Linde Says Mostly Blue Hydrogen for 5-7 Years

Linde, a leading industrial gases company with a $200 billion market cap, will clearly play an outsized role in the global transition to lower carbon intensity hydrogen. In that context, the CEO of Linde, Sanjiv Lamba, used last week’s Q4 earnings call to provide some very pointed commentary on the Company’s clean hydrogen strategy in the US (please see a slide from Linde's earnings presentation below).

Of particular note, Lamba expects that Linde’s large-scale clean hydrogen projects will exclusively employ blue hydrogen technology (natural gas with carbon capture technology) for the next 5-7 years. For Linde, these large-scale projects mostly comprise “onsite” plants built adjacent to a customer’s industrial facility (e.g. a refinery or ammonia/fertilizer production plant). Customers for these onsite plants need a reliable, relatively constant supply of hydrogen at scale and he pointed to the recent commissioning of a blue hydrogen plant for Celanese as evidence that the carbon capture technology is ready to go.

Lamba believes that it will take until the later part of this decade for the electrolyzer technology used to produce green hydrogen (he specifically referenced PEM) to be sufficiently reliable and cost effective for these large-scale projects. As highlighted on the slide, he also believes that onsite customers benefit from the better-established tax-credit regime for blue hydrogen (45Q) relative to the still evolving three pillar regime (45V) for green hydrogen credits.

That said, Lamba said Linde will continue to develop small to medium sized green hydrogen plants (20-40MW) to serve the merchant market, which primarily comprises deliveries of hydrogen by tanker trucks to storage containers on the customer’s site. He also commented that Linde is “scaling up its technology around liquid [green] hydrogen” to address this “important market” especially in regard to the heavy-duty transportation industry. In that connection, Linde subsequently announced that it will roll out new liquid hydrogen fueling technology (“sLH2”) that will materially reduce costs and increase performance.

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