The comments from CEO Francois Jackow followed President Trump’s decision to freeze federal funding for clean energy projects, and came as Air Liquide announced in an earnings call that it expects more final investment decisions (FID) to be pushed back to the second half of this year as customers wait on policy and economic clarity.
Read more: Air Liquide grapples with FID slowdowns
At times of great uncertainty, the priority is to cloak projects in as many de-risking layers as possible.
Air Liquide is partnering with ExxonMobil’s Baytown project in Texas, investing up to $850 million to build, own and operate four large modular air separation units as well as related infrastructure. It will produce a daily volume of 9,000 tonnes of oxygen which will be used by ExxonMobil’s Autothermal Reformers (ATR) to produce low-carbon hydrogen. Texas has the triple attributes of established energy infrastructure, tax credits and streamlined permitting procedures.
Air Products, embarking on a strategic reset following the recent replacement of its CEO, said it is in active discussions with equity partners for its Louisiana Clean Energy Complex, a key project still going ahead along with NEOM, to reduce capital outlay.
The fact is large scale hubs require massive capital investment across the value chain. The original Hubs proposal was designed to reduce costs and encourage private sector investment. But with federal funding now looking precarious, companies must take a more cautious and pragmatic approach.
White outwardly Air Products’ decision to scale back on projects relating to sustainable avaition fuels (SAF) and green liquid hydrogen is another blow for clean energy development, such strategic shifts may lead to more controlled development.
Air Products said the decision to cancel the Massena green liquid hydrogen project is based on ‘recent regulatory developments rendering existing hydroelectric power supply ineligible for the Clean Hydrogen Production Tax Credit (45V) as well as slower than expected development of a hydrogen mobility market in the region’.
Certainly it’s been a turbulent first quarter for the hydrogen trucking sector. Nikola has been forced into Chapter 11 bankruptcy, UK-based HVS announced it will focus on licensing its hydrogen propulsion systems rather than making trucks, and Hyzon’s Q3 2024 results revealed the firm had burned through nearly $25m in cash reserves, leaving it with just $6.5m.
Ongoing cost challenges remain a major hurdle, with green hydrogen costing $4-6 per kilogram, compared with $1.50-2 for blue hydrogen, hence the shift in focus towards blue and carbon capture in the near term.