UK environment secretary Ed Miliband should ditch plans for a hydrogen production facility on Teeside so that a hyperscale data center campus can be built, the region’s mayor has said.

Ben Houchen, mayor of Tees Valley, made the call in an interview with the Sunday Times.

He was speaking as Miliband ponders whether to give the go-ahead to H2 Teeside, a blue hydrogen production facility being planned by oil and gas giant BP at Teesworks, a former steel production plant that is now one of Europe’s largest brownfield development sites.

The hydrogen scheme requires the politician’s approval via a development consent order, which would allow BP to make a compulsory purchase of some of the land it requires. A decision had been expected in the summer, but it has been delayed.

Allowing the hydrogen plant to go ahead would likely scupper plans for a hyperscale data center on another part of the Teesworks site, Houchen said. As reported by DCD, Teesworks Ltd, the company behind the data center plan, said letting the hydrogen plant go ahead would impose planning restrictions on the area that would make it difficult to build a data center nearby.

Google is reportedly interested in occupying the data center, though this has yet to be confirmed by the cloud and search giant.

Houchen said: “You’ve got north of £100 billion ($133bn) worth of investment in AI on Teesside, or you’ve got a £600 million ($799m) hydrogen project. You’ve got a scheme that’s going to create a minimum of 4,000 jobs, or you’ve got a hydrogen project that creates 60 jobs.

“With all of this in play, why would you go for one rather than the other? You’re talking about something that’s four times the size of the largest project in America.”

While Houchen is correct that the developer of the data center is talking up the potential for it to deliver up to 5GW of IT capacity, in reality, it is likely the scheme would only offer a fraction of that initially, owing to power availability limitations. For context, 5GW would represent 13 percent of the UK’s total average energy demand for 2024 (36.4GW, per the National Grid).

Nonetheless, the data center project represents a significant investment, and the Sunday Times reports the scheme has caused a split in the government, with Miliband favouring approving the blue hydrogen project, and other ministers pushing for the data center to be built. Blue hydrogen uses natural gas as part of its production process, but is considered a low-carbon form of energy.

The data center has already received outline planning permission, and could help boost UK data center capacity.

A report released earlier this year revealed a need to deploy “at least” 6GW of AI-capable data center capacity across Britain by 2030 to remain competitive. That 6GW represents a threefold increase in the data center capacity available in the UK today.