Energy Transition Now Podcast – Episode 35 “Enabling the Global Hydrogen Economy”

Joyce Grigorey [00:00:00] Good morning, good afternoon to all our listeners. Thank you for joining us today. You’re listening to the Energy Transition Now series, and I’m your host, Joyce Grigorey, Head of Hydrogen for the Westwood Global Energy Group. We hope that you’ve been enjoying listening to the hydrogen podcast series so far. We’ve been talking about funding hydrogen technology, hydrogen’s potential role in the gas grid, as well as some of the challenges that we’re seeing around scaling up electrolyser technology. Today is the last of the series and we’re going to be talking about enabling the global hydrogen economy. But before I start, I’d like to kick off by introducing my lovely co-host, Jun Sasamura. He’s a senior analyst on Westwood’s hydrogen team. Please say hello!

Jun Sasamura [00:00:44] Hello, everyone.

Joyce Grigorey [00:00:46] So today, Jun and I will be joined by David Burns, who’s V.P. of Clean Energy at Linde. David has been with the company since 2005 and has been heavily involved in developing its hydrogen business. So today we have the pleasure of drawing on his wealth of experience and knowledge in this space. David, it’s great to have you here today.

David Burns [00:01:08] And thanks so much for the opportunity to join you today. Thanks, Joyce.

Joyce Grigorey [00:01:11] So firstly, I’d like to start off by asking you to give a little bit of background on Linde, because there will be some of our listeners who might be a little bit less familiar with the company and the work that it’s doing in the hydrogen space.

David Burns [00:01:24] Sure. You mentioned I joined Linde in 2005. Actually, I joined Praxair in 2005, and then Linde and Praxair merged in 2019. So that was kind of the evolution of the largest industrial gas company in the world at that point was 2019 with the merger of Linde and Praxair. Praxair, US- based, and Linde was a German-based company. So they came together, formed the world’s largest industrial gas company. Industrial gases, from our perspective, that’s oxygen, nitrogen, argon and other kinds of speciality gases associated with the atmosphere, recovering those gases from the atmosphere and also process gases, which is hydrogen and CO2. Obviously, that’s very topical today with hydrogen and CO2, but that’s kind of a business we’ve been involved in, hydrogen for decades-years plus, developed into a $3 billion business today for us around hydrogen. Also, we have a large CO2 business, CO2 business for recovering CO2, purifying it, and then supplying that to the merchant market. So not sequestration, which obviously the large volumes of CO2 capture and sequestration will be talking about. But I’m very familiar with hydrogen, but also with CO2. So those two things are coming together to really put us in a good position here as we try to enable the energy transition. There was a two key areas that we’re kind of leveraging our expertise, capabilities and technologies. So that’s Linde today. You know, the world’s largest industry gas company that came through the merger of Praxair and Linde.

Joyce Grigorey [00:03:11] I see. Thanks for the clarification. So you’ve been working specifically in hydrogen since 2005? Is that correct?

David Burns [00:03:18] Yes, correct. So because back in those days, it was all around conventional grey hydrogen. That was you know, we weren’t really thinking clean hydrogen at that point. Obviously, a lot of grey hydrogen or conventional hydrogen was used in the adoption of clean fuels, low sulphur diesel in particular, as well as a feedstock and chemicals. But a lot of the growth, from the early 2000 onwards was really meeting these low sulphur fuel standards and producing hydrogen to meet that. And that’s how we built our, a very large network and certainly on the US Gulf Coast to supply the refineries there. And then more recently, with this focus on the transition, energy transition and the role that hydrogen can play in that, we’re really looking to leverage that capability and infrastructure to really lean into now producing clean hydrogen in all these forms. And we heard a lot about the colours, the greens and the blues, etc.. But we tend to focus on the what is the carbon intensity, focus on that, and talk about clean hydrogen perspective. But we can use that same infrastructure, pipelines, trucks, etc., and production facilities and kind of leverage that to then start providing clean hydrogen to those end users who are needing it.

Joyce Grigorey [00:04:44] So how has that transition actually happened then? Like, how are you focusing much more leveraging your infrastructure to go from grey to blue or green? What’s been happening over the last year or so?

