BP Plc is abandoning its plans to construct the Teesside hydrogen plant over site clash with proposed data center project. The firm was to construct the hydrogen plant in England’s northeast but the large data center proposal has proven a hindrance. A planning application granted by local authorities for a data center on the same piece of land has rendered the two projects incompatible. Furthermore, the British energy giant also cited deteriorating demand. The company said it still expects to move ahead with its gas-fired power station with carbon capture at Teesside. It also expects to move ahead with its regional carbon storage scheme. BP’s hydrogen reversal comes as the company early this year pivoted its strategic direction back to oil and gas. It came from a failed multi-year bet on low-carbon ventures. The construction of the proposed Teesside data center is expected to be Europe’s largest.
Project Factsheet
Significance:
- BP cancels Teesside hydrogen plant after land conflict with approved data center.
- Another major pullback from BP’s low-carbon portfolio.
Key Issue:
- Data center approved on the same site → projects incompatible.
- Hydrogen demand in Teesside has weakened.
Outcome:
- Hydrogen plant scrapped.
- BP continues with carbon-capture gas plant and regional CO₂ storage project.
Context:
- BP shifting back toward oil & gas after multiple failed green investments.
- Northern England facing competing land pressures, including data centers and defense projects.
State of Affairs Regarding BP Plc on Teesside Hydrogen Plant
The decision to abandon construction of Teesside hydrogen plant by BP is one that underscores the company’s strain to find its footing. Over the last year, the company has endured major setbacks that have required a new market perspective. These include being spun off its global offshore portfolio, selling US onshore wind assets and exiting Australia’s massive green hydrogen hub. It also includes halting plans for a Dutch biofuels plant. The decision to scrap the hydrogen plan was BP’s. However, the UK government continues to provide a route for hydrogen projects in Teesside. This was noted by a Department of Energy Security and Net Zero spokesperson in a statement. The hydrogen demand situation in Teesside has also deteriorated as some major industrial consumers have either scaled back operations or postponed decarbonization plans. BP notes that this significantly increases their risk. Data centers aren’t the only facilities competing for land in northern England. Teesside is among 13 potential sites under consideration for new munitions factories.
