Oil giant withdraws application for major hydrogen project in Teesside

BP has shelved plans to build a major hydrogen project in Teesside in a fresh blow to Ed Miliband’s net zero plans. The Telegraph has the story.

The oil giant withdrew its request to the Government on Monday to build the project after it clashed with separate plans backed by Sir Keir Starmer to construct the largest data centre in Europe.

It comes after Downing Street selected a former steel site in Teesside as the home for its second AI Growth Zone, with Labour banking on the technology to help turbocharge the economy.

The two proposed sites were earmarked on overlapping plots of land, pitting the Energy Secretary – who was relying on the BP project to meet his net zero ambitions – against the Prime Minister and Peter Kyle, the Business Secretary.

BP said a decision by the Labour-led Redcar and Cleveland council to throw its weight behind the data centre ultimately made its project unviable.

In a letter to the Energy Department, a spokesman for the BP-backed H2Teesside project insisted its decision had “not been taken lightly”.

It said it still believed hydrogen had “an important role to play in the future energy market”.

A spokesman for BP also blamed “material changes in circumstances” including “a planning application being granted locally for a data centre on the same piece of land” for its decision to withdraw from the project.

Sir Keir has claimed that AI will help the Government deliver a “decade of national renewal”, with plans for the new AI growth zone now expected to be announced before Christmas.

Tensions between the Energy Department and Mr Kyle over the competing projects escalated to such an extent that the Business Secretary even explored legal routes to attempt to influence Mr Miliband’s decision.

Mr Miliband had already twice delayed a decision on whether to grant the development consent order (DCO) to start producing “blue” hydrogen from natural gas, and then capture and store the carbon emissions.

A decision was due on Thursday Dec 4, but it is understood that BP has withdrawn its application for the DCO ahead of an announcement in order to make way for the data centre to be built.

Read the full story here.