Global gas supplier Linde continues to pursue a $50bn pipeline of clean energy-related projects even as market appetite for risk moves lower due to macroeconomic crosscurrents.
“The combination of inflation, rising interest rates, and geopolitical tension is curtailing risk appetite, and hence overall economic activity,” CEO Sanjiv Lamba said on the company’s 3Q32 earnings call. “However I remain confident in Linde’s ability to weather any economic downturn based on the strength of our diverse portfolio and long-term contracts.”
Linde’s projects involve tier 1 customers with a commitment to decarbonizing, allowing many of its projects to remain on track.
“There is a bit of a risk-off in the market,” Lamba said. “We’ve always maintained that technology and scale-up resulting in projects that have a competitive position are the ones that are going to move forward.”
About 60% of Linde’s $50bn project pipeline over the next 10 years will likely occur in the US, “where developments continue to be fairly robust.”
The company’s near-term outlook for almost $10bn of project decisions over the next few years also remains on schedule.
Samba expressed a more reserved view on the ability of green hydrogen to scale up in the near term, noting limitations on investments in new renewable capacity to make green hydrogen as well as immature technology and scale.
“Technology and scale-up on green is also lacking today,” Lamba said, adding that it will take an additional five to seven years before green hydrogen technology reaches maturity.
He expects there will be an inflection point in about a decade when green energy projects become cost competitive and can be meaningfully deployed.
