Industrial gases company Air Products on Feb. 24 said it plans to back out of three U.S.-based projects and write down assets, expecting to record a pre-tax charge of up to $3.1 billion in 2025. (Source: Air Products)
Industrial gases company Air Products on Feb. 24 said it plans to back out of three U.S.-based projects and write down assets, expecting to record a pre-tax charge of up to $3.1 billion in 2025.
The projects were scrapped due to unfavorable economics, challenging commercial conditions and regulatory conditions. The decision was reached as part of a review by the company’s newly-elected board and CEO. The leadership change took effect after Air Products lost a proxy fight with activist investor Mantle Ridge.
“The decision to exit these three projects will streamline our backlog and focus company resources on projects that drive value for Air Products’ shareholders,” Air Products CEO Eduardo Menezes said in a news release.
The projects include a sustainable aviation fuel expansion project with World Energy in Paramount, California, due to “challenging commercial aspects surrounding the expansion project and current operations.”
Air Products is also ditching plans to build a green liquid hydrogen production facility in Massena, New York, that would have produced 35 metric tons per day and its carbon monoxide project in Texas.
Unfavorable project economics led to the carbon monoxide project’s demise. Regulatory developments that left existing hydroelectric power supply ineligible for the clean hydrogen production tax credit plus slower than expected development of the regional hydrogen mobility market led to Massena’s cancellation, the release states.
The company said the estimated charge will not impact adjusted earnings per share for fiscal 2025. Although Air Products said it does not expect additional material cancellations going forward, the company continues to evaluate all projects in its backlog.
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