Government green light for bp's Net Zero Teesside project

The £4billion Net Zero Teesside project led by bp and Equinor  will establish the world’s first industrial-scale carbon capture, utilisation, and storage facility at Teesworks.

The confirmation of Government support will allow work to start by the end of this year – with operations expected to begin in 2027. It is part of a major energy drive from the Government covering Teesside and a site in the North West.

Today’s announcement confirms up to £21.7 billion of funding available, over 25 years, to make the UK an early leader in two growing global sectors, CCUS and hydrogen, to be allocated between the two clusters.

The Teesside project is set to create 3,000 construction jobs and 1,000 permanent jobs once the plant is operational and is expected to add up to £300million to the economy per year.

Prime Minister Keir Starmer said:  “We’re reigniting our industrial heartlands by investing in the industry of the future.

Prime Minister Keir Starmer (Image: Newsquest)

“For the past 14 years, business has been second-guessing a dysfunctional government – which has set us back and caused an economic slump. Today’s announcement will give industry the certainty it needs – committing to 25 years of funding in this groundbreaking technology – to help deliver jobs, kickstart growth, and repair this country once and for all.”

The proposed power station at Teesworks will generate up to 860 megawatts of low carbon electricity – enough to power up to 1.3 million UK homes. Up to two million tonnes of CO2 emissions from the power station will be captured each year – emissions which would otherwise be released into the atmosphere.

• READ MORE:   An important new phase for bp

The captured CO2 will then be transported by the Northern Endurance Partnership by pipeline to a geological storage site under the North Sea, where it will be permanently stored.

Louise Kingham, SVP Europe and head of country, UK for bp, said: “This announcement represents another step forward for the Northern Endurance Partnership and East Coast Cluster.

“Major projects like these have the potential to help stimulate economic growth – supporting thousands of jobs, helping UK companies prosper through the vast supply chains involved and creating the infrastructure to help major industrial companies with their decarbonisation plans.

“Collaboration is key in helping to progress and deliver the energy transition in the UK, and we look forward to continuing to work alongside the government and our partners to move these innovative projects forward.” 

 Tees Valley Mayor Ben Houchen said: “This is a monumental day for Teesside and my proudest achievement since becoming Mayor, and I want to thank the Government for giving the green light to this project.

“The NZT project will give generational job opportunities to local people as Teesworks becomes the new ICI – providing investment, training and well-paid jobs for local people.

• READ MORE: The biggest single investment in Teesside industry

“Teesworks has already transformed the site, secured billions of pounds of private investment and created thousands of good quality local jobs including the SeAH monopile offshore wind factory, the largest single investment by a South Korean company in the UK.

Mayor Ben Houchen (Image: TVCA)

“But this investment is on a scale not seen on Teesside since ICI. Teesside is no longer seen as an old industrial heartland in decline – we are now a global player leading the world once again.

“This is a day that we look back on as the start of a golden generation for Teesside.”

Chancellor of the Exchequer Rachel Reeves, said: “This game-changing technology will bring 4,000 good jobs and billions of private investment into communities across Merseyside and Teesside, igniting growth in these industrial heartlands and powering up the rest of the country. 

“Working in partnership with business is at the heart of our plan to deliver strong growth and investment, so we can rebuild Britain and make everyone better off”. 

Anna Turley MP for Redcar and Cleveland and Government Whip for the Department for Energy Security and NetZero said: “Today’s announcement shows this new Labour government wants Teesside to be at the forefront of its world-leading green industrial renaissance.

"This massive investment in carbon capture is a huge vote of confidence in our people and our industries, will attract more investment and enterprise and will make us one of the most important industrial clusters in the world.”

Chris Musgrave OBE, Chairman of Teesworks Ltd, said: "This is fantastic news for Teesside. The Government’s support for Net Zero Teesside means real opportunities for local people – creating jobs, attracting investment, and making our region a leader in clean energy.

“Over the past few years, we’ve been clearing the former steelworks and preparing the site for projects like this. It’s a huge step towards a greener future for us all, and I’m proud that the Teesworks site will be at the heart of it."

Over the next decade, projects on Teesworks will generate a significant boost in local revenues, with income from business rates expected to increase by £79 million annually once large-scale projects become fully operational, including battery storage, sustainable aviation fuels, and hydrogen fuel production.