in circumstances” concerning the land in question.
That ‘change’ refers to a competing plan by landowners South Tees Group (STG), whose affiliate, Teesworks Ltd, has been pursuing permission to construct a large-scale AI data centre on the same site. The company says the data centre would better serve local communities by driving investment and job creation. And here’s the part most people miss — STG insists its proposal isn’t just commercially beneficial, but of “critical national importance.”
In BP’s view, the data centre plan formed part of the “material change” it referenced when explaining its exit. Nevertheless, the firm stressed that its broader commitment to Teesside remains intact. A spokesperson reaffirmed BP’s ongoing investments in Net Zero Teesside Power and the Northern Endurance Partnership, saying the company “remains an active partner in the region.”
BP had started work in March 2024 on securing a Development Consent Order (DCO) — a special government approval needed for projects deemed nationally significant. If granted, the DCO would have given BP the authority to compulsorily purchase the land it required. Yet before the government could act, Teesworks Ltd successfully obtained planning permission in August from the Redcar and Cleveland Borough Council to build the data centre instead.
The clash between BP’s clean energy ambitions and STG’s tech vision sparked heated debate. BP had previously signaled flexibility, expressing willingness to negotiate so both developments could potentially coexist. The hydrogen project, the company claimed, could have generated up to 1,300 construction jobs at its peak — a major economic boost for the area.
Teesworks, the development site at the center of this dispute, operates as a joint venture. It combines public ownership through the South Tees Development Corporation, managed by the Tees Valley Combined Authority (TVCA), with private involvement from Teesside businessmen Martin Corney and Chris Musgrave. The private partners’ stake in Teesworks grew dramatically over time — from 50% initially to 90% by 2021, leaving just 10% in public hands. According to Musgrave, now chairman of Teesworks Ltd, the company’s mission is clear: “to ensure that Teesworks delivers maximum benefit for local people while securing Teesside’s place at the forefront of the UK’s fast-growing tech and clean energy sectors.”
Meanwhile, the Department for Energy Security and Net Zero (DESNZ) confirmed BP’s withdrawal as the company’s own decision. A spokesperson emphasized that the government’s route for hydrogen development in Teesside remains open, highlighting other ongoing initiatives like Tees Green Hydrogen, which is approaching a final investment decision, and several additional projects expected to create skilled, long-term jobs across the region.
But the question remains — what should Teesside prioritize? The cleaner, greener energy future promised by hydrogen, or the digital powerhouse potential of a high-capacity AI data centre? Could both coexist, or must one vision give way to the other? Share your thoughts: is this a missed opportunity for sustainability, or a smart pivot toward technological growth?
