1 00:00:00,440 --> 00:00:04,080 Speaker 1: Welcome to zero I am Akshatrati this week a hidden 2 00:00:04,200 --> 00:00:20,840 Speaker 1: electricity giant. The demand for electricity is soaring, and you 3 00:00:21,000 --> 00:00:24,440 Speaker 1: likely know why. It's because of air conditioning, electric cars, 4 00:00:24,480 --> 00:00:29,240 Speaker 1: and data centers powering artificial intelligence. But if you looked 5 00:00:29,280 --> 00:00:32,000 Speaker 1: at a list of the single biggest electricity consumers in 6 00:00:32,040 --> 00:00:35,520 Speaker 1: the world, you would be surprised. It's not just tech 7 00:00:35,520 --> 00:00:38,720 Speaker 1: companies like Google or Meta, oil and gas firms like 8 00:00:38,800 --> 00:00:43,200 Speaker 1: PetroChina or Shell, or retail giants like Amazon and Walmart. 9 00:00:43,920 --> 00:00:47,919 Speaker 1: It also has companies that you may not recognize linder, 10 00:00:48,320 --> 00:00:54,080 Speaker 1: air licked air products. These are all producers of industrial gases. 11 00:00:54,840 --> 00:00:59,000 Speaker 1: That's right. These companies make things like nitrogen and oxygen 12 00:00:59,280 --> 00:01:03,160 Speaker 1: and hydrogen gases that get used in steel manufacturing and 13 00:01:03,280 --> 00:01:08,360 Speaker 1: refrigeration and chemicals production, among many other things that you 14 00:01:08,480 --> 00:01:12,840 Speaker 1: are consuming on a daily basis. Together, these three companies 15 00:01:12,840 --> 00:01:15,959 Speaker 1: control about seventy percent of what is a one hundred 16 00:01:15,959 --> 00:01:21,800 Speaker 1: and twenty billion dollar global market for industrial gases. And 17 00:01:21,920 --> 00:01:26,040 Speaker 1: because the production of these gases is energy intensive, individually, 18 00:01:26,400 --> 00:01:30,080 Speaker 1: these companies consume as much electricity as small to medium 19 00:01:30,160 --> 00:01:34,720 Speaker 1: sized European countries. So as the world looks to electrify, 20 00:01:34,800 --> 00:01:38,000 Speaker 1: faster and do so at lower energy prices and with 21 00:01:38,080 --> 00:01:42,479 Speaker 1: fewer carbon emissions. It's important we understand what these electricity 22 00:01:42,520 --> 00:01:46,959 Speaker 1: giants are doing. Today's guest is Sanjivlamba, CEO of Linda, 23 00:01:47,400 --> 00:01:51,000 Speaker 1: the biggest of the three industrial gases companies, with operations 24 00:01:51,040 --> 00:01:54,480 Speaker 1: in more than eighty countries. What Linda does is a 25 00:01:54,480 --> 00:01:57,520 Speaker 1: strong reflection of where the industry as a whole is 26 00:01:57,600 --> 00:02:00,920 Speaker 1: going on climate goals. So I wanted to find out 27 00:02:00,960 --> 00:02:04,720 Speaker 1: from sun Jeev how he sees electricity demand changing, what 28 00:02:04,840 --> 00:02:08,160 Speaker 1: Linda is doing to transition to cleaner sources, and whether 29 00:02:08,440 --> 00:02:12,560 Speaker 1: low carbon hydrogen can ever become big business. Do also 30 00:02:12,639 --> 00:02:15,040 Speaker 1: check out a more deeply reported story I have on 31 00:02:15,080 --> 00:02:18,720 Speaker 1: this topic of hidden electricity consumers on Bloomberg Green. The 32 00:02:18,800 --> 00:02:21,400 Speaker 1: link is in the show notes. Also, if you have 33 00:02:21,480 --> 00:02:25,000 Speaker 1: any feedback about this episode or any others, please write 34 00:02:25,000 --> 00:02:31,880 Speaker 1: to me at zero Pod at Bloomberg dot net. Welcome 35 00:02:31,880 --> 00:02:33,480 Speaker 1: to the show, Sanjeef. 36 00:02:33,080 --> 00:02:35,200 Speaker 2: Thank you, Aksha. Delighted to be here with you today. 37 00:02:35,520 --> 00:02:37,680 Speaker 1: So I grew up in India and there was a 38 00:02:37,760 --> 00:02:40,840 Speaker 1: series of books that got me hooked on science and engineering, 39 00:02:41,000 --> 00:02:43,600 Speaker 1: which is why I ended up studying chemical engineering and 40 00:02:43,639 --> 00:02:46,040 Speaker 1: then doing a PhD in chemistry. But I'm a journalist now, 41 00:02:46,160 --> 00:02:48,240 Speaker 1: but that series of books still stays with me. It 42 00:02:48,320 --> 00:02:51,480 Speaker 1: was called How Things Work, and it had these engaging 43 00:02:51,480 --> 00:02:55,320 Speaker 1: explanations and diagrams showing the insights of everyday things like 44 00:02:55,440 --> 00:02:59,600 Speaker 1: a refrigerator or an iron, and it revealed the inner 45 00:02:59,639 --> 00:03:04,440 Speaker 1: workings of everyday objects that most people didn't say and 46 00:03:04,680 --> 00:03:06,880 Speaker 1: give me an insight and made me feel a little 47 00:03:06,919 --> 00:03:11,239 Speaker 1: smarter than everybody else. You run Linder and it does 48 00:03:11,280 --> 00:03:15,360 Speaker 1: something that most people just aren't aware of. So let's 49 00:03:15,400 --> 00:03:19,120 Speaker 1: start with just trying to understand what does your business do. 50 00:03:19,639 --> 00:03:22,480 Speaker 2: That's a great way to start, uc SHOT and I'm 51 00:03:22,480 --> 00:03:26,000 Speaker 2: delighted you read those books. I remember reading them as well. 52 00:03:26,120 --> 00:03:31,600 Speaker 2: So industrial gases such as oxygen, nitrogen, organ hydrogen, carbon 53 00:03:31,639 --> 00:03:36,760 Speaker 2: dioxide are largely invisible. You can't smell them. But the reality, 54 00:03:36,840 --> 00:03:39,880 Speaker 2: uc shot is, and I say this often, you know, jokingly, 55 00:03:39,920 --> 00:03:43,640 Speaker 2: to my friends and colleagues, they are in every bit 56 00:03:43,880 --> 00:03:46,880 Speaker 2: of the world around you. If you have an iPhone, 57 00:03:47,000 --> 00:03:49,800 Speaker 2: we have a bit of our gases helping manufacture the 58 00:03:49,880 --> 00:03:52,280 Speaker 2: chip that goes into the iPhone, or indeed the glass. 59 00:03:52,920 --> 00:03:56,880 Speaker 2: You know, if you're having a nice beer or a coke. 60 00:03:57,280 --> 00:03:59,800 Speaker 2: You know, the carbonation we provide in there makes all 61 00:03:59,840 --> 00:04:02,320 Speaker 2: the difference. Imagine a flat coke or a flat beer, 62 00:04:02,320 --> 00:04:06,160 Speaker 2: it would be terrible. So it's in different ways that 63 00:04:06,200 --> 00:04:09,800 Speaker 2: we contribute to either the industrial processes, being very much 64 00:04:09,880 --> 00:04:14,280 Speaker 2: part of the industrial process or in other cases we 65 00:04:14,440 --> 00:04:17,159 Speaker 2: kind of as an example, will freeze about two billion 66 00:04:17,240 --> 00:04:19,520 Speaker 2: pizzas a year. I'm not quite sure who eats them. 67 00:04:19,880 --> 00:04:22,440 Speaker 2: Probably most of them go to my kids. But that's 68 00:04:22,480 --> 00:04:25,680 Speaker 2: another example of where industrial gases come into play. What 69 00:04:25,720 --> 00:04:28,960 Speaker 2: do we do These invisible molecules make our lives better, 70 00:04:29,360 --> 00:04:32,560 Speaker 2: Whether it's your vegetables that are that are fresher, whether 71 00:04:32,560 --> 00:04:34,839 Speaker 2: it's your television that is brighter and gives you a 72 00:04:34,839 --> 00:04:37,680 Speaker 2: better quality picture, or of course your beer or your 73 00:04:37,720 --> 00:04:40,839 Speaker 2: coke that that you will enjoy. Maybe one example to 74 00:04:40,880 --> 00:04:43,839 Speaker 2: try and give you the breadth or the diversity of 75 00:04:43,839 --> 00:04:46,400 Speaker 2: applications as well, I'll start with oxygen. It's a well 76 00:04:46,440 --> 00:04:48,640 Speaker 2: known molecule. You and I are breathing it as we speak, 77 00:04:48,720 --> 00:04:53,680 Speaker 2: so it's obviously important to life, but we use it 78 00:04:53,680 --> 00:04:56,720 Speaker 2: in manufacturing across a range of industries. And I want 79 00:04:56,720 --> 00:04:58,800 Speaker 2: to give you that breadth because it kind of is 80 00:04:58,839 --> 00:04:59,760 Speaker 2: breathtaking if you. 81 00:04:59,760 --> 00:05:02,280 Speaker 1: Will, breadth giving too, bread. 