What are industrial gases, and why do we need them?
Industrial gas is an umbrella term for pure-state gases like oxygen, nitrogen, hydrogen and rare gases like argon or xenon. The majority of manufacturing processes rely on industrial gases from healthcare to fertiliser, food packaging to steel production, and even semiconductors and double glazing.
Who makes industrial gas and how does that affect the climate?
The largest industrial gas companies, Air Liquide and Linde, are some of the most valuable companies in the world and they are predicted to grow by 5% per year. These companies also make a significant contribution to the climate crisis with value chain greenhouse gas emissions equivalent to over 15 coal-fired power stations each, from purchased goods and services to customers using the gases.
A large share of these emissions comes from the energy required to distil the air around us into its constituent parts. The industrial gas producers Linde and Air Liquide consume more electricity than countries like Nigeria, Bulgaria, Denmark and Ireland. When these companies get their electricity from burning highly polluting fossil fuels, this inflicts significant damage to the climate.
What are responsible investors asking for?
These companies and the gases they produce can play an important role in maintaining a safe, liveable climate. Unlike many other heavy industries, the production processes of industrial gas producers can be electrified and run on renewable energy, reducing much of their carbon footprint.
That’s why ShareAction is supporting its Chemical Decarbonisation Investor Coalition to engage with the industrial gas companies they invest in. Responsible investors want to see these companies transition to net zero in line with the goals of the Paris Agreement. They are asking companies to set science-based emission reduction targets, set targets to source 100% of their electricity from renewable energy and electrify their production processes. These investors are encouraging investee companies to take responsibility for their emissions whilst taking full advantage of the commercial opportunities offered by the transition to an emission-neutral world.
