Air Products and Chemicals, Inc. (APD) Earnings Call Transcript & Summary

Well, good morning, and thanks for joining us today. And it's a pleasure for me to host this session with Simon Moore. I've hosted these fireside chats with him many times. This is our fifth Hydrogen Conference. Our first one effectively coincided with their NEOM announcement. That was 2.5 years ago, and ever since, it's like every couple of months, Air Products has another hydrogen announcement. So we have lots and lots to talk about. Simon, it's been a real pleasure hosting these with you. For those of you that don't know Simon's background, he is in charge of IR and Sustainability at Air Products, but he's -- has a long career there and he had a role in the merchant business and a role in the hydrogen business, a role in the tonnage business. Back when they had an electronic chemicals business, he was in Asia involved in that one. So he's got a wealth of experience at Air Products. It saddens me to think that this might be my last fireside with you, Simon, unless we can do something to disrupt your plans, which we certainly will try. But anyway, thank you for joining us today. We've got lots to talk about, but glad to see you this morning.

Well, great. Steve, again, thank you, and thank the rest of the team that allows us to be here today. Thanks for all the investors on the call today. Good luck changing my plans. I think you'll have to wrestle with my wife to do that, but I really appreciate the opportunity to talk. And on the call today, I just want to acknowledge that Sidd Manjeshwar, who is going to take over my responsibilities as Investor Relations as I retire at the end of March. A number of folks have had a chance to meet Sidd and will continue to do that going forward. And also Mun Shieh is on the phone. Mun has been part of our IR team for a number of years, and everybody knows him. But Steve, I'll tell you what. As you said, we've got a lot of exciting stuff to talk about. So rather than me rambling on, why don't we just jump right in?

Well, very good. At the very end of yesterday afternoon, we had AES' CEO on a session, and there was tremendous interest in that, and ever since the announcement from last week. But this is just one of many of your hydrogen projects. And I think what I'd like to ask you is your view on where do you think this is going to go from here? I mean, you got these big green projects in NEOM and this new one in Texas. You've got multiple big blue projects. You got Louisiana, you got Alberta, you got the SAF project with World Energy. You got a lot of announcements you already made, but where do you think it goes from here? Is this going to slow down, and it's a focus on implementation? Or what's in the pipeline? Is there more to come?

Sure. Great question. If it's all right, I just want to step back for a second, right, because it's easy to dive to the projects. So just maybe set the stage from an overall strategic standpoint. And I know the investors on the call here know this, but at the end of the day, why are we doing this? Because the world wants more energy, and it wants it with a lower carbon footprint. And I think everybody agrees with that. Everybody sees that as a fundamental direction. The specifics of how different countries, regions are getting there might be different, but that's the fundamental goal and we don't see anything changing there, and if anything, that's accelerating. And then given the fact that world needs more energy and wants it with a lower carbon footprint, we think hydrogen has an absolutely critical role to play in decarbonizing our economy because there are some things you can do directly with electricity. You can produce renewable electricity and use that directly, but there's a lot of applications where that is either impossible or impractical, and so we see in there that hydrogen plays a key role. And then finally, Air Products has 60 years of experience in the hydrogen business. We're producing 9,000 tons a day of hydrogen today. We're the world's largest producer of hydrogen. So we are excited about taking that experience and expertise, complement it with some additional technologies we've added to our portfolio, and being able to deploy the right solution for the right situation. And Steve, I know we'll get into the details of our projects, but no two of these projects is exactly the same, and I think that's important because the solution is not exactly the same in each of these locations, driven by the geography, driven by the availability of resources, et cetera. And so we are excited about the projects we've announced. Almost every day, there's a new sign that the world is very focused on this. We'll talk about the U.S. IRA, Canadian government's support for our project. Saw the German government just in the last week or two formalize their program to import green ammonia or green hydrogen, so we're seeing that happening around the world. So long-winded answer to your question is, I am excited about the projects we've announced before, and I am highly confident there'll be additional projects to come in the future.

Very good. I just wanted to make sure everybody on the line -- and I got a pretty good roster of folks. Anybody that wants to ask a question that I can relay for you, just send it through to the portal. I wanted to at least throw out a little bit here on the Texas project. My colleague, Julien Dumoulin-Smith that covers AES, he was -- he led the call with them yesterday. And part of the discussion was, not surprisingly, consistent with the question I had for Seifi on the call last week, and that is, 200 tonnes per day seems conservative when you got 1.4 gigawatts of power. Is that because of the uncertainty that is out there on how the IRS is going to account for green hydrogen from renewable power? In general, are there multiple ways that this could play out? And do you concur with that view that 200 tonnes per day is conservative? Could it be meaningfully higher down the road? And the reason I ask is not just raw production. But when we crunch through the -- what we think your costs are going to be, but when you take possession of the hydrogen from the joint venture, there's an enormous benefit in that cost structure. If -- assuming our math is right, if that production rate goes up, and so perhaps you can just comment on that number. Is there potentially a meaningful upside to it?

