The World’s Biggest Consumers of Electricity Are Hidden in Plain Sight

Article content

“The fact that we are a large consumer of electricity is in some ways a good thing,” he said. “It gives us the leverage that we need to push to see how renewable energy can become a larger part of the portfolio of energy that we consume.”

Article content

In its 2024 sustainability report, Linde says it secures 47% of its electricity from low-carbon sources. However, only about 14% of its electricity can be reliably sourced back to renewables. The rest of its estimate is based on analyzing the carbon intensity of the grids its operations are connected to and buying renewable energy credits (RECs) or environmental attribute certificates (EACs). Neither leads to emissions reductions, according to experts. 

Article content

“We have never been fans of credits or attribute certificates,” said Lamba. It’s why Linde has doubled its direct purchase of renewable power in the last four years, he added.

Article content

Action Speaks Louder analysis concludes that Linde’s emissions reports use “opaque methodology” that makes it “impossible to verify the full extent of the company’s climate impact.” The company has nearly 600 subsidiaries around the world.

Article content

Article content

“Our reports have been scrutinized,” said Lamba. “We’ve gone through audit processes for over 10 to 12 years.”

Article content

Air Products has the most ambitious renewable targets among the three major industrial gases companies. It aims to increase the share of renewables in its power mix from 23% in 2023 to more than 90% by 2030. However, the Action Speaks Louder report says that the company’s disclosures are poor. For example, it’s not possible to say how much of Air Products’ renewable electricity is directly sourced and how much comes from RECs or EACs.

Article content

“As part of our disclosure strategy, Air Products regularly monitors best practices in the market for disclosure on sustainability-related information,” said Art George, the company’s spokesperson. “We are currently revising our reporting methodology with additional details to come in next year’s report.”

Article content

Air Liquide’s goals score a little better than Linde but worse than Air Products, with a commitment to reach net-zero emissions by 2050 alongside a renewable energy goal for 2035. It also says it has electrified more than 90% of its air-separation units, which can lower energy consumption and improve operational efficiency. Non-electric ASUs rely on natural gas or other fuels to generate steam that they use to run their compressors. 

Article content

Article content

However, Harding-Rolls also found that Air Liquide subsidiaries’ emissions and energy-use reporting is strongly lacking in transparency and details. The company also relies heavily on the use of RECs.

Article content

“Where markets offer favorable conditions, direct electricity purchase (PPAs) may be complemented with unbundled attributes,” Air Liquide spokesperson said in a statement. “In 2024, unbundled certificates represented only 18% of our total voluntary electricity sourcing.”

Article content

The pressure on industrial gases suppliers is growing. Share Action, another green campaign group, published a report in April that concluded these companies “lack robust strategies to transition to renewable energy.” Crucially, with renewables getting cheaper and electricity offering efficiency gains, Share Action argues that these companies are failing to lower their energy cost and thus reducing shareholder returns.

Article content

At Linde’s annual general meeting this year, Share Action sent a letter that 22 investors with $2.1 trillion of assets under management signed calling on the company to align its activities with the goals of the Paris Agreement. In 2023, Share Action organized a similar letter for Air Liquide.

Article content

Attempts by investors to reduce the emissions of industrial gas companies haven’t always worked. It is why Alix Roy, an analyst with Ecofi and Air Liquide investor, said she has asked the company’s board to respond Ecofi’s concerns about the company’s plans to reduce emissions from energy use.

Article content

“We have tried to escalate as much as possible, but so far it has proven inconclusive,” she said.

Article content

—With assistance from Jade Khatib.

Article content