BP has announced plans to build the UK’s largest blue hydrogen production facility in Teesside. Should the plans be successful, the plant will generate up to 1GW of blue hydrogen – one-fifth of the UK’s targeted production – by 2030 and provide jobs in a region which is emerging as central to the country’s energy transition.
Blue hydrogen is produced by converting natural gas into hydrogen and carbon dioxide (CO2) before the CO2 element is captured and permanently stored, thereby mitigating the emissions associated with the industrial production of gas. The plans were announced on March 18th and a final investment decision is expected in 2024. If the project is green-lighted, production is expected to begin in 2027.
The location of the development – which has been termed H2Teesside – is on the site of what was once Redcar Steelworks but is now part of Teesworks, Europe’s largest brownfield site and home to diverse decarbonisation projects. Collectively, these projects come under the title of Net Zero Teesside, an initiative led by BP which aims to capture up to 6 million tonnes of emissions annually from industrial sites in the region.
Teesside – and the surrounding areas – account for more than 5% of the UK’s industrial emissions and includes five of the country’s top 25 emitters. The collaboration with BP is apt as it sees an area undergoing transition through decarbonisation join up with an oil giant which is being rebranded as an “integrated energy company”. With close proximity to North Sea storage sites, pipe corridors and existing operational hydrogen storage, the BP development will be in a prime location to achieve their ambitious target.
In their announcement, BP said that it had secured the UK government’s support for the facility and will be partnered by gas distributors Northern Gas Networks and chemical component producers Venator. BP’s profits have suffered during the Covid-19 pandemic and through their policy of distancing the organisation from the fossil fuel energy sector. The latter resulted in significant costs incurred from exploration write-offs.
Already investing increasing amounts in offshore wind power, they announced in 2020 that they planned to reach net zero carbon emissions by 2050. BP’s chief executive, Bernard Looney, said: “Hydrogen will be a hugely important part of the energy future and we’ve announced plans for the UK’s largest hydrogen project”.
BP have also signed an agreement with Tees Valley Combined Authority to explore the potential for a hydrogen transport hub which would produce green hydrogen by electrolysing water using renewable power.