David Burns [00:05:00] Yeah. So we’ve been looking at, we have a large production base of grey hydrogen and we’re looking at some opportunities to convert that to blue by capturing the CO2 and sequestering it. And at the same time, we’re also building new facilities to produce blue hydrogen where it makes sense and connecting that into our network. From our perspective, we’re looking at clean hydrogen and we see that with blue hydrogen, and that can be done at scale today. That’s the technologies and the capabilities of producing blue hydrogen and scale at a cost which is not too different than that of grey. I mean, there’s a small premium, but we can make blue hydrogen and its derivatives at a fairly competitive cost, that’s great. And certainly if you look in in the US, you can produce blue hydrogen cheaper in the US today than you can produce green hydrogen in Europe, just given the cost differential in underlying natural gas. So we’ve been looking at blue hydrogen. It’s getting really a stepping stone into clean energy and maybe green hydrogen in the future. The challenge with green hydrogen produced with electrolysis is, to all intents and purposes, green hydrogen electrolysis, it’s kind of a nascent industry that technology is not there at scale today. And we’re working to develop projects and then gradually build-up scale in electrolysis there. But a part of the cost there, of course, is renewable energy from renewable power. So we can all best drive the cost of electrolysis down with the underlying cost factor –  renewable energy, still has been creeping up. So, we’re looking at blue hydrogen to that scale today, leverage the infrastructure we’ve developed around grey and, then step into green hydrogen and renewable power base production of hydrogen in the future. So it’s a two-pronged approach, but we can do blue hydrogen at scale today, that’s the difference. And to put it in context, if you look at one of the world scale hydrogen plants, we’re developing blue clean hydrogen plants, blue hydrogen plants, the equivalent scale in electrolysis, maybe 1 or 2GW. And, there’s really not the manufacturing capacity on the electrolysis side to do that today. And, we’ve seen, I think the largest part built today is probably in China was Sinopec’s, about 250MW. Ourselves, we’ve been building projects in Leuna and we have a 24 megawatt project we’re commissioning. We have a 35 megawatt project we’re developing in Niagara Falls in the US based on hydropower. So that’s kind of the scale we’re at today, which is obviously an order of magnitude less than you can do with blue, 1 or 2 orders of magnitude less. So we’re looking at blue hydrogen produced with CCS as being really the way to drive uptake of clean hydrogen and that’ll create the opportunity for green to come in as the cost composition of technology develops.

Jun Sasamura [00:08:17] Interesting. So one of the things I wanted to kind of start to bring out here was sort of to focus on specifically the main projects that they’re focussed on now. And you were talking about how perhaps now, given the ability to leverage obviously, the current capability, current infrastructure, it seems to be tends to be more blue focus. So I’m leaning towards, the larger projects that we are aware of at the moment say, in the Gulf of Mexico with OCI, that big blue ammonia project, partnerships with Saudi Aramco, its developed ammonia-cracking technology. So would you be able to perhaps run through in some more detail around some of the key projects, especially in the blue hydrogen space?

