After months of delay, the industrial gas major scrapped the plans due to “material changes” at the Teesworks site. In October, BP announced it was seeking a Development Consent Order (DCO) from the government, but it has now been withdrawn.

H2 View understands that both the hydrogen facility and the data centre could not be built on the same piece of land.

Nevertheless, BP confirmed it will continue to move forward with other projects in Teesside, including investments in its Net Zero Teesside Power (NZT) and Northern Endurance Partnership (NEP).

While Tees Valley Mayor Ben Houchen said the region would continue working with BP on its wider £4bn plans, he praised the company’s pragmatism in scrapping the blue hydrogen project.

“BP’s hydrogen project faced a number of challenges, and while I know this won’t have been an easy decision, I welcome their pragmatism,” Houchen said. “We’ve got a responsibility to make sure [the land] is used to deliver the biggest possible benefit for local people.

“A cutting-edge data centre will create more long-term jobs, attract more investment and deliver greater future-proof growth than any alternative.”

The announcement comes shortly before the Department for Energy Security and Net Zero (DESNZ) was expected to rule on BP’s plans.

In October, BP sought compulsory purchase powers at the Teesworks site – essentially a legal mechanism that would force the sale of the land it required, even if South Tees Group (STG), which had approved plans for a data centre, refused to sell.

STG had formally objected to H2Teesside earlier this year, arguing that the hydrogen and carbon capture project would make its proposed data centre unviable.

BP told H2 View at the time that it was willing to pursue a “position of co-existence” that would allow both developments to proceed.

However, the company reportedly faced parallel headwinds. Previous reports indicated BP could scale back or abandon the 1.2GW project due to offtake challenges.

H2Teesside stood as one of the firm’s only remaining major clean hydrogen projects after it announced it would limit further hydrogen and carbon capture investments as part of its reset towards oil and gas expansion.