Industrial Gases: Hidden Electricity Consumers and Climate Solutions

The Role of Industrial Gases

• 💡 Industrial gases like nitrogen, oxygen, and hydrogen are essential for manufacturing everyday products, from electronics and beverages to steel and chemicals.
• 🏭 Companies like Linde, Air Products, and Air Liquide produce these gases, controlling a significant portion of the global market.
• 📱 Their gases are crucial for industries such as steel manufacturing, refrigeration, chemicals production, and even rocket launches.

Energy Intensity and Emissions

• ⚡ The production of industrial gases is highly energy-intensive, leading these companies to be significant electricity consumers, comparable to small European countries.
• ⚠️ While these companies help customers avoid substantial CO2 emissions (e.g., through oxygen enrichment in steelmaking or hydrogen for cleaner fuels), their own scope 1 and 2 emissions are comparable to major oil and gas or retail giants.
• 🎯 Linde aims to reduce its scope 1 and 2 emissions by 35% by 2035 and achieve climate neutrality by 2050.

Reducing Electricity Consumption and Sourcing

• 🔌 Linde is focused on reducing electricity consumption through operational innovation and investing in technologies like the Flex ASU, designed to optimize production with renewable energy availability.
• 💡 The company is increasing its use of renewable energy, aiming to double its consumption through Power Purchase Agreements (PPAs) for new generation facilities.
• 📉 While 47% of Linde's electricity is low-carbon, only 12% comes from directly signed PPAs, with the rest relying on energy attribute certificates, which are seen as less impactful for driving new renewable development.

The Future of Hydrogen

• 🚀 Clean hydrogen is viewed as a significant opportunity for industrial decarbonization, with over 500 projects globally reaching FID or under construction, representing substantial investment.
• ⚙️ Linde is involved in projects supplying low-carbon hydrogen for ammonia and ethylene production, utilizing technologies like autothermal reforming with carbon capture.
• 🔋 Challenges for renewable hydrogen (produced via electrolyzers) include scale, maturity of technology, high capital costs for electrolyzers, and the need for access to low-cost renewable electricity.

Navigating Policy and Economic Uncertainty

• 📈 Linde's growth is intrinsically linked to global economic activity and industrial production indices.
• 🌍 The company navigates policy uncertainties by focusing on projects with sound economics and binding long-term offtake agreements.
• 📊 The Hydrogen Council advocates for policy stability and consistency from governments to further accelerate hydrogen development and unlock potential market growth.