82 00:05:02,000 --> 00:05:05,599 Speaker 2: Giving too indeed, but outside with metals right, so steel, 83 00:05:05,600 --> 00:05:08,360 Speaker 2: No steel can be produced without oxygen, nitrogen and argon 84 00:05:08,440 --> 00:05:11,719 Speaker 2: being being part of that. But oxygen particularly or glass 85 00:05:11,760 --> 00:05:14,080 Speaker 2: for instance, you know, if you're having a you know, 86 00:05:14,240 --> 00:05:17,040 Speaker 2: a drink, you're using a glass that's had some oxygen 87 00:05:17,480 --> 00:05:22,279 Speaker 2: built in it. Aquaculture increasingly more oxygen usage in aquaculture today. 88 00:05:23,279 --> 00:05:26,680 Speaker 2: Now on the slightly more esoteric side, we help rockets 89 00:05:26,800 --> 00:05:32,040 Speaker 2: launch using oxygen as part of the fuel that cambus. 90 00:05:32,200 --> 00:05:35,640 Speaker 2: Obviously we talked about breathing it. Therefore, for health care, 91 00:05:35,680 --> 00:05:38,160 Speaker 2: you know, during COVID, we had to bring medical oxygen 92 00:05:38,160 --> 00:05:41,640 Speaker 2: from all over the world to hotspots where COVID patients 93 00:05:41,680 --> 00:05:45,359 Speaker 2: were essentially gasping for oxygen, and we had to do 94 00:05:45,400 --> 00:05:47,839 Speaker 2: our best to make sure that that was available. Now, 95 00:05:48,120 --> 00:05:51,719 Speaker 2: levels of purity, how the application actually happens, et cetera, 96 00:05:51,880 --> 00:05:56,200 Speaker 2: that varies. But the molecule itself is life giving. It 97 00:05:56,279 --> 00:06:00,800 Speaker 2: provides industrial you know, momentum in every industrialty or almost 98 00:06:00,800 --> 00:06:04,599 Speaker 2: every industrial activity, and can be used to help humanity generally. 99 00:06:04,760 --> 00:06:07,760 Speaker 1: Give me an example of a weird gas. Maybe it's 100 00:06:07,800 --> 00:06:11,000 Speaker 1: not a big business, maybe it's not something you think 101 00:06:11,000 --> 00:06:13,760 Speaker 1: about daily, but you know, is interesting is weird? 102 00:06:14,040 --> 00:06:17,480 Speaker 2: Oh, there are many at the most interesting levels in 103 00:06:17,560 --> 00:06:22,280 Speaker 2: nitros oxide obviously also known as laughing gas, essential in 104 00:06:22,680 --> 00:06:25,360 Speaker 2: many surgeries and procedures as an anesthetic. 105 00:06:25,520 --> 00:06:29,840 Speaker 1: Yes, but also there's recreational use of nitrosoxide. Let's be 106 00:06:29,920 --> 00:06:30,520 Speaker 1: careful here. 107 00:06:30,520 --> 00:06:32,440 Speaker 2: We have done a lot of education around to make 108 00:06:32,480 --> 00:06:35,240 Speaker 2: sure that that you know, is not something that is 109 00:06:35,360 --> 00:06:38,320 Speaker 2: actively done. And I think, but you're right. I mean 110 00:06:38,800 --> 00:06:42,440 Speaker 2: every you know, every product in the world has elements 111 00:06:42,480 --> 00:06:44,880 Speaker 2: that can be abused around it. Helium is the other 112 00:06:44,960 --> 00:06:48,000 Speaker 2: one which is an interesting gas. I think it's it's 113 00:06:48,000 --> 00:06:52,920 Speaker 2: one that has you know, wide usage from semiconductors to 114 00:06:53,240 --> 00:06:57,240 Speaker 2: MRIs for cooling of course, and then I mentioned, you know, 115 00:06:57,279 --> 00:07:02,720 Speaker 2: cryogenic cooling using helium and helium isotol for quantum computing. 116 00:07:02,600 --> 00:07:04,520 Speaker 1: Just because I am a nerd and I feel like 117 00:07:04,640 --> 00:07:07,280 Speaker 1: this is a stat that people should know about. The 118 00:07:07,360 --> 00:07:11,120 Speaker 1: fact that people could perhaps share is that hydrogen, the 119 00:07:11,240 --> 00:07:15,000 Speaker 1: first element on the periodic table, is so light that 120 00:07:15,040 --> 00:07:19,720 Speaker 1: if it escapes, it can escape the gravity of Earth 121 00:07:19,920 --> 00:07:23,520 Speaker 1: and go into space. Helium does that too, to some extent, 122 00:07:24,080 --> 00:07:27,520 Speaker 1: but not as easily as hydrogen does it let's come 123 00:07:27,560 --> 00:07:30,560 Speaker 1: to the business side. You talked about all these gases. 124 00:07:30,840 --> 00:07:35,640 Speaker 1: Just talk me through where are you seeing the business grow, 125 00:07:35,960 --> 00:07:40,760 Speaker 1: where is it shrinking, and where is it most uncertain? 126 00:07:41,640 --> 00:07:45,120 Speaker 2: So industrial gases, because of the nature of the application 127 00:07:45,200 --> 00:07:47,200 Speaker 2: that I just described to you, the breadth that we 128 00:07:47,320 --> 00:07:51,559 Speaker 2: see are embedded in every industrial activity and beyond. So 129 00:07:52,120 --> 00:07:57,240 Speaker 2: for us, growth is intrinsically linked to how the economic 130 00:07:57,280 --> 00:08:01,080 Speaker 2: activity is progressing around the world, and we often, you know, 131 00:08:01,160 --> 00:08:05,120 Speaker 2: kind of think of ourselves as a proxy for industrial activity. 132 00:08:05,200 --> 00:08:09,200 Speaker 2: So for us, the industrial production index or IP is 133 00:08:09,240 --> 00:08:12,840 Speaker 2: really where you know, we see the most level of correlation, 134 00:08:12,920 --> 00:08:15,880 Speaker 2: if you like, in terms of where growth for gases 135 00:08:15,920 --> 00:08:19,120 Speaker 2: comes from. Clearly, you know, we've been in a kind 136 00:08:19,160 --> 00:08:21,360 Speaker 2: of an industrial recession over the last two two and 137 00:08:21,400 --> 00:08:24,160 Speaker 2: a half years. When we look around the world, industrial 138 00:08:24,160 --> 00:08:27,680 Speaker 2: activity hasn't been growing at that level. But intrinsic to 139 00:08:27,720 --> 00:08:31,400 Speaker 2: every industrial activity and every industrial cycle is the growth 140 00:08:31,440 --> 00:08:34,240 Speaker 2: of gases. The growth today is coming from largely the 141 00:08:34,280 --> 00:08:38,040 Speaker 2: resilient markets, which are healthcare, food, and beverage. It doesn't matter, 142 00:08:38,080 --> 00:08:40,319 Speaker 2: you know, if the economy is doing well or otherwise. 143 00:08:40,360 --> 00:08:42,679 Speaker 2: People have to eat and they have to go go 144 00:08:42,720 --> 00:08:47,720 Speaker 2: and visit a doctor or oftentimes even go to the hospital. Electronics, 145 00:08:47,760 --> 00:08:51,440 Speaker 2: which because of this momentum around AI, data centers, et cetera, 146 00:08:51,960 --> 00:08:54,680 Speaker 2: is finding, you know, a lot of opportunity providing a 147 00:08:54,679 --> 00:08:57,200 Speaker 2: lot of opportunity for growth as well. So again, I 148 00:08:57,200 --> 00:09:00,319 Speaker 2: think those resilient markets are proving to be exact actually 149 00:09:00,360 --> 00:09:03,959 Speaker 2: that being resilient through this economic cycle and providing some 150 00:09:04,000 --> 00:09:04,839 Speaker 2: growth for us. 151 00:09:05,080 --> 00:09:07,200 Speaker 1: So this is a climate podcast, and I want to 152 00:09:07,200 --> 00:09:10,160 Speaker 1: spend a lot of our time talking about energy and 153 00:09:10,200 --> 00:09:14,880 Speaker 1: emissions and hydrogen. Now, as a trained chemical engineer, I 154 00:09:14,960 --> 00:09:19,720 Speaker 1: knew these gases are very energy intensive to produce, but 155 00:09:19,800 --> 00:09:22,680 Speaker 1: there were still things about Linda's scope one and two 156 00:09:22,800 --> 00:09:25,480 Speaker 1: emissions that surprised me when I was looking at your 157 00:09:25,480 --> 00:09:28,720 Speaker 1: sustainability report, because if you add up your scope one 158 00:09:28,760 --> 00:09:32,240 Speaker 1: and two emissions, they're actually comparable to what we think 159 00:09:32,280 --> 00:09:37,240 Speaker 1: of as carbon giants like Chevron or BP, or even 160 00:09:37,440 --> 00:09:41,600 Speaker 1: retail giants like Amazon and Walmart. So what have you 161 00:09:41,679 --> 00:09:44,600 Speaker 1: done as a company to reduce your scope one and 162 00:09:44,600 --> 00:09:45,360 Speaker 1: two emissions? 163 00:09:45,760 --> 00:09:48,480 Speaker 2: That's a great question. And Acsha, let me start off 164 00:09:48,520 --> 00:09:50,800 Speaker 2: by providing a headline and then I'll break it down 165 00:09:50,800 --> 00:09:53,160 Speaker 2: and tell you how we think about sustainability and the 166 00:09:53,160 --> 00:09:54,559 Speaker 2: impact that we have, and I'm going to give you 167 00:09:54,600 --> 00:09:58,119 Speaker 2: some real examples to kind of illustrate and make the point. 