Air Products, a global leader in industrial gases, has announced its decision to terminate three US-based projects, resulting in a significant pre-tax charge of up to $3.1 billion in its fiscal 2025 second quarter.

The substantial charge primarily stems from asset write-downs and the termination of contractual commitments associated with the three projects. The affected projects include:

• World Energy Sustainable Aviation Fuel (SAF) Expansion Project (Paramount, California): Air Products has ended its agreement with World Energy, ceasing its involvement in the expansion project. The decision was driven by "challenging commercial aspects surrounding the expansion project and current operations," according to the company.

• Massena Green Liquid Hydrogen Facility (Massena, New York): Plans to construct a 35 metric ton per day green liquid hydrogen facility, along with related distribution and dispensing operations, have been scrapped. Recent regulatory changes impacting the Clean Hydrogen Production Tax Credit (45V), rendering existing hydroelectric power supply ineligible, and a slower-than-anticipated development of the regional hydrogen mobility market contributed to the cancellation.

• Carbon Monoxide Project (Texas): Air Products has terminated a carbon monoxide production project in Texas due to unfavorable project economics.

"The decision to exit these three projects will streamline our backlog and focus Company resources on projects that drive value for Air Products’ shareholders,” stated CEO Eduardo Menezes.

While the $3.1 billion pre-tax charge will impact the company's financial statements, Air Products clarified that it will not affect adjusted earnings per share for fiscal 2025. The company also cautioned that estimated contract cancellation and other project cancellation costs are subject to further refinement and may deviate from actual costs.

Despite these cancellations, Air Products remains committed to its major ongoing projects. The NEOM green hydrogen project in Saudi Arabia is progressing steadily, with nearly 80% completion and green ammonia production expected to commence by the end of 2026. The Louisiana Clean Energy Complex is also advancing, with a projected startup in 2028. Air Products is actively seeking equity partners to participate in the ammonia loop and carbon dioxide sequestration aspects of the Louisiana project, aiming to reduce capital outlay.

The company will provide further details, including revisions to its capital expenditures forecast for fiscal 2025, in its fiscal second quarter earnings release. Air Products has indicated that it will continue to evaluate its existing project backlog but does not anticipate further material cancellations at this time.

Air Products, with over 80 years of experience, is a global leader in industrial gases, serving diverse industries and focusing on clean energy solutions.