Net Zero Teesside project given green light from Government
Work will begin by the end of the year
The Tees Valley Mayor says it is a "monumental" day for Teesside as the £4 billion Teesworks energy project has been given the green light by Government.
Work on Net Zero Teesside is set to begin by the end of the year - led by bp and Equinor - with operations expected to begin in 2027.
The project will establish the world’s first industrial-scale carbon capture, utilisation, and storage (CCUS) facility at Teesworks – with claims it will further enhancing Teesside’s reputation as the “Silicon Valley of Net Zero”.
The Tees Valley Combined Authority says the project is set to create 3,000 construction jobs and 1,000 permanent jobs once the plant is operational. It is expected to add up to £300 million to the economy per year.
The proposed power station 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.
The captured CO2 will then be transported by the Northern Endurance Partnership (NEP) by pipeline to a geological storage site under the North Sea, where it will be permanently and safely stored.
Tees Valley Mayor Ben Houchen says he has tirelessly worked for years in championing the transformation of Teesside into a global leader for green energy.
He added since taking office in 2017, he has led efforts to attract substantial public and private investment to the region, laying the groundwork for a future defined by clean industries and sustainable development.
Net Zero Teesside is the latest milestone in a long-term strategy to revitalise the region’s economy and create thousands of high-quality jobs for local people.
Mayor 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 provide power to 1.3million homes, help with energy security, but more importantly it will give generational job opportunities to local people as Teesworks becomes the new ICI – providing investment, training and well-paid jobs for local people.
“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
“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 and I’m delighted to deliver another promise as Mayor.
“This is a day that we look back on as the start of a golden generation for Teesside.”
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."
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 McDonald MP for Stockton North and PPS at the Department for Energy Security and NetZero said:
"Teesside has always been at the heart of British industry, and now, we’re leading the charge into the clean energy revolution. By investing in carbon capture technology, we’re not only creating good, highly skilled jobs, but we’re also protecting our environment and ensuring that Teesside plays a vital role in tackling the climate crisis. This is a win for our economy, our environment, and our communities."
Luke Myer, MP for Middlesbrough South & East Cleveland and co-chair of the CCUS APPG said:
“I am delighted to welcome the Government's announcement of billions of pounds of investment for Teesside. Advancing these track-1 projects will mean thousands of good jobs in green industries, and energy security into the future. Our region can and will be at the heart of the new era for clean energy investment and jobs."
Andy McDonald, MP for Middlesbrough and Thornaby East said:
“This is fantastic news for Teesside and underscores the Labour Government’s absolute commitment to not just to achieving Net Zero but simultaneously the renaissance of industrial Teesside.
“This bold endeavour will put Teesside right in forefront of the decarbonisation agenda creating high skilled, well paid and secure employment.”
Lola McEvoy, MP for Darlington said:
“I look forward to working closely with the businesses bringing wealth and opportunities to our area and contributing to our nation’s energy security. This is just the start of an exciting green industrial future for the North East under Labour.”
Major funding is also being given to the North West, which was confirmed by Prime Minister Sir Keir Starmer, the Chancellor Rachel Reeves and the Energy Secretary Ed Miliband on a visit to that region today.
Prime Minister Keir Starmer said: “We’re reigniting our industrial heartlands by investing in the industry of the future.
“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.”
Energy Secretary Ed Miliband said: “On Monday, 150 years of coal in this country came to an end. Today, a new era begins.
“By securing this investment, we pave the way for securing the clean energy revolution that will rebuild Britain’s industrial heartlands.
“I was proud to kickstart the industry in 2009, and I am even prouder today to turn it into reality. This funding is a testament to the power of an active Government working in partnership with businesses to deliver good jobs for our communities.”
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."
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.”
Alex Grant, SVP and head of country, UK for Equinor, said:
“We welcome this major milestone in progressing these two key projects and applaud the hard work and collaboration that has led us here.
“Equinor has been an energy partner with the UK for over 45 years and today’s announcement is a step for both Equinor and the UK to progress our energy partnership further.
“This will help decarbonise the country’s industrial heartlands and achieve its net zero ambitions whilst providing jobs and value creation.
“The UK will continue to be a key market for Equinor, building on our history of significant energy provision along its East Coast, which is transitioning from traditional oil and gas demand to renewables and low carbon options like CCS and hydrogen.”
Eni CEO, Claudio Descalzi, said:
“Today’s news is an important step towards the creation of a new business chain linked to the energy transition.
“HyNet will become one of the first low-carbon clusters in the world and the project will decarbonise one of the key energy-intensive industrial districts as well as unlock significant economic growth in this region of the UK.
“This commitment is clear evidence of how governments and industry can work together to implement pragmatic and effective industrial policies, in order to accelerate decarbonisation. On our side, it reaffirms Eni's role as a key partner with the UK in enabling its journey towards Net Zero.”
James Richardson, Acting Chief Executive of the Climate Change Committee, said:
“It’s fantastic to see funding coming through for these big projects. We can’t hit the country’s targets without CCUS so this commitment to it is very reassuring. It will no doubt provide comfort to investors and business about the direction of travel for the country.
“We know these projects will provide good, reliable jobs in communities that need them. It is important that prosperity for these parts of the country is built into a clean energy future.”
Emma Pinchbeck, Energy UK’s Chief Executive, said:
“CCUS is a tool in our armoury of technologies which we need to decarbonise parts of energy that we currently can't do with clean electricity, such as major industrial processes.
“The energy transition is gathering pace, and the development of CCUS here for industrial processes unlocks inward investment, creates jobs and helps areas with a proud history of engineering and industry pioneer the technologies of the future in the UK."
Olivia Powis, CEO of the Carbon Capture and Storage Association (CCSA), said:
“The Government’s confirmed support for carbon capture and storage and hydrogen demonstrates their commitment to the UK’s journey to net zero.
“Today’s announcement shows that decarbonisation does not mean de-industrialisation, and highlights the UK’s leadership in these important technologies.
“The industry has made significant strides towards deploying carbon capture projects and by establishing the first two CCUS clusters in the North West and North East of England, it means that we can deliver thousands of new highly skilled jobs whilst reducing our CO2 emissions and retaining existing jobs in our industrial areas in critical industries like cement and manufacturing across the UK.”
Celia Greaves, CEO of the Hydrogen Energy Association, said:
“This is a vital step forward, catapulting hydrogen towards long-term certainty we need in the UK. Supporting hydrogen at scale in two of the biggest UK industrial clusters is the government giving hydrogen another green light as a key component of its green energy ambitions. We particularly welcome the news that this will provide thousands of new jobs given the HEA’s solid focus on hydrogen’s role in delivering clean growth.
“Our own project map has built up a blueprint of hydrogen endeavours across all parts of the UK and this significant investment in carbon capture clusters is going to bring forward the first large scale projects we have seen in the country. What’s more, it will inject further enthusiasm for wider investment to power-up business confidence which will have a knock-on effect of continuing to position the UK as a global player in hydrogen technology and innovation.”
Clare Jackson, CEO of Hydrogen UK, said:
“We are thrilled to see the UK Government's commitment to advancing Track-1 clusters in partnership with the private sector. This initiative is a crucial step forward for regional development, driving economic growth, and creating high-quality jobs across the country.
“The integration of CCUS technology with hydrogen production is pivotal for achieving our net-zero targets. CCUS-enabled hydrogen not only provides a low-carbon, and scalable energy solution but also ensures the UK remains at the forefront of the global hydrogen economy.
“By moving forward with Track-1, we are laying the foundation for a cleaner, more resilient energy future for all.”