Air Products and Eneco Sign Power Purchase Agreement for Solar Electricity in The Netherlands

Rhea-AI Summary

Air Products signs a 10-year Power Purchase Agreement with Eneco for renewable energy in The Netherlands, reducing emissions equivalent to 45,000 households.

Insights

Environmental Sustainability Expert

The Power Purchase Agreement (PPA) between Air Products and Eneco represents a significant strategic move within the industrial gases sector, highlighting an increasing trend of companies prioritizing sustainability and renewable energy sourcing. The decision to source the majority of Air Products' merchant business energy consumption from renewable sources, specifically from the Vlagtwedde Solar PV farm, not only aligns with global efforts to reduce carbon emissions but also sets a precedent for other companies within the industry.

From an environmental perspective, the reduction of emissions equivalent to the carbon footprint of approximately 45,000 households is a substantial achievement. This commitment by Air Products can be seen as part of a broader corporate social responsibility strategy, which could enhance its brand reputation and potentially attract sustainability-focused investors. The long-term nature of this 10-year contract indicates a stable and forward-thinking approach to energy procurement, which could contribute positively to the company's operational stability and predictability of energy costs.

Energy Sector Analyst

The PPA with Eneco allows Air Products to lock in a source of renewable energy for a significant portion of its operations, which could serve as a hedge against future energy price volatility. By committing to a 10-year contract, Air Products is likely to benefit from fixed pricing for the electricity sourced from the Vlagtwedde Solar PV farm, providing financial predictability and potentially improved margins if traditional energy prices rise.

Moreover, the move towards renewable energy is in line with the European Union's aggressive targets for reducing greenhouse gas emissions. Companies that proactively shift to renewable energy sources may be better positioned to comply with future regulations and could benefit from government incentives. This strategic alignment with policy trends could provide Air Products with a competitive advantage in regions with stringent environmental standards.

Investment Risk Analyst

Investors often assess the sustainability practices of a company as part of their risk management strategy. Air Products' investment in renewable energy through the PPA demonstrates a commitment to reducing its environmental impact, which can be seen as mitigating regulatory and reputational risks associated with climate change. As the industrial gases sector is energy-intensive, this move may also resonate positively with investors concerned about long-term sustainability and the transition to a low-carbon economy.

However, there are potential risks associated with the reliance on a single renewable energy source, such as the Vlagtwedde Solar PV farm. Any disruptions in production could affect Air Products' operations. Diversifying energy sourcing or having contingency plans in place would be crucial to mitigate such risks. Investors will likely monitor the implementation of this PPA and its actual impact on Air Products' carbon footprint reduction and financial performance.

ROTTERDAM, Netherlands, Feb. 12, 2024 /PRNewswire/ -- Air Products, a world-leading industrial gases company, is proud to announce a significant step forward in its commitment to sustainability through the signing of a Power Purchase Agreement (PPA) for renewable energy with Eneco. This strategic agreement reaffirms Air Products' dedication to help address climate impacts and sourcing a substantial portion of its energy needs in The Netherlands from renewable sources.

Under the terms of this 10-year PPA, Air Products will source the majority of its current merchant business energy consumption for liquid nitrogen and oxygen production in The Netherlands from a reliable and renewable energy source. The renewable electricity will be generated at the Vlagtwedde Solar PV farm in the northeast of The Netherlands. The signed PPA will enable Air Products to reduce emissions equivalent to the carbon footprint of approximately 45,000 households over the duration of the contract.

This commitment represents an important milestone in the company's ongoing efforts to reduce its carbon footprint in The Netherlands and contribute to a more sustainable future. Last year, the company announced its plans to build Europe's largest blue hydrogen facility based in the Port of Rotterdam. This was preceded by the announcements of Air Products' plans for a renewable energy import terminal, and the first Rotterdam green hydrogen truck refuelling station. The 10-year contract reflects Air Products' long-term vision to work to accelerate the energy transition and continue to work to generate a cleaner future.

"This 10-year PPA is a significant milestone in our journey towards sustainability," said Harco van den Berg, Air Products' Business Manager Benelux. "We are excited to partner with Eneco, and we believe this collaboration will contribute to our goals of decarbonizing the industrial gases sector."

Eneco B2B Director Dick Velings added, "To tackle the challenge of climate neutrality, we need significantly more sustainably generated power. With this agreement, Air Products commits to using greener energy. This allows Air Products to become more sustainable and help their customers in many sectors do so as well. We're excited to work with Air Products in this effort."

About Air Products

Air Products (NYSE:APD) is a world-leading industrial gases company in operation for over 80 years focused on serving energy, environmental, and emerging markets. The Company has two growth pillars driven by sustainability. Air Products' base business provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, and food. The Company also develops, engineers, builds, owns and operates some of the world's largest clean hydrogen projects supporting the transition to low- and zero-carbon energy in the heavy-duty transportation and industrial sectors. Additionally, Air Products is the world leader in the supply of liquefied natural gas process technology and equipment, and provides turbomachinery, membrane systems and cryogenic containers globally.

The Company had fiscal 2023 sales of $12.6 billion from operations in approximately 50 countries and has a current market capitalization of about $60 billion. Approximately 23,000 passionate, talented and committed employees from diverse backgrounds are driven by Air Products' higher purpose to create innovative solutions that benefit the environment, enhance sustainability and reimagine what's possible to address the challenges facing customers, communities, and the world. For more information, visit www.airproducts.com or follow us on LinkedIn, X, Facebook or Instagram.

This release contains "forward-looking statements" within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's expectations and assumptions as of the date of this release and are not guarantees of future performance. While forward-looking statements are made in good faith and based on assumptions, expectations and projections that management believes are reasonable based on currently available information, actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including the risk factors described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and other factors disclosed in our filings with the Securities and Exchange Commission. Except as required by law, we disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in the assumptions, beliefs or expectations or any change in events, conditions or circumstances upon which any such forward-looking statements are based.

View original content:https://www.prnewswire.com/news-releases/air-products-and-eneco-sign-power-purchase-agreement-for-solar-electricity-in-the-netherlands-302059620.html

SOURCE Air Products

FAQ

What is the significance of the Power Purchase Agreement (PPA) signed by Air Products with Eneco?

The PPA signifies a major step towards sustainability for Air Products by sourcing renewable energy for its operations in The Netherlands, reducing emissions significantly.

Where will Air Products source the majority of its current merchant business energy consumption for liquid nitrogen and oxygen production in The Netherlands from?

Air Products will source its energy needs from the Vlagtwedde Solar PV farm in the northeast of The Netherlands under the 10-year PPA with Eneco.

How does the signed PPA contribute to reducing Air Products' carbon footprint in The Netherlands?

The PPA will enable Air Products to reduce emissions equivalent to the carbon footprint of approximately 45,000 households over the duration of the contract, showcasing a significant environmental impact.

What is Air Products' long-term vision reflected in the 10-year PPA with Eneco?

The PPA reflects Air Products' commitment to accelerating the energy transition and working towards a cleaner future by sourcing renewable energy for its operations.

Who are the key individuals from Air Products and Eneco mentioned in the press release regarding the PPA?

Harco van den Berg, Air Products' Business Manager Benelux, and Dick Velings, Eneco B2B Director, are highlighted in the PR for their roles in the partnership.