Well, good question, Steve. And again, maybe just step back for a second and kind of set the table. So we're really excited about this project. And of course, it's a production joint venture between Air Products and AES. And I think the strategic logic of the two of us working together is really overwhelming. Obviously, AES, a leading producer of renewable electricity today. Air Products, the leading player in hydrogen. We come together, and you can see how those strengths complement each other for the production joint venture. Now, the production joint venture will get the benefits of the various provisions in the Inflation Reduction Act, the hydrogen production tax credit and the credits for renewable electricity. And the production joint venture is going to earn a reasonable return. It needs to earn a reasonable return because AES needs to earn a reasonable return. But to your point, what that translates into is a very attractive purchase price of green hydrogen for Air Products because while the production side is a joint venture between Air Products and AES, the downstream side is all Air Products. So the benefits sit in the joint venture, but they translate to Air Products into a very attractive purchase price of green hydrogen. Now, what you're getting at with your question, Steve, around that is what it really boils down to is what's the quality of the sun and the wind and how can you optimize the production, right? You've essentially got no raw materials, and so it's an optimization between capital costs, production and making sure you continue to hit the low carbon targets that are required. We're very excited about this location because it's got some of the best sun and wind, it's also got the land and it's got the water. But I also just want to point out that the reason we're doing our project in NEOM is because, quite frankly, the sun and the wind in that portion of Saudi are better than they are in Texas. But this project, of course, has the benefits of the U.S. IRA. So all of those things go into -- they factor into when you're thinking about where you want to build these projects. So there are, of course, optimization opportunities. And between us and AES, we're thinking about that, we're working on that. You brought up one possibility about the matching of the power. I think on the call, Seifi mentioned a possibility of some modest battery storage that obviously kind of shaves the peaks and fills in the valleys as well. I don't think that's going to be a massive investment in batteries, but that's another optimization as well. So we're incredibly excited about this project. There's a lot of work left to do on the project, and we'll see how all this shakes out. But obviously, you've got 2 leading companies in their areas of expertise, and we're going to optimize this facility to ensure we get the optimum level of credits, but also that we optimize the capital expenditure relative to the production.

So yesterday, we had a series of sessions with various electrolyzer providers. We had PEM, we had alkaline, we had AEM and we had solid oxide. It seems like you're fairly focused on alkaline. Perhaps it's a long-term relationship that you have with thyssen. But given the variability that you just described with particularly solar power in Texas, is alkaline the logical electrolyzer? Or are you potentially open to alternative electrolyzer technologies that might be more responsive to variable power rate?

Sure. Well, I think probably both those things are true, Steve. I mean, we are actively staying abreast of developments in this area, and it's not just picking up the paper and reading about this stuff. We're engaged. Obviously, this is a critical part of our success going forward. We spent a lot of time thinking about these different technologies before we entered into the relationship with thyssenkrupp. We're very excited about the work that they are doing and continue to do to maintain their leadership position. And I think one of the things to keep in mind is the ability for these companies to actually produce the electrolyzer modules themselves. As you pointed out, we announced NEOM 2.5 years ago, and that was by far the largest green hydrogen project in the world. Orders of magnitude bigger. So we had to obviously feel good about the technology, but equally true, we had to ensure that our partner was capable of scaling up their production to produce the electrolyzers that we need. And I think that's another critical element to this. So I would say that we are, of course, using the thyssenkrupp alkaline technology for NEOM. I think on the call, Seifi said we'd expect to work with thyssenkrupp on this project. But clearly, it's a developing technology area, and we're going to continue to look for the best solution for our projects.

We've got -- quite a few questions came in on the portal, and I thought I'd address some of them. And here's one that's fairly broad, and that is, what do you view as the primary bottlenecks for new projects? Is it regulations and perhaps, Inflation Reduction Act was a real catalyst here for you? Or is it capital? Is it technology? Is it labor? What would you say is going to regulate the pace of new project announcements as we go forward from here?

