What is the role of hydrogen in the future of our economies?
It is projected that hydrogen could account for 20% of the total energy demand of the world over the next 30 years, and will be one of the critical components of the decarbonized energy mix moving forward. There will be two fundamental drivers for hydrogen applications in the future. Firstly, in the industrial sector for energy intensive processes, such as the steel industry where hydrogen can be an alternative to lower emissions; and secondly, in the mobility sector, especially the heavy-duty fuel cell vehicles market.
Air Liquide has a unique position in hydrogen, with close to 2000 kilometers of pipeline, 53 large production units across the world, and sales of more than €2 billion. This total installed capacity of hydrogen in the world is primarily being used for refining and reducing the sulfur content in fuels. Today, we are seeing many new investments coming online in the hydrogen space, and they are mostly related to newer applications, green technologies, and the production of low carbon hydrogen. We need to keep in mind that operating electrolysers without low carbon energy would not make sense in terms of carbon footprint. Currently, there is enough installed capacity for current low carbon hydrogen demand, but we need to invest in building renewable electricity capacity as this demand is significantly increasing.
Air Liquide and Siemens Energy formed a joint venture for the European production of large-scale renewable hydrogen electrolysers. How advanced are we in this sector?
Hydrogen production has been around for decades, but hydrogen production in large volumes via electrolysis is now gaining momentum.
Air Liquide has strong experience in electrolyzer technology. As the demand requirements in the past were for smaller volumes, the plants we operate were sized adequately, and were typically based on alkaline technology. For the production of large hydrogen electrolysers, other technologies such as PEM (Proton Exchange Membranes) provide the flexibility adapted to the intermittency of renewable electricity. In 2021 in Becancourt in Canada we constructed the largest PEM electrolyser to date, of 20 megawatts, using hydroelectricity. In the Normandy (France) area, our announced 200 megawatt electrolyser project will be built also using the PEM technology in the framework of the partnership announced with Siemens Energy. What is clear is that we are scaling up with regards to low carbon hydrogen production.
In terms of business revenue, how does the expansion into low-carbon hydrogen translate into investment appetite?
In March 2021, we announced our new set of sustainability objectives, including our plans in the low-carbon and renewable hydrogen space. In March of 2022, we launched our five-year strategic plan, reinforcing the position of our sustainability commitments along with our financial objectives, and how the company’s sustainability ambitions are integrated into global performance moving forward. Today, our revenues from the sale of hydrogen are close to €2 billion. We aim to triple this to €6 billion by 2035 and are confident in our ability to reach our target due to the increased adoption of hydrogen we are seeing today. Over this period, our commitment is to invest €8 billion into the hydrogen supply chain. Of course, our objective is to produce renewable hydrogen, however, we know that carbon capture will be paramount in this transition for existing technologies to be decarbonized.
Are there other gasses than hydrogen Air Liquide is working on with potential for the green transition?
Many gases have a role to play in energy transition. We are focused on supplying low carbon gases that allow our customers to reduce their carbon footprint. To name a few, oxygen will play a key role in the energy transition. This is an area where we have over a century’s worth of experience, not just in the production, but also in developing new applications with our customers. To give you an example, a typical combustion process can be done with air, but if you enrich the air with oxygen (oxy-combustion), the same process can be done in a very energy efficient manner and significantly reduce the associated CO2 emissions. We could also mention that Air Liquide is working with the semiconductor industry - where we supply alternative molecules that are environmentally benign to replace high global warming gasses that are used for specific applications. We are also developing biomethane production capacities, enabling the conversion of waste into biogas, contributing to a circular economy.
Do you believe we, as a society, are on the right track to reach global targets set for 2050?
There is strong momentum globally. Access to renewable energy will play a key role towards meeting commitments. At Air Liquide, we are heavily supporting the development of renewable energy projects and are signing Power Purchase Agreements (PPAs) for massive scale up of renewable electricity sourcing in our energy mix. Committing to such PPAs provides visibility to energy providers and contributes to increased investment in renewable capacity. Carbon capture also represents an important lever as part of the transition phase. More globally, Air Liquide has set ambitious goals, including achieving carbon neutrality by 2050 and 33% reduction in our absolute CO2 emissions by 2035. We are also working hand in hand with our customers to decarbonize the industry and enable cleaner mobility. Together, we can build a more sustainable future.
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