Air Products abandons $4.5bn Louisiana hydrogen project, takes $2.9bn write-down

Air Products and Chemicals Inc. has scrapped its Louisiana Clean Energy Complex, a planned multibillion-dollar hydrogen and carbon capture project, citing financial returns that failed to meet its internal criteria. The company will record a pretax charge of up to $2.9 billion in its fiscal third quarter tied to the cancellation of the Louisiana project and other clean energy initiatives. Air Products also confirmed it is discontinuing a zero-carbon liquid hydrogen facility in Casa Grande, Arizona, along with smaller clean energy distribution projects. The decision reflects “challenging commercial conditions,” project-specific economic factors, and slower-than-expected hydrogen mobility market development, the company stated. The Louisiana project, first announced in 2021, was envisioned as Air Products’ largest-ever U.S. investment at an expected cost of $4.5 billion. It aimed to produce 750 million cubic feet of blue hydrogen annually using natural gas with carbon capture technology. The project was slated to begin operations in 2026. The cancellation follows broader setbacks in the U.S. hydrogen sector, exacerbated by reduced government support under the Trump administration, which rolled back key tax credits for hydrogen production. Analysts and industry observers point to weak demand, high costs, and a lack of federal climate policy as major obstacles. Joseph Majkut, director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies, described the move as a symptom of “reduced government support for the industry long term” and questioned the future of hydrogen projects in the United States amid “no federal climate policy and a more challenging fiscal picture.” Air Products, ranked No. 72 on the Transport Topics Top 100 list of North America’s largest private carriers, had positioned the Louisiana complex as a cornerstone of its clean energy strategy. The cancellation also comes after the ouster of Seifi Ghasemi, the CEO who had overseen the project. The retreat from hydrogen mirrors global trends, with similar projects being scaled back or abandoned worldwide due to economic and demand challenges. Air Products emphasized that the exits are driven by “project-specific economic factors” and slower-than-expected development in hydrogen mobility markets.