Air Liquide to build $150 million liquid hydrogen plant, Evonik to invest in technology in Northeast, DowDuPont handles tariffs with global footprint

Our pick of the latest petrochemical news you need to know

Air Liquide said it will build the first world scale liquid hydrogen production unit dedicated to the hydrogen energy markets. Image: Air Liquide

Air Liquide to build $150 million liquid hydrogen plant

Air Liquide plans to invest $150 million into a hydrogen plant in the U.S. that could fuel 35,000 fuel cell electric vehicles (FCEVs).

Air Liquide announced it would build the first world scale liquid hydrogen production unit dedicated to the hydrogen energy markets.

In addition, the company has signed a long-term agreement with FirstElement Fuel Inc (FEF), a leader in retail hydrogen infrastructure in the U.S., to supply hydrogen to FEF’s retail liquid hydrogen fueling stations in California.

These new commitments will serve the growing needs of the hydrogen mobility market in California and help enable and complement the deployment of hydrogen fuel cell electric vehicles and support the hydrogen merchant market across the state.

“This signals a transitional moment for the hydrogen automobile market," said Joel Ewanick, Founder & CEO of California-based retail hydrogen station company, FirstElement Fuel Inc. "Air Liquide is bringing significant private investment to build a key piece for growing California's hydrogen network. It's yet another indication of the momentum for hydrogen as a replacement for gasoline."

Air Liquide expects to invest more than $150 million to build a liquid hydrogen plant in the western U.S. with construction to begin in early 2019.

The plant will have a capacity of nearly 30 tons of hydrogen per day — an amount that can fuel 35,000 Fuel Cell Electric Vehicles (FCEVs).

Through this investment, Air Liquide will enable the large-scale deployment of hydrogen mobility on the west coast, providing a reliable supply solution to fuel the 40,000 FCEVs expected to be deployed in the state of California by 2022.

The plant will also support other fuel cell vehicle and transportation markets in the region, such as material handling and forklifts and heavy-duty trucks.

The new plant is the first large scale investment into the supply chain infrastructure needed to support hydrogen energy solutions for the energy transition, starting with transport and mobility.

The pace of FCEV deployment has now reached a level requiring a growing scale of investment and is paving the way for the growth of zero emission mobility in other geographies, Air Liquide said.

In addition to the long-term supply agreement, Air Liquide and FEF have entered into an agreement outlining Air Liquide’s intent to make an equity investment in FEF, following previous assistance to the company by Toyota and Honda.

With these agreements, Air Liquide also builds upon its existing collaborations with Toyota and Honda to further enable a robust hydrogen fueling infrastructure and, along with others, bolster the deployment of fuel cell electric vehicles and the retail fueling infrastructure in California.

"This new investment in hydrogen production…accelerates the deployment of new hydrogen fuel cell electric vehicles — cars, trucks, buses — planned by automotive manufacturers like Toyota, Honda and other leading OEMs,” said Michael Graff, Executive Vice President & Executive Committee Member of L’Air Liquide S.A. and Chairman & CEO of American Air Liquide Holdings, Inc., said in a statement. “We are convinced that hydrogen is an essential sustainable energy vector of the future and a cornerstone of the energy transition.”

Evonik to invest in technology in northeast

Evonik will invest at least $50 million to expand its technology and business capabilities in Lehigh County, Pennsylvania. 

Evonik will purchase its leased manufacturing facility and construct a new business and technology center. The center will include more than 50 specialized laboratories for new product development and testing. The project will also retain the company’s existing 277 jobs at the project site and across Pennsylvania.

Evonik received a funding incentive proposal from the Pennsylvania Department of Community and Economic Development for $150,000 in Job Creation Tax Credits and a $2.5 million grant from the Redevelopment Assistance Capital Program.

DowDuPont handles tariffs with global footprint

China's tariffs on U.S. petrochemicals have caused minimal disruption for DowDupont because the global company is able to supply China and Asia through its non-U.S. operations, Chief Financial Officer Howard Ungerleider said.

Other global companies have mentioned the same in recent earnings calls.

DowDupont is sourcing products from all around the world through its Canadian, Argentinian, and Europe assets, its joint venture in Kuwait and its position in Saudi Arabia, Ungerleider said during a webcast presentation at the Citi Basic Materials Conference in New York.

Dow supplies Asia to some degree from its Canadian assets in Alberta.

Dow is among several U.S. producers that have built new ethylene crackers and petrochemical plants as a result of abundant and cheap ethane in the U.S. Eight new U.S. crackers and 13 new polyethylene facilities are opening in the U.S. between 2017 and 2019. Additional investments are planned for 2020 and beyond.

Dow started up its new 1.5 million tonne/year cracker in 2017 and two polyethylene plants in Texas and Louisiana with a combined annual capacity of 750,000 tonne in 2017 and early in 2018. The company is adding two furnaces to the new cracker in Freeport, Texas, which will turn it into the largest cracker in the world with capacity of 2 million tonnes/year.

The U. S has imposed $250 billion in tariffs on Chinese products, which includes hundreds of petrochemicals and finished products made with resins. China responded with $110 billion in retaliatory tariffs on U.S. goods, including the two grades of polyethylene that make up more than 90% of the new capital investments.

Ungerleider said Dow expected its tariff-related costs to reach $50 million to $100 million from 2018 into next, which would be less than 1% of the company's $10 billion in earnings without factoring in decisions involving taxes, financing and accounting.

Overall, 40% of Dow's total sales are in North America. About 30% are in Europe, 20% in Asia and 10% in Latin America. The overwhelming majority of sales produced in the U.S. are sold in the U.S., in addition to some in Central America and South America, Ungerleider said.