Air Products Talks Up Blue Hydrogen After CEO Swap

Air Products chose not to give any prominence to its incoming leadership team in the company’s Q1 2025 earnings call today.

Adjusted EBITDA increased 1%, with margin improvement attributed to favorable pricing and business mix, although volume declined 2% due to the LNG divestment to Honeywell. Analyst sentiment was ‘neutral to slightly positive,’ according to Seeking Alpha commentary.

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In a low-key session where all questions were handled by Chief Financial Officer Melissa Schaeffer, the only insights of note centered around the industrial gas major’s ongoing discussions to secure equity partnerships and offtakers for its $4.5bn blue hydrogen project in Louisiana.

The facility’s progress remains on track, but the crucial need for partners looms large for the megaproject.

“It’s being executed on the normal course,” Schaeffer said, adding that the Louisiana project teams had been “in active discussions” with potential partners.

“The teams have been focused on going out and having the right conversations with parties that would be interested in equity partnerships, coupled with offtake,” she said.

These discussions are concentrated largely in Asia, Japan, and South Korea, said Schaeffer, but not exclusively.

An equity partnership approach would limit Air Products’ capital spend on the plant and deliver an anchor offtake customer. In the process, it would de-risk a development at a time when Air Products’ clean hydrogen investments face extra internal and external scrutiny.

The plant should be ready for 2028 and is slated to produce 1,700 tonnes of blue hydrogen per day. Air Products intends to flow much of the output into its Gulf Coast hydrogen pipeline, with a portion being turned into ammonia for export. CO2 from the plant will be sequestered in geological formations.

The presentation follows on from long-term CEO Seifi Ghasemi being replaced this week by former Linde executive Eduardo Menezes, following a period of pressure from investment firm Mantle Ridge.

Eduardo Menezes, who was confirmed as new CEO on Tuesday, only spoke briefly during the results call. He said he had met some large shareholders in recent weeks to understand their priorities.

There has been intense market and shareholder scrutiny over Air Products’ clean hydrogen strategy, one of its ‘twin pillars’ alongside industrial gases.

Menezes will take over with a remit to address investor concerns on CAPEX and Air Products’ $15bn clean project pipeline – including its blue and green hydrogen developments.

With over 110 hydrogen production plants across 25 countries, GWGI’s H2 Intelligence reports that Air Products produces 3.01 million tonnes per annum (mtpa), primarily from steam methane reforming (SMR).

Air Products plans to introduce more than 1.4 mtpa of clean hydrogen by 2033 – by comparison, competitors Linde and Air Liquide aim to add 0.72 mtpa and 0.59 mtpa, respectively, in the same period.

Outgoing CEO Seifi Ghasemi said this reliance on grey hydrogen will disappear within a decade. “In the long term, we are going to make only blue,” he stated. “Fifteen years from now, we will not have any SMRs running.”

Investment firm Mantle Ridge, which holds a $1.3bn share in Air Products, was instrumental in driving the management changes.

It proposed a replacement CEO, in addition to four new directors, and argued the board overhaul would help transform the company from ‘laggard to leader.’ It released ‘A Case for Change’ presentation in December to address what it termed a ‘flawed strategy.’