David Burns [00:08:58] Yeah. And obviously the interconnectivity is a great example of kind of the scale of the projects to say, well, we can develop today and that, OCI is looking to develop about a 3100 ton-a-day ammonia clean ammonia project on the US Gulf Coast in Beaumont, and we’re building new ATR capacity, auto-thermal reforming capacity, to use the blue hydrogen that they need to produce that ammonia. We’re also supplying the nitrogen as well as needed. So we’ll be providing that. They’ll be then building the loop and producing ammonia. So we’re building all the infrastructure that is required to produce and distribute hydrogen and nitrogen to them. So that’s, obviously a world-scale ammonia train, blue clean, ammonia train that Linde is developing. So I think that’s obviously an example of the project also been enabled in many ways by the IRA in terms of its 45Q credits. In this case, we’re working, I think we announced we’re working with Exxon. They’ll be doing the TNS on the CO2. So we will produce the hydrogen, capture the CO2, and then Exxon will be our partner there to take that and sequester it. And another project, large project, working on those up in Canada, I think Dow announced that they’d selected us to work with them on helping decarbonise their Fort Saskatchewan facility. And that’d be a great example of fuel switching where, off-gas on the ethylene-cracker and natural gas, you convert that to hydrogen and capture the CO2 in the process and then use the hydrogen in the furnace in the high temperature furnace and the steam cracker. So that’s a great way to decarbonise the facility there. So we’re working with them on that. In the Middle East, in Saudi, we have a partnership, a global partnership with SLB, formerly Schlumberger, to help us provide a kind of end-to-end CCS capability. So we’re working in that case with SLB and Aramco in a JV to develop a CSS, carbon capture storage, for the Kingdom there, in which we will be capturing in the first phase 9 million tonnes a year of CO2 from a number of industrial sources, including some hydrogen and ammonia. We’re looking out by the end of the phase three, if it goes all the way to the end of the third phase, it’s something like 54 million tons of CO2 will be captured. So in that case, it’s not all CO2 associated with hydrogen by any means, its some other industrial sources. And again, it’ll be, make a significant contribution to helping decarbonise the economy there in Saudi. So again, that’s a nice project where ourselves, and SLB and Aramco coming together to develop a carbon capture project. That’s one thing we’re finding in clean energy in general, by the way, is this, where in the past we tend to do projects by ourselves, now we’re looking at partnerships and bringing in different partners with different capabilities, different instruments. And that’s also, one of the things we’re noticing as we go forward here with clean energy is this kind of coming together of different partners with their different skills to really make projects happen. So those are kind of some of the large projects we’re looking at, carbon capture and blue hydrogen related to a lot of other projects in the pipeline. I think we have something like a little over 200 projects that we have in our pipeline. We expect that to translate into about $10 billion of capital expended over the next ten years or so, sorry, over the next 2 to 3 years. And when you look at the probability weighting projects, it comes to about $10 billion. So that’s kind of the pipeline we have right now. But we’re also expecting over the next ten years or so that, we’ll probably be looking at projects in the $50 billion range that we’ll be participating in. So that’s kind of the scale of the opportunity for us, as we see here, in clean energy. So that’s obviously a lot of large projects right now with some smaller green projects we’re developing. You mentioned the 35 megawatt project up in Niagara Falls, 24MW in Leuna, in Germany there. So that’s kind of the scale we’re at there. At the same time, we’re working on some other projects to try and help drive demand as well. We’re working with Daimler in Europe to look at liquid fuelling of trucks, heavy trucks. Last year we announced 14 trains in Bremewerden in northern Germany, where we’ll be supplying nitrogen, hydrogen powered trains. And there’s even a ferry in Norway which will be using hydrogen. So kind of helping drive the demand side as well, which I think, to be honest is one of the gaps right now is not so much the production side, it’s the demand side which is needing some little push and need some help as well.

Jun Sasamura [00:14:03] So you mentioned those, I guess, in the context of green hydrogen, so more mobility focussed, and I know with the recent announcements of the 7 hubs in the U.S. that is involved in the California hydrogen hub, which also seems to be more mobility focussed, is that… are there different strategies for say, you know, tackling the green hydrogen market. For Linde, it seems to be, quite different to comparing blue versus green there.

David Burns [00:14:36] Yeah, I mean, yeah, certainly. I think the green hydrogen particularly in Europe there’s a focus on using green hydrogen for want of a better word, in the mobility sector. And certainly in the, there were two, etc.. The need to try and find sources of green hydrogen to support the build out of particularly mobility, particularly the heavy truck area, right. Whereas in the U.S. seems to be more of a focus right now on blue at large scale. But then, as you said, with the hubs, there are some in those different hubs which have been announced for some green hydrogen production as well. And so we’re looking at being able to support that market as well. As you mentioned, we’re in the ARCHES Hub. We have a production facility right now in Ontario, California, where we produce some green hydrogen. We’re looking to produce more there as well. And that’ll help obviously, with the buildout in the California market. And when we look at Europe and Germany in particular, we’ve been, I think we have over 200 fueling stations have been built. We as Linde through our affiliate hydrogen fuel tech, Linde Hydrogen Fuel Tech, you know, we design and build fueling stations. We’ve built something like 200 fueling stations around the world right now, which will help fuel vehicles. In Germany itself we have over 100 fueling stations there been installed as part of the venture with H2 Mobility is a venture of a number of companies, including ourselves, to build out fueling stations. The idea was that I think we didn’t want a chicken and egg problem. And you know what comes first, the fueling stations or the vehicles. So there’s a number of companies ourselves and Daimler and Shell, etc., came together and decided to build out fueling stations to pull through the vehicles, so we built over 100 stations, now. I must admit that many vehicles, but I think we were looking at that time, it was more focused on cars, but I think the future is heavy trucks and heavy vehicles. So we’re hoping to see that grow.

