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Air Products aims to be vertically integrated hydrogen company in energy transition

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Air Products has its sights set on becoming a vertically integrated hydrogen company, as the world prepares to pivot to the low-carbon energy carrier across a range of applications, the company's head, Seifi Ghasemi, said Oct. 7 at the Energy Intelligence online forum.

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Ghasemi, who is chairman, president and CEO of Air Products, said working alone or in collaboration with a small number of other companies was a better way of delivering the total hydrogen value chain as part of the energy transition.

Air Products would take the lead in developing the complete hydrogen value chain, he said.

"We will produce it, we will transport it ... distribute it, whether it is through a pipeline or as a liquid at the distribution locations," Ghasemi said.

The company would also build hydrogen fueling stations, and was leading the way in hydrogen as a fuel for heavy transport, operating 2,000 trucks that Ghasemi said would be converted to run on hydrogen.

"We would like to move with speed," Ghasemi said. "And when you have a project which has 20 different partners, it is very difficult to achieve speed. Everybody has a different agenda."

"Everybody wants to announce a hydrogen project because that helps the stock, and that helps getting a headline in the paper," he said.

"We don't want to get headlines; we want to get something done."

"We think that if we have fewer partners, we will be able to get things done faster."

He said projects with a few partners, such as its Neom project collaboration in Saudi Arabia with Acwa Power, were more effective.

The project, powered by 4 GW of renewables, will produce 650 mt/day of hydrogen and 1.2 million mt/year of ammonia when it comes on stream in 2025.

Air Products will be the sole ammonia offtaker, and plans to export the product globally.

Ghasemi said ammonia was the best hydrogen carrier for transport over long distances, and could be either used as a fuel or reconverted to hydrogen as required.

Ghasemi said government policy incentives should be focused on the demand side.

"Policymakers need to focus their attention, not on giving a handout to somebody to go and build a hydrogen plant, but to encourage the end customer to use the product," he said.

Governments should give consumers in the trucking, shipping and rail sectors, as well as potential industrial consumers such as steel and chemical companies the incentive to use green energy, Ghasemi said.

"Then that would make the whole market, because once there is a demand, then companies like us will produce [hydrogen] and make money and then build the next plant and the next one."

Ghasemi said the early market movers were likely to be around heavy transport applications and existing industry, before steel and chemical producers became increasingly involved in the market.

He said Air Products currently sold conventional hydrogen for fueling buses and trucks at around $11-$14/kg. With incentives, low-carbon hydrogen produced from fossil fuels with carbon capture and storage, and even renewable hydrogen -- produced by electrolysis powered by renewables -- could be economically viable, Ghasemi said.

S&P Global Platts assessed monthly hydrogen pump prices at $15.79/kg in California Oct. 1, while prices in Germany were $11.01/kg and in Japan $10.89/kg.