(AOF) – Air Liquide and Vattenfall, one of the European leaders in the production and distribution of electricity, have signed a new long-term renewable energy purchase contract (PPA) for an installed capacity of 115 MW. This second PPA of this size in the Benelux significantly strengthens Air Liquide’s supply of renewable electricity in the region. Concluded for a period of 15 years from 2026, this new PPA will bring the total installed capacity of renewable electricity production made available to Air Liquide to approximately 270 MW in the Benelux.
The quantity of electricity supplied by these capacities represents more than 70% of the Group’s current electricity consumption in this region. This electricity will be generated by Vattenfall’s Hollandse Kust Zuid (HKZ) offshore wind farm, built without the use of subsidies off the Dutch coast.
This PPA will contribute to the decarbonization of Air Liquide’s industrial and medical gas production assets in the region, and will enable the Group’s customers to reduce the carbon footprint of their products and contribute to the emergence of a low-carbon economy. -carbon in Europe.
In total, the PPAs signed in the Benelux will allow Air Liquide to reduce CO2 emissions linked to electricity production by up to 8.5 million tonnes over the duration of these contracts, which is comparable to the emissions generated by more of 350,000 Dutch households.
AOF – LEARN MORE
Key points
– Second in the world behind Linde-Praxair in industrial and medical gases, born in 1902;
– Sales of €29.9 billion structured into 3 branches: gas and industrial services for 95%, engineering and construction then GMT – global markets and technologies;
– Balance of revenue by geographic region – the Americas for 38%, Europe for 33%, Asia-Pacific for 22%;
– Economic model based on multi-year contracts (1/3 of revenues generated by twenty-year contracts) and long-term industrial partnerships offering good visibility of future results and an operating margin greater than 20%;
– Open capital, with 33% individual shareholders and 2.5% for employees, Benoît Poitier, chairing the board of directors of 12 members (14 after the AGM of May 2023), François Jackow being general manager;
– Healthy balance sheet, with net debt raised to A2 and reduced to €10.3 billion, or 46% of shareholders’ equity, and free self-financing of 24% of sales and a self-financing capacity of €6.26 billion.
Challenges
– Advance 2025 strategy with 3 priorities:
– financial performance: annual increase of 5-6% in revenues, profitability of +10% of capital employed via investment decisions of €16 billion between 2022-2025, half of which dedicated to the energy transition,
– decarbonization of industry: low-carbon industrial gases, CO2 capture & management,
– technological innovation addressed to 5 professions: hydrogen mobility, electronics, health, commercial industrial and high technologies – space, cryogenics, quantum, etc.;
– Innovation strategy financed to the tune of +€300 million, aiming for operational excellence, openness to technologies in core businesses or breakthroughs, through:
– global network of 6 innovation campuses, with + 400 academic partnerships,
– dedicated laboratories: Digital factory for data expertise, Alizent for IoT, m-Lab for molecules, i-Lab for deciphering trends, including 60% for the energy transition, etc.
– ALIAD venture capital fund, in alliance with the Chinese CSE fund and Accelair fund;
– Environmental strategy validated by SBTi and aiming for carbon neutrality in 2050 with 2 intermediate objectives, 2025 (after the stability of emissions since 2021, start of the absolute reduction) and 2035 (reduction of 33% compared to 2015), through :
– CO2 capture, hydrogen production by electrolysis, decarbonization solutions,
– €8 billion invested by 2035 in the hydrogen value chain,
– partnership with Rothschild & CO and Solar Impulse in a fund with €200 million for SMEs offering environmental solutions and participation in the global decarbonized hydrogen financing fund (€1.2 billion invested in the short term, with Baker Hughes, Charg Industries, Plug Power, TotalEnergies and Vinci, for a leverage of €15 billion),
– ramp-up of renewable energy supplies;
– Advances in the “markets of the future”: health, energy transition and semiconductors;
– Activity financially supported by European and American public funds (transition act);
– Visibility of the activity: industrial and financial investment decisions at a record level of €4 billion and portfolio of investment opportunities over 12 months of €3.3 billion including +40% in the energy transition.
Challenges
– Waiting for regulatory authorizations for total disengagement from Russia;
– Energy inflation: offset by savings (€378 million) and the transfer of costs to customers despite the difficulties in Industrial Merchant;
– Resumption of sales in Large Industries in Europe;
– After a 7.3% increase in net profit, 2023 outlook for growth in operating margin and current net profit;
– 2022 dividend of €2.95, up 12.2%.
Learn more about the chemicals sector
Nothing is going well for German chemistry
German chemicals, very dependent on Russian gas, are in difficulty. Following sluggish sales in the automotive sector and falling demand in construction, production is down 8.5% in 2022, with overall turnover down 1.6% to 63.1 Billions of Euro’s. Specialty chemistry is doing better. On the other hand, the rate of utilization of production capacities in basic chemicals has slowed significantly to reach less than 80%. The third German industrial sector is tempted by relocation to the United States, where energy costs are much lower. With the Inflation Reduction Act, the United States has established an environment appropriate to current challenges.