Industrial gas companies’ market worldwide is dominated by a couple of giants with Linde having 21 percent of the market with $28 billion in revenues in 2022 and growing its hydrogen segment 18 percent annually. It also posted 12% reduced supply chain cost through its tie-up with Praxair. France’s Air Liquide has technical barriers on electronic special gas and supplies 99.9999% concentrated helium to 75% of the world’s semiconductor manufacturers and one 300mm wafer plant uses up $12 million of high-purity nitrogen in a year. Air Products has spent 4 billion euros on the NEOM green hydrogen project in Saudi Arabia, which will produce 650 tons of green hydrogen electrolytically a day after its completion, and carbon emission reduction is tantamount to a reduction of fuel vehicle emissions equivalent to 3 million per annum.
Among the domestic players, Taiyo Nippon Sanso controls 40% of neon supply in Asia, and during the Ukraine crisis that pushed prices of neon by 20 folds in 2022, it was able to keep production levels at $8 per cubic meter with Russian alternate raw materials, 37% lower than industry standards. Seizing the geographical superiority of air separating units, China Hang Oxygen Group reduced the production cycle of 100,000 Nm³/h oxygen equipment from 24 months to 18 months, increased the home market share in industrial gas business to 15% in 2023, and the unit price of oxygen sales was 13% lower compared with imported brands. India’s INOX Air Products provides steel mills with 5,000 cubic meters of hydrogen per hour through ammonia cracking technology at an operating cost 22% lower than natural gas reforming.
Niche innovators are on the increase. Germany’s Messer Group (Messer) has developed a mobile CO2 capture unit that can deliver 99.5% purity of food grade CO₂ from steel plant flue gas with a capture efficiency of 90% at only 35 euros per ton. Nel Hydrogen’s Alkaline cell technology reduces the energy used to produce hydrogen down to 4.3 kWh/Nm³, 19% less energy than proton exchange membrane technology and has been subsidized by 200 million euros of European Union finance in 2023 for its capacity build-out of 1 GW. South Korea’s S-Oil and BASF worked together to build a cracking unit, using by-product hydrogen to make 200,000 tons annually of high-purity propylene, and the raw material utilization rate climbed to 98%.
Mergers and acquisitions reshape the competitive landscape. Since Linde’s 2021 $5 billion acquisition of BOC, its health care gas operation increased its profitability margin to 34 percent and grew by 12 new liquid nitrogen tank locations in the Asia Pacific with a storage capacity of 800,000 cubic meters. Air Liquide’s $13.4 billion acquisition of Airgas boosted its stake in the U.S. welding shielding gas market from 22% to 61%, with over 500,000 tons of annual argon sales. China Baowu Iron and Steel integrated gas businesses into the Baoqi Group, and more than 20 billion Nm³ of industrial gas production capacity was reached in 2023 through the steel mill residual gas recovery to reduce the cost of oxygen production to 0.12 yuan/Nm³, which is 40% less than that of the independent air separation unit.
Technological innovations drive market differentiation. Industrial Gas Companies are accelerating their entry into carbon capture, with Air Products’ carbon sequestration project capturing 2 million tons of CO₂ per year and sold through pipeline to Enhanced Oil Recovery companies for $15 / ton. The Blue Ammonia project by Linde and Shell utilizes the methane cracking technology to reduce the carbon footprint of ammonia production from 2.8 tonnes CO₂/ tonne ammonia to 0.4 tonnes with an estimated annual capacity of 1.2 million tonnes/year by 2025. In the electronics special gas loop, Showa Denko mass-produced hydrogen fluoride with ppt level purity for the etching process of 3-nanometer chips, reducing the cost of single wafer processing by 8%.
Emerging economies become growth drivers. Indian industrial gas demand is growing at an average annual rate of 9%, and INOX’s largest single-unit air separation plant in the world, built in Gujarat, is capable of producing 80,000 Nm³ oxygen per hour, which caters to 70% of medical and industrial needs within a radius of 300 km. African Oxygen Limited has invested $120 million in a helium purification plant that will increase the purity of helium being extracted from a Tanzanian gas field from 0.3% to 99.997%, with an output capacity of 140 million cubic feet annually and plug 15% of the missing link in the world helium supply chain. China Huater Gas broke KrF photoresist with krypton-neon blend technology, stability of purity ±0.1ppb, breaking 10 years monopoly of United States Chemours (Chemours), 2023 penetration rate of domestic fab rose to 32%.
Future competition focuses on green transformation. According to McKinsey, the industrial gas companies of the world have to be producing green hydrogen capacity at 80 million tons/year by 2030 to reach the carbon neutral target, while currently production is below 5%. Linde will build the world’s first hydrogen metallurgy pilot base in Leipzig, Germany, to replace coke with hydrogen to reduce steel carbon emissions by 95%, and hydrogen consumption intensity of 60 kg/ ton of crude steel. Air Liquide’s liquid hydrogen transport and storage technology pioneered by the French experts has reduced evaporation loss per day from 0.3% to 0.08%, reducing transportation cost across seas to $2.50/kg. With the EU proposing the Carbon Border Tax (CBAM), carbon footprint certification service revenues for industrial gas companies will increase at a compound annual growth rate of 23% to emerge as a new pole of profit growth.