BP Bows Out of Teesside Hydrogen Project, Paving Way for AI Hub

2025-12-02 industry

Teesside, Tuesday, 2 December 2025.
BP’s exit from H2Teesside highlights the struggle in balancing clean energy projects with tech demands. This shift allows a major AI data centre, raising questions about the UK’s net zero path.

BP Exits Amidst Land Controversy

BP’s decision to withdraw from the H2Teesside project came after a contentious debate over land use at the Teesworks site. The landowner, South Tees Group, pushed for a data centre, claiming it would provide more long-term benefits and jobs. BP cited this push as a ‘material change in circumstances’, which led to their exit [1][2].

Implications for UK’s Hydrogen Goals

The H2Teesside project, announced in 2021, was set to produce 1.2 GW of blue hydrogen, contributing significantly to the UK’s 2030 hydrogen production targets. Its cancellation raises concerns about meeting these goals, as the project was expected to provide over 10% of the target [3][4].

AI Data Centre: The New Focus

With BP stepping back, an AI data centre is now the focal point for the Teesworks site. This shift is seen as aligning with the UK’s vision of Teesside as an ‘AI Growth Zone’, despite fears about the rising electricity demand which is expected to more than double by 2030 [1][5].

Continued Commitment to Teesside

Despite the setback, BP remains committed to other projects in Teesside, such as the Net Zero Teesside Power and the Northern Endurance Partnership. These initiatives aim to support the region’s clean energy transition and reflect BP’s ongoing presence in the area [2][6].

Balancing Tech and Clean Energy

The situation at Teesside highlights broader challenges in balancing tech development with clean energy initiatives. As sectors like AI expand, ensuring adequate policies and planning for low-carbon projects becomes crucial. The UK government faces pressure to support both technological growth and its net zero commitments [4][7].

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blue hydrogen BP withdrawal