168 00:09:58,160 --> 00:10:00,160 Speaker 2: The headline that I want to just leave you with 169 00:10:00,360 --> 00:10:03,840 Speaker 2: is our products and services and technologies have helped our 170 00:10:03,880 --> 00:10:07,800 Speaker 2: customers avoid ninety six million metric tons of COOTO equivalent. 171 00:10:08,600 --> 00:10:12,720 Speaker 2: That's an important piece. That's two point six times the 172 00:10:12,760 --> 00:10:15,600 Speaker 2: emissions that we have on our own. So that's an 173 00:10:15,640 --> 00:10:17,840 Speaker 2: important piece to just keep in mind. And where does 174 00:10:17,880 --> 00:10:20,680 Speaker 2: that happen. So let's give those real examples to underpin that. 175 00:10:21,000 --> 00:10:24,559 Speaker 2: Let's start with steel, right, a large customer for us. 176 00:10:24,920 --> 00:10:27,440 Speaker 2: For steel, every one percent of oxygen enrichment that we 177 00:10:27,559 --> 00:10:30,960 Speaker 2: do in a blast furnace increases productivity by about five 178 00:10:31,000 --> 00:10:34,120 Speaker 2: and a half percent, and that's important because that leads 179 00:10:34,160 --> 00:10:37,719 Speaker 2: to lower emissions. If you look at Linda's contribution in 180 00:10:37,760 --> 00:10:39,600 Speaker 2: the last year, so twenty twenty four, you'll see this 181 00:10:39,640 --> 00:10:43,360 Speaker 2: in our sustainable report as well. For steel making a loan, 182 00:10:43,440 --> 00:10:46,480 Speaker 2: we helped avoid eleven point nine you know, million metric 183 00:10:46,559 --> 00:10:50,040 Speaker 2: tons of COEO to equivalent. So there's an example where 184 00:10:50,320 --> 00:10:53,719 Speaker 2: obviously we have an energy intensive process in the air separation, 185 00:10:54,080 --> 00:10:58,240 Speaker 2: but the gases that we provide then help reduce and 186 00:10:58,280 --> 00:11:01,840 Speaker 2: abate eleven point nine million metric tons of ZEO too 187 00:11:01,840 --> 00:11:06,200 Speaker 2: equivalent for steal alone. The same applies for desalturization for fuels. 188 00:11:06,320 --> 00:11:11,319 Speaker 2: Right here we provide hydrogen as an agent for cleaner fuels, 189 00:11:11,520 --> 00:11:15,480 Speaker 2: and essentially last year we helped our customers avoid sixty 190 00:11:15,600 --> 00:11:20,319 Speaker 2: seven point two million metric tons of COEO too equivalent 191 00:11:20,720 --> 00:11:24,920 Speaker 2: through this desulfurization process, making clean fuels. Well before people 192 00:11:24,920 --> 00:11:28,079 Speaker 2: were thinking about you know, clean hydrogen, clean energy, et cetera, 193 00:11:28,520 --> 00:11:30,720 Speaker 2: we were already on the path to doing that. But 194 00:11:30,760 --> 00:11:32,920 Speaker 2: we're not satisfied with that. So we set out a 195 00:11:32,920 --> 00:11:36,640 Speaker 2: sustainability roadmap and we set some goals for ourselves for 196 00:11:36,760 --> 00:11:39,640 Speaker 2: Scope one and two. Our goal is to reduce our 197 00:11:39,840 --> 00:11:43,360 Speaker 2: Scope one into emissions thirty five percent by twenty thirty five, 198 00:11:43,480 --> 00:11:46,000 Speaker 2: while we continue to grow and help our customers continue 199 00:11:46,040 --> 00:11:48,120 Speaker 2: to reduce and abate SEO two at their end. So 200 00:11:48,160 --> 00:11:51,239 Speaker 2: I think that's an important metric to keep in mind. 201 00:11:51,400 --> 00:11:54,760 Speaker 2: We've also said that by twenty fifty we expect to 202 00:11:54,800 --> 00:11:58,440 Speaker 2: be climate neutral, and that's again a big obligation. Now 203 00:11:58,720 --> 00:12:00,640 Speaker 2: I have to be honest and tell you lot needs 204 00:12:00,720 --> 00:12:04,160 Speaker 2: to happen around the grid. Scope to emissions, which I 205 00:12:04,160 --> 00:12:06,720 Speaker 2: think we have less control over, but we obviously are 206 00:12:06,800 --> 00:12:09,400 Speaker 2: doing a lot of work around that, doing our bit 207 00:12:09,559 --> 00:12:11,960 Speaker 2: to make sure that we're supporting the planet. And it's 208 00:12:13,320 --> 00:12:15,240 Speaker 2: at a time where I think that that change and 209 00:12:15,280 --> 00:12:19,240 Speaker 2: sustainable effort is essential. I think remains a critical piece 210 00:12:19,280 --> 00:12:22,040 Speaker 2: on our agenda and something that we take ownership of. 211 00:12:22,320 --> 00:12:24,360 Speaker 1: Let me come to electricity as well, but before I do, 212 00:12:25,240 --> 00:12:28,520 Speaker 1: the measure around two point six times of emissions avoided 213 00:12:28,800 --> 00:12:33,120 Speaker 1: relative to what you produce is a useful measure to know, 214 00:12:33,280 --> 00:12:35,240 Speaker 1: so that you know that there are impacts that are 215 00:12:35,360 --> 00:12:39,120 Speaker 1: positive on the carbon balance sheet. But I'm sure you're 216 00:12:39,160 --> 00:12:45,360 Speaker 1: also aware that avoided emissions as a accounting method has 217 00:12:45,400 --> 00:12:49,840 Speaker 1: its challenges and are tricky to use and sometimes very 218 00:12:50,559 --> 00:12:53,480 Speaker 1: much open to abusing, and which is why there has 219 00:12:53,600 --> 00:12:56,439 Speaker 1: been some movement towards making these scope for emissions sort 220 00:12:56,440 --> 00:12:59,920 Speaker 1: of these emissions that are influencing or helping some other 221 00:13:00,360 --> 00:13:02,960 Speaker 1: to account for them, but they don't really negate, so 222 00:13:03,080 --> 00:13:06,240 Speaker 1: to speak, the emissions that the company is generating in 223 00:13:06,240 --> 00:13:08,679 Speaker 1: the process. Those still need to be reduced. So that's 224 00:13:08,679 --> 00:13:11,640 Speaker 1: why you said you have this climate plan, which you 225 00:13:11,640 --> 00:13:13,920 Speaker 1: know is there for a good reason. It's not just 226 00:13:13,960 --> 00:13:17,000 Speaker 1: that you can only help others avoid emissions, you also 227 00:13:17,080 --> 00:13:17,920 Speaker 1: have to reduce your own. 228 00:13:18,040 --> 00:13:20,880 Speaker 2: Actually, i'll make two points over here. The first I 229 00:13:20,880 --> 00:13:23,840 Speaker 2: want to make is our first Sustainabiley Report came out 230 00:13:24,000 --> 00:13:27,280 Speaker 2: in twenty thirteen, well before it became fashionable to talk 231 00:13:27,320 --> 00:13:32,320 Speaker 2: about sustainability and set goals. Our carbon productivity measure was 232 00:13:32,360 --> 00:13:35,120 Speaker 2: instituted at that point in time. It's almost twelve thirteen 233 00:13:35,200 --> 00:13:38,120 Speaker 2: years ago. It's not new, it's something that stood the 234 00:13:38,160 --> 00:13:41,360 Speaker 2: test of time. It's something that we've publicly communicated every year. 235 00:13:41,400 --> 00:13:43,600 Speaker 2: So I just want to make the point that we 236 00:13:43,640 --> 00:13:46,680 Speaker 2: don't do this because it's fashionable or you know, esgs, 237 00:13:47,240 --> 00:13:49,679 Speaker 2: you know, in everyone's focus. We do it because it's 238 00:13:49,679 --> 00:13:52,880 Speaker 2: the right thing to do. Our mission as a corporation 239 00:13:53,120 --> 00:13:56,280 Speaker 2: is to make our world more productive sustainably, and I 240 00:13:56,280 --> 00:14:00,200 Speaker 2: think our sustainably roadmap, you know, kind of leads us 241 00:14:00,760 --> 00:14:03,280 Speaker 2: into that mission that we're trying to achieve. So you're 242 00:14:03,320 --> 00:14:05,720 Speaker 2: absolutely right, and I think from our perspective, we are 243 00:14:05,760 --> 00:14:10,280 Speaker 2: not really you know, either concerned or excited about the 244 00:14:10,320 --> 00:14:14,920 Speaker 2: carbon accounting of a measure of abatement and support that 245 00:14:14,960 --> 00:14:17,560 Speaker 2: replied to a customer. We believe it's right for the 246 00:14:17,600 --> 00:14:19,320 Speaker 2: planet that we do that, and I think that's one 247 00:14:19,320 --> 00:14:21,040 Speaker 2: of the reasons we will continue down that path. 248 00:14:21,400 --> 00:14:24,440 Speaker 1: So coming to electricity, Yeah, it is kind of surprising 249 00:14:24,480 --> 00:14:28,280 Speaker 1: that Linda consumes as much electricity as the entirety of Denmark. 