Pennsylvania-based Air Products announced Tuesday that it is scrapping its plans to develop the $4.5 billion Louisiana Clean Energy Complex in Ascension Parish.
The company also announced it would record up to $2.9 billion in pre-tax charges in the third quarter.
Air Products says its decision not to move forward with the project is based on expected financial returns not meeting stringent return criteria.
“As a responsible corporate citizen, we are committed to exiting this project properly,” the company wrote on its website. “That includes responsibly and ethically winding down activities and fulfilling outstanding contractual obligations at the proposed plant site in Ascension Parish, at Lake Maurepas and surrounding area, and pipeline rights-of-way. We will also close out our regulatory/permitting processes and partnerships related to the project, as well as work collaboratively with Parish staff, emergency responders, contractors and other parties during this time.”
The move is the latest setback in the push to develop hydrogen as a clean fuel in the US after the Trump administration slashed a tax credit for the gas, according to Bloomberg. It’s also another blow for carbon capture and sequestration, which the oil and natural gas industry has long promoted as key to fighting global warming.
The LCEC project was first announced by Air Products in 2021, representing the company’s largest U.S. investment. It was billed as one of the largest carbon dioxide [CO2] capture projects in the world, producing 750 million standard cubic feet per day of blue, or “low-carbon,” hydrogen that would be stored underground, including beneath Lake Maurepas, rather than released into the atmosphere.
Air Products also announced Tuesday that it is finalizing a marketing and distribution agreement with Yara for renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia. The agreement is independent of Tuesday’s decision to discontinue the Ascension Parish project, according to Air Products. It is expected to enable ammonia from the world’s first large-scale renewable ammonia plant to be sold and delivered worldwide by Yara’s global supply chain.
