Published by Todd Bush on February 28, 2025
Air Products Cancels 3 Projects While French Rival Resets Priorities in the Face of Fickle New US Administration
In moves that may signal a corporate retreat from big-ticket energy-transition projects in the US, the industrial gas maker Air Products and Chemicals is pulling back on major investments, while Air Liquide says several of the hydrogen initiatives it has committed to will depend on the alternative energy policies of the new administration of Donald J. Trump.
>> In Other News: BP Revises Strategy, Maintains Selective Investment in Hydrogen Amid Broader Cuts to Green Energy Spending
Air Products’ emphasis on massive low-carbon hydrogen projects in recent years led to the ouster of its longtime CEO Seifi Ghasemi earlier this month.
The new CEO, Eduardo Menezes, has wasted no time taking the axe to a few of his predecessor’s plans. Menezes is canceling three US projects: a green hydrogen plant in New York, an agreement to supply hydrogen to a sustainable aviation fuel (SAF) facility in California, and a carbon monoxide plant in Texas. As a result of the cancellations, the company will book a charge of up to $3.1 billion.
In Massena, New York, Air Products had planned to spend $500 million on water electrolysis units that would have produced 35 metric tons (t) per day of green hydrogen. The New York Power Authority was to supply hydroelectric power generated at the nearby Saint Lawrence River to the facility.
Air Products now says that hydrogen made using existing hydroelectric power does not qualify for tax credits under the US Treasury Department’s newly enacted section 45V rules for hydrogen production. Moreover, local markets for hydrogen in transportation have been slow to develop, the firm says.
Because of challenging commercial aspects, Air Products says in a statement, it has also terminated an agreement to supply hydrogen to an SAF facility that World Energy is planning in Paramount, California.
World Energy plans to spend $2 billion on a plant that would convert used oils like fry grease into 1.3 billion L per year of SAF. Air Products was going to supply conventional hydrogen, made from natural gas, to the facility and aimed to ultimately supply the site with low-carbon hydrogen.
And what it calls unfavorable project economics have prompted Air Products to walk away from a carbon monoxide plant it had intended to build in Texas City, Texas. Set to be the largest single source of CO in the world, the plant would have supplied the raw material to a nearby Eastman Chemical acetic acid facility.
But after Eastman and Air Products reached their agreement in 2023, Eastman sold the Texas City site to Ineos.
The three projects aren’t the only recent Air Products cancellations. Under Ghasemi’s watch in December, the company canceled a $4 billion green hydrogen project it intended to build in Texas with the energy firm AES. That plant would have produced 200 t of hydrogen per day.
Air Products is not halting every big new project. Its $5 billion green hydrogen facility with partner ACWA Power in NEOM, Saudi Arabia, is nearly 80% complete and due to begin production by the end of 2026. The firm is also continuing with the Louisiana Clean Energy Complex, a project that will make blue hydrogen from natural gas and capture and store the by-product carbon dioxide. The company is seeking equity partners for that project, which it expects to start up in 2028.
Separately, the CEO of Air Liquide is casting doubt on hydrogen projects the French company has been planning. In 2023, the administration of Joe Biden selected seven projects that would each receive about $1 billion in funding as part of the US Department of Energy’s Regional Clean Hydrogen Hubs program. Together, the projects would produce about 3 million t of hydrogen per year. Air Liquide was chosen as a partner for six of them.
In a conference call with reporters, Air Liquide CEO François Jackow said the program’s two blue hydrogen projects—slated for the Gulf Coast and Appalachia—“are probably on top of the list to be pursued,” according to a report from Reuters.
The four other projects would make hydrogen via renewable energy–powered electrolysis. They will depend on the Trump administration’s renewable energy policies, Jackow said. And so far, the administration has shown itself to be hostile to spending on such projects.
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