250 00:14:29,240 --> 00:14:31,680 Speaker 1: And even if we look at just comparing you to 251 00:14:31,720 --> 00:14:36,480 Speaker 1: other companies, Linda's electricity consumption is as much as Google 252 00:14:36,640 --> 00:14:40,760 Speaker 1: or Microsoft, or if we look at oil and gas companies, 253 00:14:40,800 --> 00:14:45,560 Speaker 1: as much as Sinopeck and Total Energies. Linder consumes a 254 00:14:45,600 --> 00:14:50,120 Speaker 1: lot of electricity and that also means that electricity must 255 00:14:50,160 --> 00:14:53,240 Speaker 1: be a big part of your spending. So what have 256 00:14:53,320 --> 00:14:55,560 Speaker 1: you done to try and reduce the amount of electricity 257 00:14:55,760 --> 00:14:56,560 Speaker 1: that you are using. 258 00:14:57,320 --> 00:15:00,480 Speaker 2: That's a great question. So you know, most of these 259 00:15:00,600 --> 00:15:04,680 Speaker 2: large industries have outsourced their gas requirements to US, which 260 00:15:04,720 --> 00:15:08,040 Speaker 2: previously was captive and therefore you know those emissions scope 261 00:15:08,040 --> 00:15:11,000 Speaker 2: to emissions would sit in their balance sheet. They've outsourced 262 00:15:11,040 --> 00:15:13,080 Speaker 2: that to us for a number of reasons, including the 263 00:15:13,120 --> 00:15:16,040 Speaker 2: fact that we are constantly thinking about how we make 264 00:15:16,120 --> 00:15:19,200 Speaker 2: that process more efficient. But also more importantly, actually the 265 00:15:19,240 --> 00:15:22,120 Speaker 2: fact that we are a large consumer of electricity is 266 00:15:22,160 --> 00:15:24,400 Speaker 2: in some ways a good thing because it gives us 267 00:15:24,440 --> 00:15:28,760 Speaker 2: the leverage that we need to push to say how 268 00:15:28,800 --> 00:15:32,760 Speaker 2: renewable energy can become a larger part of that portfolio 269 00:15:32,800 --> 00:15:35,600 Speaker 2: of energy that we consume. Let's talk about what are 270 00:15:35,640 --> 00:15:37,520 Speaker 2: we doing about it? That was your question. Let me 271 00:15:37,560 --> 00:15:42,240 Speaker 2: answer that fairly directly. In my mind, our sustainability goals 272 00:15:42,360 --> 00:15:45,640 Speaker 2: put us on a path to ensuring that every action 273 00:15:45,800 --> 00:15:49,680 Speaker 2: we can take to reduce electricity consumption and to ensure 274 00:15:50,040 --> 00:15:53,760 Speaker 2: that we increase the portion, the proportion of low carbon 275 00:15:54,680 --> 00:15:57,600 Speaker 2: energy that we can access, you know, for our operations 276 00:15:58,040 --> 00:16:01,440 Speaker 2: is a key measure, not just a key measure. Actually 277 00:16:01,480 --> 00:16:06,480 Speaker 2: we have that metric sitting in the compensation program for 278 00:16:06,560 --> 00:16:09,920 Speaker 2: our leaders as well, including my own, to make sure 279 00:16:09,960 --> 00:16:13,120 Speaker 2: that it has the focus that it deserves. There are 280 00:16:13,160 --> 00:16:16,120 Speaker 2: two ways we address that issue. The first is by 281 00:16:16,160 --> 00:16:18,480 Speaker 2: reducing consumption, and the way we do that is by 282 00:16:18,480 --> 00:16:24,200 Speaker 2: continuously looking at our operations, finding innovation, finding solutions that 283 00:16:24,440 --> 00:16:28,040 Speaker 2: ensure that we're creating a higher efficiency ratio within that, 284 00:16:28,480 --> 00:16:31,480 Speaker 2: investing in technology that shows that happens. A good example 285 00:16:31,520 --> 00:16:34,120 Speaker 2: of that is, you know, we've introduced a flex asu 286 00:16:34,240 --> 00:16:36,720 Speaker 2: flex a su a sus you know are notorious for 287 00:16:36,840 --> 00:16:39,200 Speaker 2: not being able to turn down effectively quickly. 288 00:16:39,400 --> 00:16:41,920 Speaker 1: Yeah, I think it's worth explaining what an ASU is 289 00:16:42,000 --> 00:16:44,240 Speaker 1: because that's the core part of your gases. So an 290 00:16:44,280 --> 00:16:48,000 Speaker 1: air separation unit, which and tell me what one looks like, 291 00:16:48,080 --> 00:16:50,640 Speaker 1: because I feel like most people haven't seen one. But 292 00:16:50,720 --> 00:16:55,480 Speaker 1: it's supposed to use energy, typically either coming from electricity 293 00:16:55,720 --> 00:16:58,480 Speaker 1: or from some form of fuel that is making steam 294 00:16:58,560 --> 00:17:01,760 Speaker 1: which is then running a compress, right, and so yeah, 295 00:17:01,800 --> 00:17:05,560 Speaker 1: describe what an AESU looks like and tell us what 296 00:17:05,880 --> 00:17:08,280 Speaker 1: part of it needs to become more efficient and how 297 00:17:08,320 --> 00:17:10,480 Speaker 1: do you move away from fossil fuels in the process. 298 00:17:11,040 --> 00:17:15,320 Speaker 2: So I could spend hours describing an air separation I'll 299 00:17:15,760 --> 00:17:18,680 Speaker 2: resist that temptation. Actually, then just say that if you're 300 00:17:18,760 --> 00:17:22,000 Speaker 2: driving down and you see a very large one hundred 301 00:17:22,000 --> 00:17:25,560 Speaker 2: and fifty to two hundred meters tall white column, usually 302 00:17:25,560 --> 00:17:28,480 Speaker 2: with the Linder logo on it, that is the column 303 00:17:28,520 --> 00:17:31,879 Speaker 2: that does the distillation for an air separation. What effectively 304 00:17:31,920 --> 00:17:35,960 Speaker 2: happens is we take air, we use electricity, and through 305 00:17:35,960 --> 00:17:39,320 Speaker 2: a process of distillation, we're able to separate the gases. 306 00:17:39,560 --> 00:17:43,000 Speaker 2: We have large storage tanks, usually also white and large, 307 00:17:43,280 --> 00:17:46,600 Speaker 2: into which we will take the liquid oxygen, liquid nitrogen, 308 00:17:46,680 --> 00:17:50,439 Speaker 2: and liquid organ After having liquified the gases. Some amount 309 00:17:50,440 --> 00:17:53,120 Speaker 2: of gases will go to a gas pipeline and serve 310 00:17:53,160 --> 00:17:56,720 Speaker 2: a customer directly as steel mill or a semiconductor fab 311 00:17:57,000 --> 00:17:59,080 Speaker 2: and the others will go into these tanks and be 312 00:17:59,160 --> 00:18:02,480 Speaker 2: stored as liquor quid cryogenic liquids, which will then be 313 00:18:02,520 --> 00:18:04,840 Speaker 2: put into row tankers. Again, you may see some of 314 00:18:04,880 --> 00:18:08,200 Speaker 2: these and transport it to our mid sized customers where 315 00:18:08,240 --> 00:18:11,359 Speaker 2: we would provide that liquid oxygen nitrogen organ for their 316 00:18:11,720 --> 00:18:13,480 Speaker 2: industrial processes and usage. 317 00:18:13,560 --> 00:18:17,200 Speaker 1: And people should realize, like even though air is everywhere, 318 00:18:17,320 --> 00:18:20,000 Speaker 1: to be able to separate these gases requires just a 319 00:18:20,080 --> 00:18:23,400 Speaker 1: ton of energy compressing a gas. And you know, if 320 00:18:23,400 --> 00:18:26,960 Speaker 1: you're providing gases that are at minus two hundred degree celsius, 321 00:18:27,160 --> 00:18:30,359 Speaker 1: you know, nitrogen is minus one ninety six degree celsius. 322 00:18:30,560 --> 00:18:33,119 Speaker 1: That's a lot of energy that needs to be taken 323 00:18:33,240 --> 00:18:36,720 Speaker 1: out of the system, which is what these separation units 324 00:18:36,720 --> 00:18:39,000 Speaker 1: are doing. Now, you said electricity, but some of them 325 00:18:39,080 --> 00:18:42,280 Speaker 1: also just use fossil fuels, right, They'll generate steam and 326 00:18:42,320 --> 00:18:45,480 Speaker 1: then the steam is running compression plants. 