In our quest to hold companies to account for global heating, no stone has been left unturned. So it’s very rare that you come across a massive sector responsible for country-scale emissions that is knitted into the very fabric of modern industry, and has the potential to shift gears quickly.
Our collective attention is understandably and easily pulled onto big ticket sectors which sell directly to consumers, like fashion, food, plastics and airlines – or big industries one step removed – like steel, petrochemicals, and oil and gas. While we do important work on these sectors, it means it’s easy for business-to-business industries to fly under the radar and avoid scrutiny, even if the solutions to decarbonise exist at scale and are relatively straightforward to plug-and-play.
ASL’s secret sauce for sector selection (try saying that with a mouthful of biscuits) is the way we identify sectors to campaign on: a sort of bingo-card we’ve developed over the years and with much research and consultation to figure out where our work will be most effective. This allows us to look beyond the shiny, tempting sectors which are important but get a lot of air time, and reveal the hidden emitters in their midst which could – with a little pressure – lead to rapid scaling of additional wind and solar energy.
Enter industrial gases – an innocuous sounding sector that is responsible for at least 1 gigaton of emissions per year, around the same amount as Japan. Here’s the kicker: this sector produces the majority of its emissions from thin air. How is that possible?
Unless you’re an industry expert, you would be forgiven for not knowing about the vital importance of gases to modern industry. We’re not talking about fossil gas here, used for energy and petrochemicals, but gases like oxygen, carbon dioxide, nitrogen, hydrogen and argon used for a whole range of industrial purposes and produced by a small handful of mighty-mega-corporations. Whether it’s carbon dioxide for fizzy drinks and food packaging, oxygen for hospitals and steelmaking blast furnaces, nitrogen for semiconductor manufacturing and food freezing, hydrogen for oil refining and the energy system, or argon for welding. Many of these gases come from the air around us – sucked from the atmosphere and compressed with powerful turbines – and some are made from fossil fuels, like hydrogen largely made from cooking fossil gas with steam.
So why is the industry such a heavy emitter?
The industry’s large emissions stem broadly from two sources:
- The country-sized amounts of energy required to compress and distill ambient air into usable concentrations of elements like oxygen and nitrogen. Because, while air is everywhere, to extract pure oxygen or nitrogen, companies have to compress massive volumes of air, cool it to extremely low temperatures, and distill it in large industrial plants called air separation units (ASUs). Some ASUs can produce thousands of tonnes of oxygen a day, for example for steel blast furnaces, which rely on pure oxygen to burn hotter. Most of these ASU plants run on electricity which comes from the grid and still rely heavily on fossil fuels for generation (scope 2 emissions), and many still burn fossil fuels directly for steam power.
- Large direct emissions (scope 1) also come from producing hydrogen by cooking fossil gas. Although hydrogen can be made from renewable energy, most of it today is made from gas or even coal. This process requires substantial heat, which is typically supplied by burning fossil fuels, leading to direct CO2 emissions from the combustion process.
Why have we chosen this niche sector to work on?
The term “low-hanging fruit” gets thrown around a lot in climate circles. Most of the time the low hanging fruit in question is more like an unripe and poisonous shell-encased nut hanging 20 ft up a tree. And the tree is covered in thorns. But in the case of industrial gases, the fruit is truly low hanging, and very much edible. There is very little stopping industrial gas companies – some of the most profitable companies in the world – switching from fossil based electricity generation to additional renewables today.
In turn, as significant electricity users, the actions of companies and industrial gas giants can heavily influence the power sector. By using their massive buying power, industrial gas companies can accelerate global grid decarbonisation, boost renewable energy supply through increased demand, drive investment in storage technologies, and pressure policymakers to decarbonise electricity grids. We firmly believe industrial gas companies – Linde, Air Liquide and Air Products – can be a power boost for the energy transition, rather than dragging their heels.
Who are we focusing on?
Linde PLC is the largest of the industrial gas giants with $33 billion in sales in 2024. Despite being the largest, our latest report found it to be less ambitious than its chief competitor, Air Liquide, in terms of climate and renewable energy. This is even more surprising as Linde’s ESG ratings — a metric that measures companies’ environmental and social impact — are higher than Air Liquide’s.
Beyond being the largest among the industrial gas industry, Linde also stands out for its massive energy consumption across sectors. It is the Carbon Disclosure Project’s largest reported corporate electricity user. It’s also the largest corporate electricity user in the Morgan Stanley Capital International (MSCI) benchmarks for developed markets, consuming a reported 41.6 million MWh — or equivalent generation of 30 coal-fired power stations — per year.
However, despite consuming enormous amounts of electricity, when we scrutinized its renewable energy, we found that it is lagging far behind other large-scale energy users. For one, only 6.2% of its total energy meets the highest standards of procurement and additionality criteria — which means that most of the energy it uses either isn’t renewable, isn’t traceably procured, or doesn’t contribute to expanding renewable energy infrastructure. So while this massive energy user draws country-sized amounts of energy from the grid to make its gases, it’s barely contributing to ensuring those grids are decarbonized and weaned off climate-damaging fossil fuels.
What can you do about it?
Firstly, well done on making it this far. This is so deep in the weeds of heavy industry decarbonization that few in the climate space are even aware of the sector.
But now the question is: how can we change this? Talking about industrial gases and the inaction of giants like Linde is a crucial first step, and one where everyone has a role to play. The more everyone – experts and climate advocates but also citizens like you — talks about it, the more pressure we create for these companies to take real action and stop hiding behind a veil of thin air.
You can start by learning more about the sector (you can read our latest investigation Hidden Giants: The invisible climate costs of industrial gases if you’d like to get technical), read about Linde, and stay connected with us through our social channels and newsletter for campaign updates.