Jun Sasamura [00:16:52] I imagine, the new initiative at Tent Network to develop that refueling infrastructure network in Europe is helping also enable that even further.

David Burns [00:17:03] Yeah. And I think the key thing right now is to get trucks on the road, right. And that is the key thing in Europe is to that’s ultimately the demand point is the trucks. And so I think we’re poised to start seeing trucks, arrive in greater numbers. Obviously, I think there’s 50 Hyundai trucks in Switzerland right now. And we’re part of a venture called Hydrospider, which is supplying hydrogen to those vehicles. But that’s kind of the largest scale at the moment, I think has been other announcements around different initiatives to put trucks on the road. That’s the key thing right now in the mobility sector.

Jun Sasamura [00:17:37] We’ve touched on a number of markets and how perhaps the strategies may be different across these geographies. What I’m curious about is kind of your understanding of how perhaps there are different trends across these markets. So say, starting to dive deeper into comparing the U.S. to Europe, to even the Middle East, as Linde does have positions in all of these markets. So, maybe starting with, we mentioned the IRA earlier, but if you could expand on the impact of that and especially with so much money injected with recent hydrogen hubs, as I mentioned earlier, and how you see the market in the U.S. trending.

David Burns [00:18:19] Yeah, I think the IRA and the hubs as part of the BIL, a lot of stimulus there, a lot of focus on production. You see opportunities in fuel switching and we also see mobility kind of building. But right now, a lot of focus on developing export projects, particularly around ammonia – produce clean ammonia for export. So that’s a lot of the focus in US right now and there’s a lot of momentum behind that. You know, as you look in Europe. I think what we’re waiting for there is, again, mobility, but also particularly a focus on steel and cleaning of the steel industry, in terms of their CO2 emissions intensity per tonne of steel produced. The folks there seem to be a lot of DRI, Direct Reduction of Iron, as is kind of the path forward there. I mean, this is a global initiative, not just Europe, but a lot of folks in Europe are about DRI. So really we’re waiting for the industry to make, will have to make large investments to be able to convert to that kind of steel making process, which will then pull hydrogen through. So, a little bit of waiting for the investment to be made, to really pull through a lot of hydrogen. Obviously, in Europe, also we see fuel switching. We also see some power projects being developed. Part of the challenge in Europe is difficult, certainly in mainland Europe, with sequestration. And that is challenging if you’re looking at producing blue hydrogen derivatives, if you’re in the North Sea basin, the UK, Netherlands, Norway, etc., you can look at offshore sequestration. But it does add an extra layer of cost when you have to deliver CO2 to the North Sea ports to then either deliver it by pipe or by ship to the fields for sequestration. So that’s one of the challenges in Europe because there’s this concern around blue hydrogen and derivatives, producing it locally as well, as the gas is expensive, it’s expensive to sequester it and much, much more focus on the green energy, green hydrogen. The challenge there is getting the power, renewable power available that you need and also at the cost you need. But so that’s on the production side, but we’re also still for the demand side to start picking up as well.

Joyce Grigorey [00:20:51] Just if I can ask you on that point, because we had a podcast – the first of the series – was actually with Michelle Robson from AP Ventures, and they are a venture capital firm that invest in early stage technologies or also established technologies and looking at improving efficiencies of those. So ammonia cracking or, as a new technology or electrolysis trying to boost the efficiencies. And one of the comments that she made was around, if she looked across the entire value chain, which they do invest in, that actually it’s the midstream that she feels this is the area that requires probably the most concentration, I guess, if you want to say that in terms of investment now. And her quote was something like, if we invest in the midstream, then that unlocks other areas of the value chain. And I was wondering if you agree with that or not, because it seems as though Linde are, again, working across the entire value chain. You’re not only building the infrastructure, but you’re working on the demand side and you’re talking about some of the challenges in terms of sequestration, which is, I guess, production-side, power, renewables, that’s also on the production side. So would you agree with her comment to say that, actually, the most important investment opportunity that needs to be made now should be in the midstream? Or do you think there’s something else?