327 00:18:45,520 --> 00:18:47,879 Speaker 2: Actually it's not our preferred option to use steam, but 328 00:18:47,920 --> 00:18:50,480 Speaker 2: there are steam drives and that usually happens when the 329 00:18:50,520 --> 00:18:54,359 Speaker 2: customer has excess steam available and wants to find a 330 00:18:54,400 --> 00:18:58,280 Speaker 2: way to utilize that. So in some ways that excess 331 00:18:58,320 --> 00:19:01,600 Speaker 2: steam is effectively utilized using a steam drive that runs 332 00:19:01,640 --> 00:19:04,040 Speaker 2: the ASUS and provides the power that would otherwise have 333 00:19:04,119 --> 00:19:06,720 Speaker 2: come through the grid, And I think that's one way 334 00:19:06,760 --> 00:19:08,800 Speaker 2: to think about it. I have to say, most of 335 00:19:08,840 --> 00:19:12,520 Speaker 2: this steam driven assets that we have sit in China, 336 00:19:13,000 --> 00:19:16,919 Speaker 2: which are integrated into an industrial park where customers typically 337 00:19:16,960 --> 00:19:19,840 Speaker 2: would have excess steam available, and many of those are 338 00:19:19,840 --> 00:19:22,119 Speaker 2: going through a process of conversion to electric drive. So 339 00:19:22,119 --> 00:19:24,960 Speaker 2: from our perspective, that is an area that we would 340 00:19:25,000 --> 00:19:27,200 Speaker 2: like to address as quickly as possible, and in fact, 341 00:19:27,600 --> 00:19:30,320 Speaker 2: I'm pleased that really we've already undertaken I think two 342 00:19:30,359 --> 00:19:33,359 Speaker 2: to three conversions already, and I expect most of the 343 00:19:33,400 --> 00:19:36,120 Speaker 2: other conversions will happen fairly quickly. But let's talk about 344 00:19:36,160 --> 00:19:39,320 Speaker 2: the grid, because that's where most of our power consumption 345 00:19:39,440 --> 00:19:42,640 Speaker 2: comes from. So as grids are seeing more and more 346 00:19:42,680 --> 00:19:46,840 Speaker 2: renewable power, you're also seeing greater volatility on the grid 347 00:19:46,840 --> 00:19:50,320 Speaker 2: and the ability to access power the FLEXASU and I 348 00:19:50,359 --> 00:19:53,639 Speaker 2: said earlier on for a ASU to turn down at 349 00:19:54,160 --> 00:19:58,119 Speaker 2: short notice is quite a challenge. Our FLEXASU design is 350 00:19:58,160 --> 00:20:03,440 Speaker 2: being specifically done allowing production levels that can be optimized 351 00:20:03,480 --> 00:20:06,640 Speaker 2: to synchronize with the availability of renewable energy, and that 352 00:20:06,760 --> 00:20:08,959 Speaker 2: flexibility I think will go a long way. We have, 353 00:20:09,080 --> 00:20:12,320 Speaker 2: as you know, a flex asure currently operating, and we're 354 00:20:12,320 --> 00:20:15,639 Speaker 2: looking at deploying many more for exactly the reason that 355 00:20:15,680 --> 00:20:18,919 Speaker 2: we can now synchronize with the ebbs and flows that 356 00:20:18,960 --> 00:20:22,440 Speaker 2: come from renewable energy coming into the grid. We're now 357 00:20:22,560 --> 00:20:25,520 Speaker 2: using AI based models that we've trained over the last 358 00:20:25,560 --> 00:20:29,679 Speaker 2: few years, using our own propriety technology and models to 359 00:20:29,760 --> 00:20:32,840 Speaker 2: find ways of increasing operational efficiency as well. So you know, 360 00:20:32,880 --> 00:20:35,199 Speaker 2: a good example of that is when we know that 361 00:20:35,240 --> 00:20:38,879 Speaker 2: there is variability on access to power, we're able to 362 00:20:39,040 --> 00:20:41,800 Speaker 2: you know, run the power up, run the ASU up 363 00:20:41,920 --> 00:20:45,399 Speaker 2: using the power available, build some stock levels through a 364 00:20:45,440 --> 00:20:49,040 Speaker 2: predictive mechanism which kind of looks at what the grid 365 00:20:49,119 --> 00:20:51,639 Speaker 2: is doing, you know, what our production levels are, what 366 00:20:51,720 --> 00:20:54,439 Speaker 2: the customer inventory is, and triangulating a lot of that 367 00:20:54,560 --> 00:20:57,119 Speaker 2: data and trained to focus is to the level of 368 00:20:57,119 --> 00:21:00,119 Speaker 2: production we can have whereby we are actually running the 369 00:21:00,760 --> 00:21:04,120 Speaker 2: air separation units at the most optimum level that we can. 370 00:21:04,520 --> 00:21:06,159 Speaker 2: The second piece I want to just talk about is 371 00:21:06,200 --> 00:21:10,000 Speaker 2: sourcing low carbon power. So, as you said, you know, 372 00:21:10,040 --> 00:21:11,840 Speaker 2: we do consume a fair amount of power, and we 373 00:21:11,920 --> 00:21:15,760 Speaker 2: have made some really good progress in sourcing renewable power, 374 00:21:15,760 --> 00:21:18,119 Speaker 2: and I think that's an important piece as well in 375 00:21:18,160 --> 00:21:21,400 Speaker 2: trying to manage our scope to emissions, but more broadly, 376 00:21:21,880 --> 00:21:28,680 Speaker 2: provide the impetus that the renewable energy development needs by 377 00:21:28,920 --> 00:21:32,040 Speaker 2: ensuring that we are signing PPAs we are in some 378 00:21:32,080 --> 00:21:36,320 Speaker 2: cases even participating in those projects directly ourselves, either through 379 00:21:36,359 --> 00:21:41,119 Speaker 2: equity or providing bankable guarantees to those projects, and ensuring 380 00:21:41,160 --> 00:21:43,520 Speaker 2: that those projects then come to fruition. And I think 381 00:21:43,560 --> 00:21:45,520 Speaker 2: since twenty twenty one, I think, if I'm not wrong, 382 00:21:45,560 --> 00:21:48,879 Speaker 2: our data would be that we have literally, you know, 383 00:21:48,920 --> 00:21:51,879 Speaker 2: through pow purchase agreements in places like the US and 384 00:21:52,040 --> 00:21:56,840 Speaker 2: China and India, Spain and Philippines and many other markets. 385 00:21:57,080 --> 00:22:01,880 Speaker 2: You know, we've almost now doubled our consumption of renewable energy. 386 00:22:02,080 --> 00:22:04,120 Speaker 1: Let's look at the fine print of that. Forty seven 387 00:22:04,200 --> 00:22:07,720 Speaker 1: percent of electricity comes from low carbon power, according to 388 00:22:07,800 --> 00:22:13,959 Speaker 1: your sustainability report, but only about twelve percent comes from 389 00:22:14,160 --> 00:22:17,840 Speaker 1: power purchase agreements that if you directly signed up rest 390 00:22:17,880 --> 00:22:22,720 Speaker 1: of it. So the thirty five percent is green because 391 00:22:22,800 --> 00:22:27,720 Speaker 1: of things called energy attribute certificates or renewable energy credits, 392 00:22:28,400 --> 00:22:34,399 Speaker 1: and those are at one point they were very important 393 00:22:34,440 --> 00:22:37,040 Speaker 1: instruments to try and bring on more renewable energy onto 394 00:22:37,080 --> 00:22:39,639 Speaker 1: the grid when it was more expensive. It needed this 395 00:22:39,800 --> 00:22:43,000 Speaker 1: additional layer of payment in the form of a renewable 396 00:22:43,119 --> 00:22:47,439 Speaker 1: energy credit. So what power plant producers did is not 397 00:22:47,560 --> 00:22:50,040 Speaker 1: just provide the power, but they also got this additional layer, 398 00:22:50,040 --> 00:22:52,280 Speaker 1: which is like, because it's green power, we can also 399 00:22:52,440 --> 00:22:55,320 Speaker 1: provide you the attribute of green power. So anybody can 400 00:22:55,359 --> 00:22:57,959 Speaker 1: consume the electricity, but we'll give you the attribute if 401 00:22:58,000 --> 00:23:01,240 Speaker 1: you give us a little premium. Those certificates and those 402 00:23:01,240 --> 00:23:05,480 Speaker 1: attributes now are by most experts considered non additional, which 403 00:23:05,520 --> 00:23:08,200 Speaker 1: is to say, they are not driving more renewables to 404 00:23:08,280 --> 00:23:10,440 Speaker 1: be added to the grid. So what are you doing 405 00:23:10,520 --> 00:23:14,719 Speaker 1: to move away from renewable energy credits or energy attribute certificates. 406 00:23:14,760 --> 00:23:19,359 Speaker 2: We've never been fans of credits or attribute certificates, to 407 00:23:19,359 --> 00:23:21,639 Speaker 2: be honest, and our view always has been that we 408 00:23:21,800 --> 00:23:24,720 Speaker 2: want to be participating in additionality the point that you 409 00:23:24,840 --> 00:23:29,479 Speaker 2: just made in creating new renewable energy assets on the ground. 