Linde PLC is a heavyweight in the industrial world. This company supplies industrial gases to places like fertilizer plants, steel mills, glassworks, and oil refineries. However, Linde is also responsible for releasing 38 million tons of carbon dioxide into the air every year.
Under the leadership of Sanjiv Lamba, who has been running the company from Danbury, Connecticut for the past two years, Linde is working hard to clean up its act. Lamba is committed to making Linde’s operations carbon-neutral eventually. He proudly shares that for every pound of greenhouse gas Linde emits, their products and expertise help customers avoid more than twice that amount in their emissions. Linde is also investing $2 billion in a hydrogen plant in Beaumont, Texas, where they plan to store carbon dioxide underground.
Linde believes that hydrogen energy is the future, and they are ready to lead the charge. When trucks, buses, and ships need hydrogen fuel, Linde will be prepared. They have the expertise to handle gas under high pressure—up to 10,000 pounds per square inch.
But when will the world turn green? It’s a matter of time, says Lamba. He emphasizes that while Linde is committed to environmental goals, they must also meet financial targets. The clean energy industry has faced challenges recently, with investments losing value and some companies struggling. Despite this, Linde remains a strong performer, earning $6.2 billion last year on $33 billion in revenue.
Lamba, who began his career in finance in India, talks a lot about numbers, from profit margins to chemical formulas. The International Energy Agency predicts a 420-fold increase in low-emission hydrogen sources by 2050, and Linde is preparing for that future.
There are two main ways to produce hydrogen. One involves using electricity to split water into hydrogen and oxygen. This method is popular with environmentalists if the electricity comes from renewable sources like solar or wind. The other method, which Linde primarily uses, involves heating methane with steam. This process emits ten pounds of carbon dioxide for every pound of hydrogen produced.
Producing hydrogen from methane costs just over $1 per kilogram. If Linde captures and stores the resulting carbon dioxide, the cost doubles, but a federal subsidy can bring it down to around $1.10 per kilogram. This cleaner hydrogen can fetch a higher price from industries that want to showcase their green efforts.
On the other hand, hydrogen made from renewable electricity is much more expensive, costing between $5 and $8 per kilogram. Even with a $3 federal credit, it’s still not economical. The main issue is the high initial investment required.
Electrolyzers, which are used to split water, take up a lot of space—five times more land than a methane-based hydrogen plant with carbon capture, or 500 times more if powered by solar panels. Linde is investing in advanced electrolyzers but doesn’t expect them to be cost-competitive for another five to seven years.
Linde is realistic about the challenges of producing green hydrogen. Diverting electricity to make hydrogen might mean building more power plants, which could end up using fossil fuels and defeating the purpose. Lamba acknowledges that they will be competing for electricity with other high-demand sectors like AI data centers.
The dream of affordable, renewable hydrogen has been around for a long time. Back in 2005, the U.S. government predicted that by 2015, hydrogen would cost $2.75 per kilogram. That target remains out of reach. Linde is wisely cautious, partnering with ITM Power, a British company specializing in cutting-edge electrolyzers, to stay at the forefront of hydrogen technology.
Linde has a long history of innovation. It was founded in the late 19th century by German engineer Carl von Linde, who developed a method to liquefy air and separate its components. This technology paved the way for many industrial applications, from welding to fertilizer production.
Today, Linde continues to innovate, producing gases for a wide range of industries, including electronics and food processing. They have a team of 435 Ph.D. researchers and a $3.6 billion backlog of custom engineering contracts. Despite the challenges, Linde remains committed to its environmental goals while ensuring financial stability.
Linde’s main competitor, Air Products & Chemicals, shares similar environmental aspirations and is also investing heavily in green hydrogen. However, Wall Street favors Linde, with its stock outperforming Air Products’ since their 2018 merger.
Lamba’s plan includes gradually increasing Linde’s operating margin while contributing to the global goal of achieving net-zero emissions by 2050. The journey to a green future is long, but Linde is determined to lead the way without losing sight of financial sustainability.