David Burns [00:22:38] Yeah. I mean, my perspective is demand side which needs the most stimulus at the moment to get the demand side growing. You know, get some opportunities developed, capacity developed, which will take hydrogen – clean hydrogen – at the premiums required to make it work. On the midstream and presume she’s thinking about the pipelines and distribution, is that right? Yeah. You know our perspective is, we have pipelines in the US, I think about 2000km around the world of hydrogen pipeline. So we can build that infrastructure if needed to get it to our customers. So that’s not a challenge. And so the challenge will be there are some new customers developing and not currently connected to agreed to a network. So you have to look at building out new new pipelines, which can be challenging, given the permitting requirements, etc.. I think converting natural gas, the natural gas grid to hydrogen, such as they’re looking at in Europe with a hydrogen backbone, I think will help solve a lot of those issues. There are some opportunities, when you’re looking at fueling stations needing 4 or 5 tons a day of hydrogen, you probably won’t build pipelines to connect. So what you’re looking at there, I think is liquid hydrogen and using liquid hydrogen to solve that problem. And that technology is available today. And I think with Linde, we have over half the world’s capacity of liquid hydrogen today. We use that to distribute hydrogen to customers who are needing more than two trailer amounts, which is about half a tonne to a tonne a day on a truck. If you’re looking at liquid, you can put 45 tons on a truck and you can use that to kind of really optimise the supply chain and start helping in on the mobility side, kind of those kind of applications on the larger scale like mills, etc., the quantities they’re requiring. It makes a lot of sense to build the pipelines and build plant lines needed to get that kind of quantity to build new pipelines or repurpose existing pipelines. So I think as the demand grows that the midstream will fill in to meet that. And so I don’t think it’s midstream holding it up, it’s the demand holding it up and then the midstream and the infrastructure will follow. The great thing is, as a lot of you know, given given the business we have today around green hydrogen, we have a lot of infrastructure and capability we can leverage today to provide clean hydrogen as well. So I, not to completely disagree, but I think the issue is more on the demand side and making sure that gets moving. And then the infrastructure in the midstream will kind of follow.

Joyce Grigorey [00:25:35] Okay. And then on the demand side, you mentioned that the U.S. is focusing on exporting ammonia. Is that exporting therefore, they’re focusing on the European market, I assume?

David Burns [00:25:51] Yeah, and I think obviously, the European market coming into Northern Europe, Germany, Netherlands, etc., Rotterdam, etc., that’s one focus for U.S. in the Gulf Coast projects that come. Obviously in Asia, Japan, Korea, they’re also looking at particularly ammonia as a solution to decarbonising their power sector, co-firing with ammonia or using ammonia directly. And so we’ll see some ammonia going to going across the Pacific into Asia. I think we’ll see a lot of clean energy coming out of Australia as well, coming into Korea and Australia and Korea and Japan. In that case, thinking further out, it may not be ammonia, it may be liquid hydrogen. And I think, we’re looking at developing that capability of being able to export, develop export quantities and capabilities, the hundreds and, 4 or 500 tons a day kind of capacity and not the 30 to 50 tons a day that we see today for liquid hydrogen. So I think liquid hydrogen may be a decade away. But right now, ammonia is the vector for moving clean energy.

Joyce Grigorey [00:27:02] Why do you think the U.S. is focusing on the export markets first rather than decarbonising their own domestic market?

David Burns [00:27:14] I think two things. You know, we were looking at projects in the US which were also like fuel switching projects in particular like mobility, which will decarbonise the US economy, help decarbonise. We’re looking at projects, steel projects, which will also help decarbonise the steel sector. But I think when you look at the US and you know we’re looking at export and you need large quantities, large scale to make export markets work, you have the combination of abundant low cost natural gas, sequestration opportunities close by, and the capability and market and structure market that’s able to build large scale billion dollar plus projects. And that all comes together to make. And with the infrastructure in place for export and the ports, the storage systems, etc., all that is in place to make it a great export, you see on the Gulf Coast is going to be a great export opportunity going to develop there. So it’s not just focused on ammonia, it’s a combination of all of these factors that make producing content for export out of the US Gulf Coast to be very attractive. We just saw the cost of gas in Europe versus the gas in the Gulf Coast. And you know, you can look at making blue hydrogen today, blue ammonia on the Gulf Coast at the low cost than you can produce grey ammonia in Europe. So it also, you also remove some of that, one of the risk factors is who will pay a premium for blue ammonia, but if you can produce it at a lower cost than it is already. So the ability to do that in place of grey production in Europe. So I don’t so much focus on exports, it’s just that it makes for a very good export, great location to make product for export. But certainly the US is very much focused on decarbonising its own economy. You know, the IRA and the BIL is very much helping towards that as well.