410 00:23:29,760 --> 00:23:32,919 Speaker 2: So as an example in India where we have a 411 00:23:33,080 --> 00:23:36,440 Speaker 2: very aggressive Program for Sourcing renewable energy. These are all 412 00:23:36,480 --> 00:23:39,560 Speaker 2: PPAs that we signed with new generation facilities that are 413 00:23:39,560 --> 00:23:42,240 Speaker 2: coming up, and we continue to push, push hard on 414 00:23:42,280 --> 00:23:44,840 Speaker 2: that you talked about twelve percent. I mean, I want 415 00:23:44,840 --> 00:23:47,000 Speaker 2: to go back and remind you that over the last 416 00:23:47,000 --> 00:23:49,920 Speaker 2: four years we've doubled that. So there is an active 417 00:23:50,040 --> 00:23:54,000 Speaker 2: push today to move forward and ensure that we're signing 418 00:23:54,040 --> 00:23:56,280 Speaker 2: PPAs that allow us to be able to access the 419 00:23:56,600 --> 00:23:59,440 Speaker 2: clean electron that actually goes into our system. I think 420 00:23:59,480 --> 00:24:02,120 Speaker 2: that's the way to go. There isn't there isn't another way. 421 00:24:02,160 --> 00:24:03,919 Speaker 2: I think that, you know, has to be the purpose 422 00:24:03,960 --> 00:24:06,560 Speaker 2: that we all embrace and kind of move forward with. 423 00:24:07,040 --> 00:24:09,000 Speaker 2: So I'll give you two examples just to kind of 424 00:24:09,000 --> 00:24:11,600 Speaker 2: illustrate the point where we think we've been successful. And 425 00:24:11,600 --> 00:24:14,320 Speaker 2: obviously it's been helped by the fact that those countries 426 00:24:14,400 --> 00:24:16,520 Speaker 2: have you know, done a lot of work to get there. 427 00:24:16,560 --> 00:24:18,320 Speaker 2: The UK is a good example of that. You know, 428 00:24:18,359 --> 00:24:22,400 Speaker 2: in the UK, almost entire user power that we have 429 00:24:22,640 --> 00:24:25,920 Speaker 2: is actually renewable. Another good example of that is Brazil, 430 00:24:26,000 --> 00:24:30,000 Speaker 2: where most of our power comes from hydroelectric and again 431 00:24:30,080 --> 00:24:33,680 Speaker 2: those are great sources of renewable energy, and those countries 432 00:24:33,720 --> 00:24:36,240 Speaker 2: have over time build those assets in We're just hoping 433 00:24:36,280 --> 00:24:38,480 Speaker 2: to see the same scale of build up. And again 434 00:24:38,680 --> 00:24:41,600 Speaker 2: I mentioned India because I'm excited about what I see 435 00:24:41,680 --> 00:24:44,400 Speaker 2: in terms of developments in India at the moment, I'm 436 00:24:44,440 --> 00:24:46,960 Speaker 2: excited about China. To be honest, I'm seeing a lot 437 00:24:47,000 --> 00:24:50,240 Speaker 2: more push three years ago that wasn't the case. I 438 00:24:50,280 --> 00:24:53,280 Speaker 2: am pretty bullish on the fact that we will see 439 00:24:53,320 --> 00:24:57,320 Speaker 2: the renewable energy development happen now. There is all this 440 00:24:57,480 --> 00:25:00,840 Speaker 2: AI data center hype that's not hype. Should correct myself 441 00:25:00,880 --> 00:25:03,480 Speaker 2: there and say, there is an AI data center development 442 00:25:03,640 --> 00:25:05,639 Speaker 2: that is going to pull on that renewable energy. At 443 00:25:05,680 --> 00:25:09,000 Speaker 2: the moment, any electron is welcome, but renewable energy will 444 00:25:09,040 --> 00:25:12,840 Speaker 2: clearly be a target electron for them as well. So 445 00:25:13,240 --> 00:25:15,359 Speaker 2: there will be a little bit more increased competition in 446 00:25:15,440 --> 00:25:19,160 Speaker 2: sourcing those electrons, but we remain quite committed to moving 447 00:25:19,200 --> 00:25:20,040 Speaker 2: forward in that direction. 448 00:25:23,560 --> 00:25:25,760 Speaker 1: Join us after the break for more of my conversation 449 00:25:25,840 --> 00:25:28,600 Speaker 1: with Sanji Blamba and Hey, while I've got you here, 450 00:25:29,000 --> 00:25:32,640 Speaker 1: fancy writing us a review on Apple Podcasts or Spotify. Recently, 451 00:25:32,840 --> 00:25:37,119 Speaker 1: Moira wrote my number one podcast for Climate Updates. Thank you, Moira. 452 00:25:53,240 --> 00:25:55,760 Speaker 1: Coming to hydrogen and your role as the co chair 453 00:25:55,760 --> 00:26:01,359 Speaker 1: of the Hydrogen Consoles Board. It's a that obviously does 454 00:26:01,880 --> 00:26:05,400 Speaker 1: things today in the real economy that are very important 455 00:26:05,400 --> 00:26:09,359 Speaker 1: and crucial. Most of the hydrogen that is produced used 456 00:26:09,400 --> 00:26:13,280 Speaker 1: in places like a refinery come from natural gas, so 457 00:26:13,680 --> 00:26:16,439 Speaker 1: gray hydrogen, as it's known. There is a move to 458 00:26:16,480 --> 00:26:19,160 Speaker 1: try and a move that to green hydrogen, but also 459 00:26:19,480 --> 00:26:21,880 Speaker 1: find ways in which green hydrogen could play a role 460 00:26:22,280 --> 00:26:27,359 Speaker 1: in cleaning up other areas of energy use. Where do 461 00:26:27,520 --> 00:26:31,320 Speaker 1: you stand on hydrogen as an opportunity for the industry. 462 00:26:31,400 --> 00:26:33,840 Speaker 1: It's been something that people have talked about as a 463 00:26:33,840 --> 00:26:37,160 Speaker 1: promise to thing for a long time, but it needs 464 00:26:37,280 --> 00:26:41,080 Speaker 1: renewable electricity to be produced, It needs in many places 465 00:26:41,240 --> 00:26:45,399 Speaker 1: government subsidy to be actually affordable for industry. Do you 466 00:26:45,480 --> 00:26:49,400 Speaker 1: see this as a business opportunity or do you think 467 00:26:49,600 --> 00:26:51,640 Speaker 1: green hydrogen's time is never going to come? 468 00:26:51,920 --> 00:26:55,800 Speaker 2: So I'm going to rephrase that respond by saying, I 469 00:26:55,960 --> 00:27:02,080 Speaker 2: absolutely believe clean hydrogen is a great opportunity for industrial 470 00:27:02,119 --> 00:27:06,400 Speaker 2: decarbonization broadly and for US as an industrial gas company. 471 00:27:06,520 --> 00:27:08,439 Speaker 2: I mentioned clean hydrogen and I'm going to kind of 472 00:27:08,480 --> 00:27:11,560 Speaker 2: elaborate a little bit more on that. I'm sure you're 473 00:27:11,600 --> 00:27:13,680 Speaker 2: going to ask me that anyway, But let's just talk 474 00:27:13,720 --> 00:27:17,119 Speaker 2: about the Hydrogen Council for a minute. So the Hydrogen 475 00:27:17,200 --> 00:27:22,600 Speaker 2: Council recently issued this Global Hydrogen Compass Report, which I 476 00:27:22,680 --> 00:27:26,800 Speaker 2: think is a really good piece of work, and you know, 477 00:27:26,880 --> 00:27:30,000 Speaker 2: as it's a CEO led organization, therefore, the insights that 478 00:27:30,000 --> 00:27:32,879 Speaker 2: we're able to marshal out of that, you know, are 479 00:27:33,359 --> 00:27:35,879 Speaker 2: quite amazing. And I think the conclusions that came out 480 00:27:35,920 --> 00:27:40,320 Speaker 2: of that was the hydrogen development is maturing. We're over 481 00:27:40,320 --> 00:27:43,560 Speaker 2: the hype cycle, HiPE cycles done, We're now seeing a 482 00:27:43,600 --> 00:27:46,359 Speaker 2: more mature development. They pointed out that there have been 483 00:27:46,400 --> 00:27:48,720 Speaker 2: about five hundred projects that have gone to a FID 484 00:27:49,440 --> 00:27:54,360 Speaker 2: or are under construction, commissioning, or operational. That's an investment 485 00:27:54,400 --> 00:27:56,840 Speaker 2: of about one hundred and ten billion, which has picked 486 00:27:56,920 --> 00:28:00,879 Speaker 2: up significantly over the last three or four years. And 487 00:28:00,920 --> 00:28:04,840 Speaker 2: I think that that's an important measure of validating the 488 00:28:04,960 --> 00:28:08,439 Speaker 2: role that hydrogen is going to play going forward, particularly 489 00:28:08,480 --> 00:28:11,600 Speaker 2: clean hydrogen is going to play in helping the process 490 00:28:11,600 --> 00:28:15,280 Speaker 2: of industrial decarbanization. It's also true to say that while 491 00:28:15,880 --> 00:28:20,280 Speaker 2: we went through this euphoria or hype around clean hydrogen 492 00:28:20,320 --> 00:28:25,160 Speaker 2: development go back three or four years ago, hydrogen today 493 00:28:25,359 --> 00:28:28,199 Speaker 2: and the demand and the supply side dynamics that we 494 00:28:28,320 --> 00:28:32,040 Speaker 2: see are real now. In our case, we've selected those 495 00:28:32,080 --> 00:28:36,119 Speaker 2: projects carefully. Not only that, for us, there are some 496 00:28:36,160 --> 00:28:38,320 Speaker 2: conditions to be met. A good condition for that is 497 00:28:38,320 --> 00:28:42,040 Speaker 2: we need a binding long term off take agreement. For us, 498 00:28:42,080 --> 00:28:44,640 Speaker 2: that's a critical measure of whether a project is going 499 00:28:44,720 --> 00:28:46,760 Speaker 2: to move forward or not. And I'll give you two 500 00:28:46,760 --> 00:28:49,760 Speaker 2: examples where we've achieved that, which are under construction today. 