Air Products Cancels Louisiana Clean Energy Project, Takes Up to $2.9 Billion Charge
Air Products has canceled its Louisiana Clean Energy Complex after determining the project no longer met financial return targets, a decision expected to result in up to a $2.9 billion pre-tax charge.
(P&GJ) — Air Products will not move forward with its Louisiana Clean Energy Complex (LCEC), saying the project no longer meets the company's financial return requirements. The decision is expected to result in a pre-tax charge of up to $2.9 billion in the company's fiscal third quarter.
The charge primarily reflects asset write-downs and the termination of contractual commitments associated with the Louisiana project.
In addition to canceling the LCEC project, Air Products said it will discontinue development of a zero-carbon liquid hydrogen facility in Casa Grande, Ariz., along with several smaller clean energy distribution projects. The company cited challenging market conditions, project economics and slower-than-expected growth in hydrogen mobility markets.
Air Products said it will seek to redeploy equipment and other assets from the canceled projects where possible.
Despite the decision, the company said it remains committed to its Louisiana operations, where it operates 18 industrial gas facilities and the world's largest hydrogen pipeline network serving refinery customers along the U.S. Gulf Coast.
Separately, Air Products said it is finalizing a marketing and distribution agreement with Yara International for renewable ammonia produced at the NEOM Green Hydrogen Project in Saudi Arabia.
Under the agreement, Yara will market and distribute renewable ammonia produced at the NEOM facility through its global supply chain. Air Products said the agreement is independent of its decision to cancel the Louisiana project.
Environmental Group Claims Community Opposition Influenced Project Decision
Environmental group Earthworks, which had opposed the Louisiana Clean Energy Complex and its associated carbon capture infrastructure, said the project's cancellation followed years of organizing by residents in Louisiana's River Parishes and around Lake Maurepas. The group argued that sustained public opposition played a role in Air Products' decision, although the company said it canceled the project because it no longer met its financial return criteria.
Earthworks cited concerns raised by residents over the proposed carbon dioxide pipeline, the project's proximity to schools, carbon storage beneath Lake Maurepas and the use of carbon capture technology.
Kaitlyn Joshua, an Earthworks organizer based in Louisiana's River Parishes, said the cancellation validated years of community organizing.
"The work that we've been doing for years has merit. ... It does mean that these industries are hearing our plea and understanding that folks are concerned about the impacts of carbon capture and storage and what CO2 pipelines could mean for the communities that they love."