Paris-based Air Liquide, the industrial gases company that is a partner in six of the seven U.S. hydrogen hubs, saw its investment backlog surge to a record €4.4 billion (US$4.76 billion) last year as it eyes more investment decisions.

Speaking during the company’s full-year 2023 earnings call this week, Air Liquide CEO François Jackow said the backlog is balanced between large industrial projects and electronics, mainly in Asia; however, the U.S. energy transition weighting has increased.

“Beyond our high investment decision signings and robust backlog, we are actively pursuing well-developed projects and partnerships, providing a deep pool of growth opportunities for the midterm,” Jackow said Feb. 20.

Global goals to decrease greenhouse gas emissions have increased interest in lower carbon energy sources such as hydrogen, biomethane solutions, waste-to-gas technologies, carbon use as well as CNG, LNG and hydrogen technology and infrastructure—all of which are part of Air Liquide’s targeted industrial and transportation markets.

The company reported a net profit of €3.08 billion ($US3.33 billion) for 2023, up more than 11% compared to 2022. Group revenue reached €27.61 billion, down 7.8% due to lower energy prices and negative currency impacts. The company’s gas and services business, which represents 95% of the group’s revenue, increased 4.2% with all regions—including the U.S.—seeing growth.

Air Liquide, which proposed a dividend of €3.20 (US$3.46) per share, also improved its operating margin by more than 80 basis points while expressing confidence in its ability to further increase the margin in 2024. It is aiming for a +320 basis points increase, which Jackow said is twice the company’s initial ambition.

Asked by an analyst about potential risks as the company ramps up investment, particularly in hydrogen, Pascal Vinet, Air Liquide executive vice president, pointed to the company’s diverse and balanced energy transition portfolio.

“We have hydrogen, hydrogen in a classical way, hydrogen with electrolyzers. But we also have carbon capture projects. We have oxygen—large oxygen projects. We have a CO2 terminal,” Vinet said. “So, we do not expect a dilution coming from H2. We will have … typical oil contracts. We’ll maintain our return on capital employed, and we should, again, maintain our margin, thanks to that balanced portfolio. [We] don’t see energy transition just as hydrogen only. It’s a lot more than that, and it’s a very balanced portfolio we have.”

Air Liquide looks to make industrial and financial investment decisions on €16 billion (US$17.3 billion) worth of projects through 2025.

“And while we prepare for the future, we remain very disciplined in our investment decisions to maximize value creation,” Jackow said.

The company is also positioned to play a major role in efforts to scale up hydrogen in the U.S., serving as a partner in six hydrogen hubs. These include HyVelocity on the Gulf Coast, Pacific Northwest Hydrogen Hub (PNWH2), Appalachia Regional Clean Hydrogen Hub (ARCH2), Midwest Alliance for Clean Hydrogen hub (MACHH2), the Alliance for Renewable Clean Hydrogen Energy Systems in California and the Mid-Atlantic Clean Hydrogen Hub.

Air Liquide investment decisions and backlog
(Source: Air Liquide)

While the company has identified a 12-month portfolio of projects, Jackow said Air Liquide probably has about three times that amount—spread across various regions.

“This being said, we know that those projects—which are becoming more complex, larger, which requires sometimes regulations, sometimes subsidies, sometimes an ecosystem—take some time to develop,” he said, adding there is still strong momentum on feasibility and engineering studies across regions.

“But we want to be, I would say, prudent regarding the assumptions for the signing [of projects] in the next two years because there could be some delays. … This year is also a year with elections in major parts of the world.”

That, he added, could lead to a “wait-and-see type of behavior from customers.”