501 00:28:50,120 --> 00:28:53,080 Speaker 2: The first is, you know, our example of working with 502 00:28:53,120 --> 00:28:56,560 Speaker 2: Woodside as a partner in Beaumont, Texas. Here we will 503 00:28:56,560 --> 00:29:00,560 Speaker 2: supply low carbon hydrogen to their world scale ammonia complex. 504 00:29:01,400 --> 00:29:03,360 Speaker 2: You know, we will produce the hydrogen. We'll also produce 505 00:29:03,400 --> 00:29:05,760 Speaker 2: the nitrogen. In the case of hydrogen, we'll be doing 506 00:29:05,800 --> 00:29:09,560 Speaker 2: auto thermal reforming, which provides for a highly concentrated SOEO 507 00:29:09,600 --> 00:29:12,840 Speaker 2: to stream which can be captured. In this instance, about 508 00:29:12,880 --> 00:29:15,680 Speaker 2: just over two million metric tons of CO two will 509 00:29:15,720 --> 00:29:19,080 Speaker 2: be captured, and we are using a partner to sequester 510 00:29:19,200 --> 00:29:21,560 Speaker 2: that down hole. That's not expertise we have, so we 511 00:29:21,640 --> 00:29:23,840 Speaker 2: have to work with a partner to do that. We'll 512 00:29:23,840 --> 00:29:27,719 Speaker 2: be working with them to sequester that downhole and there 513 00:29:27,880 --> 00:29:30,960 Speaker 2: by providing low carbon hydrogen to wood Side for their 514 00:29:31,200 --> 00:29:34,520 Speaker 2: Cleanneumonia process that they are instituting. The other example is, 515 00:29:34,560 --> 00:29:37,320 Speaker 2: you know, spending more than two billion dollars in Alberta, Canada, 516 00:29:37,680 --> 00:29:40,400 Speaker 2: and there it is for helping Dow on their Path 517 00:29:40,480 --> 00:29:44,800 Speaker 2: to Zero project, which is you know, basically providing hydrogen 518 00:29:44,960 --> 00:29:48,520 Speaker 2: and atmospheric gases to help them decarbonize their ethylene and 519 00:29:48,760 --> 00:29:52,320 Speaker 2: derivative production facility that sits over there that they're also 520 00:29:52,680 --> 00:29:55,959 Speaker 2: in the process of expanding. Here's an example of bringing 521 00:29:56,000 --> 00:29:59,600 Speaker 2: up an investment case together, working with a good counterparty 522 00:29:59,640 --> 00:30:02,840 Speaker 2: like Dow and making sure that you put that whole 523 00:30:03,280 --> 00:30:06,200 Speaker 2: design parameters in place to provide low carbon hydrogen to 524 00:30:06,280 --> 00:30:08,760 Speaker 2: DOO to allow them to move down the path of 525 00:30:08,840 --> 00:30:12,960 Speaker 2: fuel switching to get to the decarbonized ethylene and downstream 526 00:30:12,960 --> 00:30:15,520 Speaker 2: products that they will be looking at. So two examples. Now, 527 00:30:16,200 --> 00:30:20,080 Speaker 2: for the last four plus years, maybe five years now 528 00:30:20,160 --> 00:30:24,440 Speaker 2: action we've been operating an ATR and clearly where we've 529 00:30:24,480 --> 00:30:27,360 Speaker 2: been capturing the CO two and are now providing that 530 00:30:27,560 --> 00:30:30,800 Speaker 2: to Selenese who is a customer in terms of low 531 00:30:30,800 --> 00:30:34,640 Speaker 2: carbon hydrogen captured CO two which they will then use 532 00:30:34,760 --> 00:30:38,080 Speaker 2: for methanol production, which is an input into their process. 533 00:30:38,400 --> 00:30:40,640 Speaker 2: Here's a good example of something that's been operating for 534 00:30:40,800 --> 00:30:43,600 Speaker 2: a number of years already. This is not fictional, right, 535 00:30:43,640 --> 00:30:48,200 Speaker 2: So when I say hydrogen supply side dynamics are real 536 00:30:48,280 --> 00:30:52,800 Speaker 2: and available today at scale and competitively cost it. Now 537 00:30:53,320 --> 00:30:55,760 Speaker 2: you asked a question about green hydrogen. We are building 538 00:30:55,760 --> 00:30:59,720 Speaker 2: a number of electrolyizers around the world, but electrolyzer technology 539 00:30:59,760 --> 00:31:03,280 Speaker 2: and what I call renewable hydrogen, I don't like colors. 540 00:31:03,360 --> 00:31:05,040 Speaker 2: Just to make sure that I make this point now. 541 00:31:05,280 --> 00:31:07,120 Speaker 2: My view is we should walk away from colors which 542 00:31:07,160 --> 00:31:10,240 Speaker 2: tend to be very emmotive and usually lead to misunderstanding 543 00:31:10,320 --> 00:31:13,000 Speaker 2: and talk about carbon intensity, and I think that really 544 00:31:13,080 --> 00:31:15,760 Speaker 2: is is the way to go, and reducing carbon intensity 545 00:31:15,840 --> 00:31:18,280 Speaker 2: must be our purpose. There is no option around that. 546 00:31:19,120 --> 00:31:21,200 Speaker 2: But you know, we are building a number of electrilyizers 547 00:31:21,240 --> 00:31:24,920 Speaker 2: which will produce renewable hydrogen. The challenge with the electrialized 548 00:31:24,960 --> 00:31:29,200 Speaker 2: technology today is a scale and maturity. We're currently building 549 00:31:29,280 --> 00:31:34,240 Speaker 2: electoralizers from almost every conceivable OEM who can provide that technology, 550 00:31:34,280 --> 00:31:36,360 Speaker 2: because we want to test each one of that and see, 551 00:31:36,560 --> 00:31:38,800 Speaker 2: you know, where we can bring our expertise to enhance 552 00:31:38,840 --> 00:31:41,560 Speaker 2: the efficacy and allow for that scale up to happen. 553 00:31:41,880 --> 00:31:43,880 Speaker 2: But I still see that at you know, probably five 554 00:31:44,000 --> 00:31:48,440 Speaker 2: six seven years out to achieve scale maturity. We like 555 00:31:48,480 --> 00:31:51,240 Speaker 2: to run things twenty four to seven. Electrilized technology isn't 556 00:31:51,240 --> 00:31:55,240 Speaker 2: that robust, and it has a challenge around carpal intensity. 557 00:31:55,960 --> 00:31:58,880 Speaker 2: Capital cost for electricizers need to come down by sixty 558 00:31:58,920 --> 00:32:03,760 Speaker 2: to seventy percent for them to be a viable with 559 00:32:03,920 --> 00:32:10,360 Speaker 2: some marginal premium to higher carbon content hydrogen production. And last, 560 00:32:10,360 --> 00:32:12,720 Speaker 2: but not least, we talked about electricity. So you need 561 00:32:12,800 --> 00:32:16,200 Speaker 2: access to low cost renewable energy to be able to 562 00:32:16,280 --> 00:32:21,200 Speaker 2: run these electrolyizers and produce cost effective renewable hydrogen as well. 563 00:32:21,280 --> 00:32:23,560 Speaker 1: Yeah, if you look at the stack of a typical 564 00:32:23,600 --> 00:32:28,920 Speaker 1: green hydrogen project, ten percent capital cost is about electoralizers, 565 00:32:29,400 --> 00:32:32,800 Speaker 1: forty percent is engineering works, and then forty percent is 566 00:32:32,840 --> 00:32:36,160 Speaker 1: electricity that's going to be consumed to be able to 567 00:32:36,200 --> 00:32:40,479 Speaker 1: produce hydrogen. So your capexlessop x has a little more 568 00:32:40,520 --> 00:32:43,080 Speaker 1: than ten percent, but it's it's it's still that's just 569 00:32:43,120 --> 00:32:43,440 Speaker 1: a stack. 570 00:32:43,480 --> 00:32:45,560 Speaker 2: The balance of the plant is really where the challenge is. 571 00:32:45,600 --> 00:32:48,680 Speaker 2: And you know, balance of the plant is where you 572 00:32:48,720 --> 00:32:51,640 Speaker 2: know most of the investment has to happen. 