Joyce Grigorey [00:29:19] And so what do you think, if demand is that part of the value chain that needs a bit more support, what do you think would help drive that? Is it the you mentioned the premium, is it subsidies? Is it policy? What do you think is really needed on the demand side?

David Burns [00:29:42] Yeah, I mean, I think a lot of it is policy driven. You know, certainly in Europe, when you look at the combination of the ETS and the CBAM, that’s going to create the kind of right environment for seeing demand for decarbonisation and clean hydrogen in Europe. You know, the challenge in the US, of course, is we have very good policies in place for subsidising and producing and helping produce low cost clean energy. On the demand side, carbon taxes, etc. is much more a carrot rather than the stick. So I think policy is also drawing it to a more kind of a production based push in Europe. There’s also a combination, getting into a combination of helping on the production side, but also helping on the demand side with a bit of a pull. The challenge, of course, in Europe as well is, when you look at the IRA is very simple structure. You get into Europe where you get a very complex web of different policies and different programs that you have to navigate. So a lot of money is being made available to support projects in the US, which can be tapped very quickly, very simply. In Europe a lot of money potentially available, it’s just more difficult to tap into that because of the process and the bureaucracy around, applying for funding. Tends to be more kind of CapEx based funding in in Europe, whereas in the US it’s more kind of OpEx based through through tax credits. You know, I think we’ll, I think we’re waiting for the final IRS rulings on around the production tax credit side. But I think it’s very well understood. It’s a bit more challenging in Europe.

Jun Sasamura [00:31:35] You mentioned those challenges in Europe, around varying policies and across the EU. Do you think in that sense then Europe is potentially falling behind, say compared to the US? Or do you think they’re still on track? It just needs to get to that stage, which we’re waiting for, Is that bit more clarification?

David Burns [00:32:01] Yeah. I mean, I think in Europe there is great ambition, such as 20 million tonnes a year of hydrogen and clean energy derivatives by 2030. You know, in some ways, simply a little bit ahead of the US where I think that the road map with 10 million tonnes by 2030, building up to I think it’s 50 million, 40 million tonnes by 2050. So they both have a road map really, increase the amount of hydrogen, clean hydrogen that’s going to be used in the economy. I think when you look at large scale projects more than there was the US especially, in the last 12 months since the IRA was passed than in Europe. So there’s a bit of a slow the slower process. And I think the you know, it was definitely leading up to the point the IRA was passed. But now we’re seeing the US kind of pulling ahead a little bit. And you know, certainly with the hubs being announced as well, that’s obviously further increasing that kind of a move, the US ahead even more, I think, than Europe. But I think Europe has the ambition and the policies and desire to kind of decarbonise. It’s just been challenging in many ways to kind of access the funding that would help support that.

Jun Sasamura [00:33:25] So do you think that is really the key in order to help drive that forward in Europe?

David Burns [00:33:32] Yeah. And I think as we see the ETS and CBAM as that comes through, I think that’s going to help drive a lot of kind of uptake and new applications requiring clean hydrogen too, as we move forward here. So I think those have been set in motion now and we’ll start to see the impact over the next few years. It’s just with the simplicity of the production of the tax credit, and the IRA it’s helped projects get moving more quickly, should we say, in the US. So I think the momentum is there in Europe, which has been a bit slower to see development.

Joyce Grigorey [00:34:12] We talked a little bit about the funding being a key component. But we’re also, going back to your previous point around partnerships, and obviously, this is something that you’re seeing here; partnerships has been, more of an emerging trend that we’re seeing in those projects? Right. Because you can’t fill all the the gaps yourself. And by developing that partnership, you’re obviously diversifying the risks a little bit. And that’s what’s really helping some of these larger scale projects kind of get off the ground. Would you agree with that, that partnerships is also pretty key?

