Air Products and Chemicals (APD) Jefferies Global Industrial Conference 2024 summary

Hydrogen market and project development

• Significant acceleration in low-carbon hydrogen projects globally, driven by policy support in the US, Europe, and Asia.

• Neom project reached FID in May 2023, supported by 23 global finance institutions, producing 1.2 million tons of green ammonia annually.

• Customer contracts, such as with TotalEnergies, are catalyzing further demand and reverse inquiries.

• Blue ammonia and hydrogen are gaining traction in Asia, especially for coal power blending and shipping.

• Regulatory frameworks and funding mechanisms are critical for project momentum.

Strategic priorities and infrastructure investment

• Focus on both blue and green hydrogen, with project selection based on locational advantages and infrastructure access.

• $15 billion earmarked for energy transition projects, with $2 billion allocated to downstream infrastructure, including port terminals in Rotterdam, Hamburg, and Immingham.

• Technology innovation in ammonia dissociation and electrolyzers is a key competitive advantage, with over 45 patents secured.

• Downstream strategy will adapt based on offtake agreements and market needs, especially in transport and industrial sectors.

Contracting, pricing, and financial structure

• TotalEnergies contract covers 70,000 tons over 15 years, setting a benchmark for green hydrogen pricing and stability.

• Long-term contracts and reverse inquiries are increasing post-Total deal, supporting business resiliency.

• Project returns are influenced by oil and electricity prices, but public policy and renewable power costs are primary drivers.

• Neom project is materially cheaper than localized European electrolyzer solutions.