Air Products Exits Three Major Chemical Projects with $3.1 Billion Write-Down

Air Products recently announced its decision to withdraw from three chemical projects in the United States, expecting to record a $3.1 billion pre-tax charge in its second-quarter financial results. This write-down will cover asset impairments and contract terminations as part of a review initiated by the company's newly elected board and CEO.

The three projects being shelved include:

First, Air Products has terminated its agreement with World Energy for the sustainable aviation fuel expansion project in Paramount, California, citing challenges related to project expansion and current operations.

Second, the company has canceled plans to build a 35-ton-per-day green liquid hydrogen plant in Massena, New York, along with the associated liquid hydrogen distribution business. This decision stems from the existing hydroelectric supply not qualifying for clean hydrogen production tax credits and the slower-than-anticipated development of the hydrogen market in the region.

Third, due to poor economic viability, Air Products has also opted to end its carbon monoxide production project in Texas.

New CEO Eduardo Menezes stated, “The exit from these three projects will reduce backlog and allow us to focus resources on initiatives that create value for shareholders.”

Air Products plans to continue evaluating its backlog of projects but currently does not anticipate canceling any other significant initiatives. During its next earnings call, the company will provide updates on its two largest ongoing projects:

The NEOM Green Hydrogen Project in Saudi Arabia, which is nearing 80% completion and is expected to commence production by the end of 2026.

The Clean Energy Complex in Louisiana, which is progressing smoothly and is expected to launch in 2028. The company is actively discussing partnerships for ammonia recycling and carbon dioxide sequestration to reduce capital expenditures for this project.

With over 80 years of experience, Air Products is a global leader in industrial gases, operating in approximately 50 countries and generating around $12.1 billion in sales for fiscal year 2024.