BP has formally withdrawn its application to develop the H2Teesside blue‑hydrogen project at the Teesworks site near Redcar, citing a newly approved data‑center proposal on the same land as a key factor. The H2Teesside project had been designed to produce 1.2 GW of blue hydrogen, a capacity that would have represented more than 10 % of the United Kingdom’s 2030 low‑carbon hydrogen target. The decision follows a planning application for a large data‑center, which the company described as a “material change in circumstances” that made the hydrogen project infeasible on the same site.
The withdrawal reflects a broader recalibration of BP’s low‑carbon strategy. In the past year, BP has scaled back several hydrogen initiatives, including the HyGreen green‑hydrogen project, and has shifted capital toward oil and gas production to strengthen its balance sheet. The data‑center conflict underscores the growing competition for prime industrial land, while market signals suggest a weakening demand for blue hydrogen from industrial consumers. BP’s spokesperson noted that the company remains committed to other Teesside projects, such as Net Zero Teesside Power and the Northern Endurance Partnership, which continue to pursue carbon capture and low‑carbon energy solutions.
BP’s Q3 2025 earnings provide context for the decision. The company reported revenue of $49.25 billion, up 12 % from the prior year, and earnings per share of $0.85, beating consensus estimates of $0.77 by $0.08. The earnings beat was driven by strong performance in the Upstream and Gas & Low‑Carbon Energy segments, offsetting a modest decline in the Customers & Products segment. BP’s management highlighted disciplined cost control and a favorable commodity price environment as key contributors to the earnings outperformance.
Management comments emphasize the strategic rationale behind the withdrawal. BP’s spokesman said, “Due to material changes in circumstances on the Teesworks site, including a planning application being granted locally for a data centre on the same piece of land, we have taken the decision not to progress the development of H2Teesside.” Tees Valley Mayor Ben Houchen welcomed the decision, noting that the data‑center would bring “thousands of high‑quality jobs” and position Teesside as a hub for AI and technology. BP’s leadership reiterated its commitment to the region’s broader low‑carbon agenda, citing ongoing investments in carbon capture and renewable energy projects.
Analysts have noted that BP’s withdrawal signals a tightening of its hydrogen portfolio, but they remain supportive of the company’s other Teesside initiatives. The move is seen as part of BP’s broader strategy to balance long‑term decarbonization goals with short‑term financial performance, particularly in light of the company’s strong Q3 earnings and its focus on core oil and gas operations. The decision may influence the hydrogen market by reducing the supply of blue hydrogen in the UK, potentially affecting pricing and demand dynamics for industrial consumers.
The withdrawal has several implications for BP’s future strategy. By reallocating resources away from the H2Teesside project, BP can free capital for higher‑yield oil and gas projects and for its remaining low‑carbon ventures. The company’s continued investment in Net Zero Teesside Power and the Northern Endurance Partnership suggests a shift toward projects with clearer regulatory pathways and stronger commercial prospects. For the hydrogen market, the decision highlights the importance of site suitability and market demand, reinforcing the need for integrated planning between hydrogen production and other industrial developments.
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