A major industrial twist has shaken Teesside — BP has officially withdrawn from building its long-anticipated hydrogen plant at Teesworks. The move comes amid mounting tensions and a heated debate over whether the same plot of land should instead host a massive data centre — a decision that could reshape the region’s economic direction for decades.
The UK government had been preparing to announce whether BP’s H2Teesside hydrogen facility in Redcar could proceed this week. But before that ruling was issued, BP abruptly backed out, citing what it described as a “material change in circumstances” involving the land in question.
And here’s where it gets controversial: that “change” appears to refer to a rival plan put forward by the South Tees Group (STG) — the landowners behind Teesworks — who’ve been pushing to develop a high-tech AI data centre on the very same site. STG’s associated company, Teesworks Ltd, argues that a data centre would deliver more immediate value to local communities and align with Teesside’s emerging role as a digital powerhouse.
BP acknowledged that the data centre proposal played a role in its decision. However, the company maintains that it remains committed to Teesside and continues to invest heavily in other regional projects, including Net Zero Teesside Power and the Northern Endurance Partnership. Those initiatives are seen as crucial to advancing the UK’s clean energy goals.
Earlier this year, in March 2024, BP began the process of securing a Development Consent Order (DCO) — a legal requirement for major national infrastructure projects. Had the government approved that order as expected on Thursday, BP would have been granted the authority to compulsorily purchase the necessary land, effectively overriding competing plans.
But Teesworks Ltd fought back hard. Back in August, it secured independent planning permission from Redcar and Cleveland Borough Council to construct a gigantic AI-driven data centre instead — a project that STG later described as being of “critical national importance.” That counteroffensive effectively blocked BP’s hydrogen vision.
Interestingly, BP had previously suggested that both the hydrogen facility and the data centre might be able to coexist peacefully. The company proposed talks to explore possible collaboration, noting that the hydrogen project would have created roughly 1,300 construction jobs at its peak — a significant boost for the regional economy.
Teesworks itself operates as a joint venture between the publicly funded South Tees Development Corporation (overseen by the Tees Valley Combined Authority) and private investors Martin Corney and Chris Musgrave. Initially, the businessmen held half the shares but their stake was increased to 90% in 2021, leaving only 10% under public control.
Chris Musgrave, chairman of Teesworks Ltd, reaffirmed that the focus remains squarely on maximizing public benefit. “Our goal is to make sure the Teesworks site delivers lasting value for local people and helps position Teesside at the cutting edge of both the UK’s clean energy and tech industries,” he said.
Meanwhile, the Department for Energy Security and Net Zero (DESNZ) confirmed that BP’s withdrawal was entirely the company’s own decision. In a statement, the department emphasized that Teesside’s hydrogen ambitions aren’t dead: “We continue to support a pathway for hydrogen projects, such as Tees Green Hydrogen, which is nearing its final investment stage, alongside several other major initiatives that promise to create high-quality jobs for the region.”
So, what does this mean for Teesside’s future? Is the data centre truly a smarter bet than a hydrogen hub — or has the region just lost a vital foothold in the UK’s hydrogen economy? Should digital infrastructure take priority over clean energy development? Share your thoughts in the comments — this debate is far from over.
