The British energy group BP is divesting its stakes in two major climate projects in northeast England. The projects affected are the Net Zero Teesside CCS power plant and the Northern Endurance Partnership for carbon storage beneath the North Sea. This move follows mounting pressure from investors demanding higher profits rather than costly climate investments. At the same time, the costs for carbon capture and transport are rising significantly faster than planned. For the UK, this withdrawal poses a problem, as these climate projects were considered a vital component of industrial decarbonization, and billions in government support had been earmarked for them. (theguardien: 07.05.26)
Climate Projects Lose Economic Basis
Net Zero Teesside was intended to be the UK’s first gas-fired power plant featuring comprehensive carbon capture. The facility was designed to capture the carbon dioxide generated during operations and store it permanently. Concurrently, the Northern Endurance Partnership planned a pipeline network beneath the North Sea, where the CO2 was to be deposited in underground storage reservoirs.
For years, the British government touted these initiatives as a key technology for energy-intensive industries. The aim was to enable steelworks, chemical plants, and gas-fired power stations to continue operating. However, investment costs are now rising massively. Moreover, in many places, robust business models for the long-term operation of such facilities are lacking.
Investors Push Energy Major Back Toward Oil and Gas
The energy giant BP is now increasingly reorienting its strategy toward its traditional oil and gas business. The company is responding to demands from major investors for higher returns. Consequently, long-term decarbonization projects are coming under growing pressure. High-cost climate projects, in particular, are under scrutiny.
CCS facilities, above all, consume enormous sums for construction, infrastructure, and storage. At the same time, they generate hardly any direct revenue. Without substantial government support, many projects can scarcely be operated economically. It is precisely this problem that is now weighing on several European energy initiatives.
Doubts over CO2 Storage Are Mounting
While the British government remains committed to its CCS strategy, doubts regarding its practical implementation are growing. Many projects are facing delays or significant cost overruns. Furthermore, the question of who bears long-term liability for potential risks associated with CO2 storage remains unresolved.
BP’s withdrawal, therefore, affects not merely individual projects; it simultaneously undermines the credibility of an entire industrial policy. For years, carbon capture was regarded as a bridging technology between fossil fuels and climate goals. Now, however, it is becoming apparent that economic interests and political mandates are increasingly diverging.