David Burns [00:34:53] Definitely. I think we view partnerships as definitely being key. You know, while we address the full value chain to certain parts of the value chain that are new. Certainly on the demand side around fueling of trucks and things like that, that’s a developing area, we haven’t really seen that in the past. DRI in the steel industry, we’ve seen the steel industry supply a lot of oxygen argon to steel makers. So we have very strong relationships with other steel companies. We understand the challenges they’re faced with as they look to decarbonise. And so we can work with them in partnership to help. But again, it’s bringing into collective, kind of, collective knowledge from different partners coming together to really help kind of drive the transition, help the decarbonisation. And I think it makes a lot faster if you choose the right partner, you got the right technology and you can help fill those kind of gaps that are developing. So now I think partnerships are going to be key going forward. And they are today. I mean, when you look at some of the projects we’re working on, partnerships have been key to that, whether it’s working with Daimler or on liquid fueling of trucks or whether it’s working with SLB and Aramco on the CCS project in Saudi. You know, it’s very key to our whole kind of focus in clean energy going forward.

Joyce Grigorey [00:36:20] Okay. Well thank you very much, David. I think what we’ve, if we kind of sum up that, there’s still a lot of challenges on the supply side. Right. Looking at power requirements, looking at sequestration, Linde is focusing all across the value chain from that production side, providing the infrastructure, helping with demand. And really, it’s the demand side that you’re saying needs that extra stimulus now.

David Burns [00:36:51] Exactly. Yeah. I mean, when we look at it, we look across the whole value chain. We don’t see production of clean hydrogen as being the issue of clean hydrogen and it’s derivatives, we can do that at scale today. And when we’re looking at it, we call it “blue”, when we look at blue hydrogen, blue ammonia, we can do that at scale today. The technologies, the capability are in place. When we look at producing hydrogen through electrolysis, renewable energy, we need the manufacturing capacity to build up for electrolysers. We need the cost to come down, which it will as scale builds, but if we look at 75% of the cost being based on renewable power, we need to start seeing the cost for renewable power to come down. And also when you look at a project so you don’t end up putting in either more power capacity or more electrolyser capacity than you really need just to be able to catch and capture the kind of peaks and troughs of renewable power production is some more kind of help from a policy side around how you can get high availability rates, help drive the cost down from a CapEx point of view and help drive the overall cost of the hydrogen produced down, as well. So I think there is a case to be made a bit more flexibility around how renewable power is considered and how it can be used. So whether it’s temporal correlation, additionality, etc., those are some of the things which also can be a bit challenging when you look at putting a green or clean, green, clean hydrogen project together. And so that’s something we haven’t really addressed before, but that’s maybe where there could be some help as well.

Joyce Grigorey [00:38:53] Okay. All right. Well, I think there’s still a lot of work to be done in this hydrogen industry, particularly as we see some of the challenges in offshore wind and some of the auctions and the rising cost of inflation and the cost of those projects. So, yeah, we’re hoping that some of the challenges that we’re seeing there aren’t going to be too much of a hindrance for the green to take off of the green hydrogen industry.

David Burns [00:39:24] Yeah.

Joyce Grigorey [00:39:26] Well, thank you very much, David. I’ve really enjoyed the conversation. We’re nearly out of time here, but I think I speak on behalf of all of our listeners that we really value your insights.

David Burns [00:39:39] I want to thank you and thank the opportunity to talk to you today and I think hopefully get the message across. You know, well Linde is focused on decarbonising our own operations, but also helping customers decarbonise as well. And we’re bringing to bear our capabilities around producing hydrogen, decades of production of hydrogen safely and reliably, being able to bring that to bear when it comes to working with new customers, new partners who have not been in the hydrogen space, not needed hydrogen before, but will need it going forward. So we think that in that way we can help with the transition, the energy transition here and help us with a lot of growth opportunities, but also help our customers and society as a whole reach their decarbonisation goals.

Joyce Grigorey [00:40:27] Excellent. All right. Well, thank you very much for your time. And I hope all of our listeners have enjoyed hearing some of your insights. This closes the end of our hydrogen podcast series. We hope that you’ve enjoyed it. And please make sure you subscribe and we will see you next time. Thank you very much.

 

 

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