UK Delays BP’s H2Teesside Blue Hydrogen Plant Over Land Dispute

At the heart of Teesside’s biggest regeneration push, a high-stakes standoff is brewing. The UK government has just pushed the decision on BP’s H2Teesside blue hydrogen facility out to 30 October 2025, after South Tees Group (STG) threw its hat in the ring, staking a claim on the same parcel—for a huge AI data centre already signed off by Redcar and Cleveland Council. Both sides are waving the national flag: BP says its plant could hit over 10% of the UK’s 1GW hydrogen production goal by 2030, while STG argues its data centre is the keystone for the government’s new “AI growth zone.”

Local Land Rivalry

That patch of ground sits within Teesworks, the public-private venture built from the bones of the old Redcar steelworks. What started off half-owned by the South Tees Development Corporation has shifted to 90% private hands. STG insists it holds the deeds to the exact spot BP needs—and it locked in outline permission for its data centre back in summer 2025. Cue the DCO pause as ministers juggle competing visions.

Strategic Stakes

H2Teesside is touted as one of the nation’s largest blue hydrogen schemes, pairing steam methane reforming with carbon capture and storage to slash CO₂. BP argues this is a no-brainer for nudging the needle on the government’s net-zero pledges and supercharging industrial decarbonization, lessening the UK’s reliance on pure methane. On the flip side, the AI data centre would unleash hundreds of megawatts of digital firepower, tapping into Teesworks’ power network to run heavy-duty compute—and anchor a wave of high-value jobs.

Policy and Funding Crossroads

To break ground, H2Teesside needs a development consent order from the UK Department for Energy Security and Net Zero, and that’s tied to subsidies and clarity on CCS funding. Meanwhile, STG’s data hub rides a wave of local council backing and national momentum behind digital infrastructure. Inside Whitehall, the debate’s hot: pour fuel into hydrogen infrastructure or bet big on the AI growth zone?

Industrial Legacy and Site Challenges

Teesworks isn’t a blank slate. Old cast-iron foundations, steelmaking pollution and buried gas pipelines add layers of complexity. Earlier this year, BP even pulled the plug on its green hydrogen project HyGreen here, blaming shaky economics and shifting policy sands. Now, both camps must wrangle these legacy headaches before they can even think of laying foundations.

What’s at Risk

• Missed 2030 targets: H2Teesside alone could provide north of 100MW—over 10% of the 1GW hydrogen production target.
• Jobs and regeneration: hold-ups could stall hundreds of construction and operations roles across the North East.
• AI growth zone slowdown: STG’s data centre underpins regional digital ambitions.
• Investor confidence: uncertainty might spook future low-carbon or high-tech backers on Teesside.

Looking Ahead

When October 2025 rolls around, ministers will have some tough calls: pick one blueprint, or somehow mash together two very different visions for Britain’s industrial future. The outcome will set the tone for how we juggle hydrogen infrastructure with digital economy goals—right on reclaimed steelworks land. Can Teesside pull off both a mega blue hydrogen plant and a world-class AI data centre, or will one dream eclipse the other?

As the decision looms, everyone in the wider hydrogen sector is watching: will the UK show off nimble land-use policy for net-zero projects, or will digital ambitions swoop in and steal the spotlight at Teesworks?