Great. And I'm, of course, going to answer that question from the Air Products perspective. I can't speak to other folks. I think that people underestimate how hard it is to put these projects together, how long it takes and how much work it is. I think Seifi said on the call that we've been working on this project in Texas for 3 years. . Well, why does it take 3 years to put this together? Well, for example, we don't want to announce a project in a case like this until we have the land secured, so you need to secure the land. And depending on the specifics of the projects, you might have partners that you need to line up your agreements with. And so it is, I think, simple to put out a press release that says you're going to think about maybe one day working on a team to think about the projects. It's a little bit of a different story to kind of really put these things together. So I'd point that out. Obviously, you need the balance sheet, you need the capital, you need the execution capability. I mean, these are big projects to execute. You got to have the engineering, procurements, the construction resources to be able to do this. Depending on the project, you're looking at potentially customer relationships that you've got to put together, maybe downstream of supply chain. So I think the world, honestly, Steve, underestimates a little bit of the -- how much work it takes to put these together. So if you're starting now, I don't think you're going to have a credible, real project for a few years. The good news about Air Products is we're not starting now. We're starting, if you will, 5 years ago at least, and that's why you're able to see this regular cadence of project announcements. New York, which we announced a few months ago, we've been working on that for a while as well. So I don't know if we can keep up the pace of a $4 billion project every week, but there are certainly other exciting projects out there that are under development for Air Products.

One of the questions here is basically focused on the cost to produce blue is less than the cost to produce green. But where I think that, that question can then also go is the end markets that you're targeting for blue versus green are obviously different, and perhaps you could address both of those points. Do you see the outlook for the cost structure for blue versus green getting closer over time? And then, this is a very broad question, but I'd like to get into your view of the key end markets for blue versus green.

Good. Well, I'll come back -- let's come back to the end markets. So first of all, again, I think it's an and in our opinion, not an or. Why is that? Because you have different circumstances in different places that allow you to do different things, and let me just give you a fundamental example. Why are we doing green in Texas? We talked about the sun, the wind, the land, the water and the IRA. Well, if I contrast that with why are we doing blue hydrogen in Alberta? Because, first of all, you have good access to natural gas. We have a hydrogen pipeline network there, and you have existing infrastructure to sequester the CO2. Off the top of my head, I don't know the sun and wind profile of Alberta, but my guess would be it is not going to be as good as Texas, right? And so you have to have the right solution and the right situation. You look at Louisiana, again, it's got the very, very good geology to sequester the CO2. A lot of support from the state who was willing to sign a long-term contract with Air Products to allow us to sequester the CO2. And again, if I just bounce around the world a little bit, why green in New York? Well, we're using hydropower, right? Hydropower is an excellent source of renewable electricity for these projects. And again, NEOM, the sun and the wind are very, very strong. So we do think there's different markets, but there's different dynamics that are going to create those opportunities. And again, I go back to where I started. What's important is, at least we think it's important and one of the differentiators for Air Products, is we can do a lot of different things. We aren't here only doing green projects and telling investors why only green projects make sense. We're doing both, and we have the capability to deploy what makes sense. So that's our view kind of, I want to say, on the production side. I'm happy to talk a little bit more about the demand side, if you want to tee up a question there.

Yes. Let's -- one of the questions that came in was about ammonia, and what is your view on the potential for ammonia? The reason it came up in the question here is, the Texas site looks pretty far away from an export capable port. Is ammonia really a realistic downstream derivative? And Seifi made a point on the call last week that really grabbed my interest in that. He said, ammonia or other hydrogen derivatives, and I would certainly welcome your elaboration on what that might be. But certainly, give us your thoughts on the end markets for ammonia, and we should probably differentiate between blue and green on that.