573 00:32:51,840 --> 00:32:54,520 Speaker 1: And it's interesting the examples you did bring up, were 574 00:32:54,600 --> 00:32:59,160 Speaker 1: all methane being converted to hydrogen through carbon capture, which 575 00:32:59,200 --> 00:33:02,479 Speaker 1: is the mature technology that's available now. One question on 576 00:33:02,480 --> 00:33:05,800 Speaker 1: carbon accounting is sort of more future oriented. You do 577 00:33:05,920 --> 00:33:08,040 Speaker 1: have a lot of businesses in the US. There have 578 00:33:08,080 --> 00:33:11,280 Speaker 1: been rollbacks on climate and energy policy in the US. 579 00:33:11,520 --> 00:33:15,040 Speaker 1: You know, one recent rollback that has happened is the 580 00:33:15,120 --> 00:33:19,760 Speaker 1: Environmental Protection Agency has been told to stop measuring greenhouse 581 00:33:19,760 --> 00:33:24,120 Speaker 1: gases or taking greenhouse gas measurements from companies, that kind 582 00:33:24,160 --> 00:33:26,200 Speaker 1: of thing. And I'll just pick that one example just 583 00:33:26,200 --> 00:33:28,520 Speaker 1: to make a point, which is that it can have 584 00:33:28,600 --> 00:33:31,200 Speaker 1: all sorts of downstream impacts that can affect your business. 585 00:33:31,240 --> 00:33:35,960 Speaker 1: So if the greenhouse gas emissions measurements aren't done, the 586 00:33:36,000 --> 00:33:39,640 Speaker 1: carbon capture tax credit that comes from this CEO two 587 00:33:39,680 --> 00:33:43,400 Speaker 1: being sequestered and put into the ground may not be given. 588 00:33:43,440 --> 00:33:45,960 Speaker 1: So how are you dealing with uncertainties? Not just in 589 00:33:46,000 --> 00:33:48,000 Speaker 1: the US, it's happening now there, but you know you 590 00:33:48,120 --> 00:33:51,200 Speaker 1: work in so many countries around the world. Policies changed 591 00:33:51,240 --> 00:33:54,280 Speaker 1: left and right. What's your way of dealing with these 592 00:33:54,480 --> 00:33:56,920 Speaker 1: sorts of changes as. 593 00:33:56,720 --> 00:34:00,720 Speaker 2: We think about projects today in the cycle And I 594 00:34:00,760 --> 00:34:02,840 Speaker 2: think you know a good example of that was the 595 00:34:02,960 --> 00:34:06,480 Speaker 2: Hydrogen Council providing that that input. That five hundred odd 596 00:34:06,520 --> 00:34:10,000 Speaker 2: project's gone to FID and you know, looking to either 597 00:34:10,080 --> 00:34:14,200 Speaker 2: getting constructed or in commissioning or in operations. Many of 598 00:34:14,239 --> 00:34:20,560 Speaker 2: those were banking on you know, regulatory frameworks or incentives 599 00:34:20,600 --> 00:34:23,719 Speaker 2: or subsidies, and I think it's you know, one of 600 00:34:23,719 --> 00:34:25,840 Speaker 2: the things that the report also does is creates a 601 00:34:25,840 --> 00:34:29,839 Speaker 2: call to action, asking regulators to look at how they 602 00:34:29,840 --> 00:34:35,320 Speaker 2: can provide stability and consistency of policy to help move 603 00:34:35,400 --> 00:34:37,600 Speaker 2: these projects in the right direction. There is a call 604 00:34:37,640 --> 00:34:41,040 Speaker 2: to action both for governments as well as for corporations 605 00:34:41,080 --> 00:34:44,600 Speaker 2: and advocacy groups to make sure that that urgency is 606 00:34:44,719 --> 00:34:48,160 Speaker 2: well understood. But five hundred projects did move forward, and 607 00:34:48,200 --> 00:34:50,680 Speaker 2: that's an important testament. So I would say to you 608 00:34:50,719 --> 00:34:53,880 Speaker 2: what we're seeing in the market today reflecting that is 609 00:34:54,680 --> 00:34:57,760 Speaker 2: projects of you know, high quality projects which are underpinned 610 00:34:57,760 --> 00:35:02,600 Speaker 2: by sound economics and usually off takes continue to develop today, 611 00:35:03,160 --> 00:35:08,200 Speaker 2: and they are reflecting that by putting money in feasibility studies, 612 00:35:08,239 --> 00:35:10,680 Speaker 2: pre feed studies, feed studies. All of these cost money, 613 00:35:10,719 --> 00:35:13,520 Speaker 2: right because these are billion multiple billion dollar projects, so 614 00:35:13,920 --> 00:35:16,520 Speaker 2: you have to have that investment happen. People are making 615 00:35:16,520 --> 00:35:19,919 Speaker 2: those investments. That's what gives me the confidence to say 616 00:35:19,960 --> 00:35:24,200 Speaker 2: that my expectation remains at sound economics and good quality 617 00:35:24,239 --> 00:35:26,799 Speaker 2: projects with continue to see the light of day and 618 00:35:26,840 --> 00:35:29,239 Speaker 2: will move to a FID as we move forward as well. 619 00:35:29,280 --> 00:35:31,760 Speaker 2: So I think that's that's an important pace. One hundred billion, 620 00:35:31,920 --> 00:35:35,040 Speaker 2: one hundred and ten billion precisely of investments in five 621 00:35:35,120 --> 00:35:37,719 Speaker 2: hundred projects over the last four or five years is 622 00:35:37,760 --> 00:35:40,799 Speaker 2: a pretty tremendous number. I think we're never satisfied. I 623 00:35:40,840 --> 00:35:42,880 Speaker 2: have to agree with you. I'd like to see more, 624 00:35:43,440 --> 00:35:46,439 Speaker 2: but the reality is that's a good base on which 625 00:35:46,520 --> 00:35:49,440 Speaker 2: to start the process. That's about I think about six 626 00:35:49,520 --> 00:35:53,759 Speaker 2: million tons maybe one million already in operation, about five 627 00:35:53,920 --> 00:35:56,640 Speaker 2: five and a half coming on top of that. So 628 00:35:56,640 --> 00:36:00,000 Speaker 2: again I think the study provides some really good valid 629 00:36:00,440 --> 00:36:03,480 Speaker 2: as to how we're moving behind, you know, beyond that 630 00:36:03,680 --> 00:36:07,320 Speaker 2: hype cycle we saw initially, to a more mature model 631 00:36:07,320 --> 00:36:10,719 Speaker 2: around this development, and I think there is a little 632 00:36:10,760 --> 00:36:14,160 Speaker 2: bit more of policy certainty would provide a greater impetus. 633 00:36:14,239 --> 00:36:17,280 Speaker 2: And again the study says that we have a potential 634 00:36:17,320 --> 00:36:20,360 Speaker 2: of unlocking another thirty million tons of hydrogen if we 635 00:36:20,440 --> 00:36:23,200 Speaker 2: get that consistency to come through, And I think that's 636 00:36:23,320 --> 00:36:26,640 Speaker 2: that's a good analysis that the Hydrogen Council has done. 637 00:36:26,880 --> 00:36:28,480 Speaker 1: Now let me go back to the start of our 638 00:36:28,520 --> 00:36:32,440 Speaker 1: conversation and to say that you know, as you explain, 639 00:36:32,760 --> 00:36:37,120 Speaker 1: Linda provides gases to real world projects and to the 640 00:36:37,120 --> 00:36:41,200 Speaker 1: real economy, and so the way Linda proceeds in its 641 00:36:41,360 --> 00:36:44,680 Speaker 1: climate plan is a way to look at how the 642 00:36:44,719 --> 00:36:48,440 Speaker 1: real economy is going to be moving on its climate targets. 643 00:36:48,719 --> 00:36:50,920 Speaker 1: You know, it's a company that does so much but 644 00:36:51,120 --> 00:36:56,040 Speaker 1: isn't always known to people because of the customers you 645 00:36:56,080 --> 00:36:59,680 Speaker 1: have typically which is industry and not consumers. But thank 646 00:36:59,680 --> 00:37:02,120 Speaker 1: you so much for throwing light on the work you do, 647 00:37:02,640 --> 00:37:03,760 Speaker 1: and thanks for this conversation. 648 00:37:04,280 --> 00:37:08,479 Speaker 2: Pleasure Roger, thank you, and. 649 00:37:08,400 --> 00:37:10,719 Speaker 1: Thank you for listening to Zero. And now for the 650 00:37:10,800 --> 00:37:22,840 Speaker 1: sound of the week. That is the familiar sound of 651 00:37:22,960 --> 00:37:26,760 Speaker 1: coffee being ground. Coffee beans recently hit a record price, 652 00:37:27,000 --> 00:37:30,160 Speaker 1: partly due to US tariffs, but also because of persistent 653 00:37:30,239 --> 00:37:33,040 Speaker 1: drought in Brazil, which produces about forty percent of the 654 00:37:33,040 --> 00:37:36,040 Speaker 1: world's coffee. If you like this episode, please take a 655 00:37:36,040 --> 00:37:38,200 Speaker 1: moment to rate and review the show on Apple Podcasts 656 00:37:38,200 --> 00:37:41,120 Speaker 1: and Spotify. Share this episode with a friend or with 657 00:37:41,239 --> 00:37:45,239 Speaker 1: someone who produces industrial amounts of gas. This episode was 658 00:37:45,239 --> 00:37:47,920 Speaker 1: produced by Oscar boy. Our theme music is composed by 659 00:37:47,920 --> 00:37:52,120 Speaker 1: Wonderly Special Thanks to Soamersadi Moses Andim Laura Milan and 660 00:37:52,160 --> 00:37:54,839 Speaker 1: Sharon chen i'm Akshatrati back soon.