The industrial gases sector is a major emissions-intensive industry operating under the radar, unscrutinized from a climate perspective, and holding back the energy transition with its lack of renewable energy procurement. The sector is dominated by just a few players and provides precursor materials to chemicals, energy, healthcare, food and beverage, electronics, pharmaceuticals, waste management, metallurgy and aerospace.
The industry’s main products are oxygen and nitrogen — drawn from the atmosphere and compressed with powerful turbines — and hydrogen, largely made from combusting gas with steam (SMR). Production of these gases is staggeringly energy-intensive. Linde plc, a $33bn industrial gas giant and the primary subject of our investigation, consumed the equivalent generation of 30 coal-fired power stations per year in electricity — more electricity than Denmark and Ireland — and is the Carbon Disclosure Project’s largest corporate electricity user. It’s perhaps the biggest energy user most people have never heard of.
Our investigation found serious concerns with Linde’s emissions reporting and accountability, suggesting their already large Scope 2 emissions (bigger than BP and Shell) may be significantly higher than reported, with evidence suggesting it may be even double. They appear to relegate large portions of emissions, such as for joint ventures and some contracts, to Scope 3 reporting categories and away from accountability.
The company claims to be addressing massive electricity use through renewable energy certificates and power purchase agreements. Our detailed analysis shows RE purchases that meet quality criteria on additionality amount to just 6.2% of Linde’s total energy consumption. Only 14% of Linde’s reported low carbon energy is actively sourced wind and solar, the remainder is existing passive grid supply, and a large portion is nuclear energy certificates. Furthermore, they repeatedly claim that avoided emissions from their products more than cancel out their own footprint — but our analysis found up to 70% of this claim to be highly misleading and unsubstantiated.
If this hidden gas giant were to clean up their energy supply, it could be a game-changer for increasing new and additional renewable energy globally.