Sure. Well, I'll be honest with you, Steve. I'm less likely to add a lot to what Seifi said on that point last week. But let's talk about ammonia kind of in general, and then maybe we'll talk about it in the context of the Texas project. So Steve, you've heard us say this many times, we're not in the ammonia business. We're not getting in the ammonia business. We have no interest in the ammonia business in its traditional sense. What we think is it's important to have different ways to distribute the hydrogen molecule. And I know I'm a little bit of a broken record today, but again, having this opportunity to choose the right solution. So if we happen to be making hydrogen where we have a pipeline network, of course, that's a great solution to distribute the hydrogen. If we happen to be looking to distribute the hydrogen over a broader area, maybe within a country or a region, liquid hydrogen is an excellent solution. We've talked about that for New York, and I'll come back to talk about that in a little bit. But if we're looking to move those hydrogen molecules effectively around the world, we think of ammonia as the most effective transport mechanism. And of course, the reason is if you try to liquefy hydrogen, you got to use up a lot of energy. It's very cold. And to be blunt, as it's being moved around the world on a ship, you have some heat leak, you lose some of that liquid hydrogen. So it's not that one is better or worse than the other, they have different applications where they make sense. So as we first talked about in our NEOM project, we're going to take that zero carbon hydrogen, turn it into ammonia. And then quite frankly, we can use some of the ammonia infrastructure to move those hydrogen molecules around the world. And then when you get ammonia to either the port where it's going or near the site of application, you could crack that or separate that back to hydrogen, and it again becomes a mechanism to move those hydrogen molecules around. That's what we're talking about when we talk about NEOM. The Louisiana project, as you know, we're going to produce some ammonia there as well. And so it's really a transport mechanism to allow us to access the global markets. Now there's obviously been some conversation and some interest out of particularly, Japan, about the idea of blending some amount of ammonia into a coal-fired power plant. And of course, at the risk of being incredibly simplistic, you're bringing an energy source into that power plant that has no carbon molecules in it, right? So you're backing out some coal, which has a lot of carbon in it, and you're putting in ammonia that doesn't have any. I would argue that the actual energy in there is coming from the hydrogen, so it's a bit of an extreme. But again, even if you're using ammonia in your power plant, you're really about the hydrogen. That's what kind of that's there for. So we'll see how that market develops. I mean, in our view, that -- whether Air Products participates in that market or doesn't, it's another example of application growth around the world. Then let's talk about the Texas project, and I would suggest that perhaps the best way to think about this is for investors to consider the base case from a downstream standpoint in Texas to the liquid hydrogen to the mobility market. So in other words, we would take the green hydrogen from the joint venture, we would install liquefying plants and then we would move that liquid hydrogen around probably North America to support the mobility market. It's a big facility, but it only has enough hydrogen to supply about 4,000 trucks, so it does not need a significant percentage of the trucks in the U.S. And one of the things I think investors -- or we need to do a better job of helping investors appreciate is, we have a robust liquid hydrogen supply chain in North America today. We have 4 or 5 plants. We move liquid hydrogen all over the U.S. and Canada to those places where it's needed. So when we announced the New York project, people were all, how are you going to move the liquid hydrogen now to New York? Well, we move liquid hydrogen from Canada all -- down into the U.S. We move it from Texas to California. So using liquid hydrogen to move hydrogen molecules around is an existing supply chain. The only difference, quite frankly, here is, this will be low carbon. We're excited about the heavy transportation market. We've talked before. I think there's general consensus that smaller passenger vehicles, probably best done by battery electric. But the heavier transport, buses, trucks, trains, maybe ships, maybe planes, better done with fuel cell electric vehicles, meaning that they may need hydrogen as a source. So I think that's something that we can do. We are excited about doing. We like that market. But as you mentioned and as Seifi talked about, there may be some other options there. I think it is a long way down to our Houston pipeline network, so building a pipeline to bring that all the way down would seem to be a pretty expensive solution. But maybe somebody would value having that green hydrogen or green ammonia directly in that area. But again, if that brings more value from a shareholder standpoint, we'll contemplate doing something. If not, we're very happy to take this as liquid hydrogen into the merchant market.

Okay. I wanted to follow up with you on one of those topics you just mentioned about hydrogen -- I'm sorry, ammonia, being cracked back to hydrogen. We had 2 presentations yesterday with novel technologies to do exactly that as an alternative to the traditional disassociation of ammonia to hydrogen. So my question for you is, what do you say when someone says 30% of the energy value of the ammonia is lost when you convert to hydrogen? What's your view on that? And then secondly, do you have a view on some of these newer entrants that have a potential pathway to disassociate ammonia into hydrogen in a fairly cost-effective way? Would that kind of increase your conviction of using ammonia as a carrier?

Well, I'm not quite sure who quotes the 30% number, but I'm pretty sure it's somebody who has no plans to dissociate ammonia. So quite frankly, I'm not sure about their credibility on that comment. Obviously, this is a key part of our supply chain. We are working very hard on optimizing, let's call it the efficiency, which is kind of you're talking about, but also the capital efficiency of this. These are pretty significant projects, and so you want to make sure you optimize the capital efficiency. Obviously, before we announced the project in NEOM, we thought quite a bit about dissociating ammonia back. We're highly confident of that. We've done some good work on this. We haven't talked about our expected efficiency rate, but I can assure you it's not anywhere near 30%, Steve. In terms of new technology, and I think my answer is going to sound a little bit like my answer on electrolyzers. It's important to us. We're paying attention. We're watching. We're thinking about this ourselves, but we also need to build world-scale projects that are going to reliably operate. And I didn't listen -- I wasn't able to listen yesterday, I'm not saying that those were [ aren'ts ], but you got to make sure this is ready for prime time. Because again, this is a step in the supply chain, and if the disassociation unit doesn't operate, we're going to have a real challenge supplying to customers. So it's an important part of our supply chain work. We've got a team of people that have been and continue to work on this, and we're very excited about this. As you have seen, speaking about distributing this in downstream, we've recently announced 3 potential areas in Europe where we're looking at developing the ability to receive the ammonia, crack the ammonia and distribute the hydrogen. One in Germany, one in Rotterdam and one in the U.K., and that's exactly consistent strategically with what we talked about when we announced NEOM. We always said in NEOM, there's the production joint venture, and then Air Products will take the ammonia downstream and build out the supply chain. So I think you're seeing us do exactly what we said we're going to do. And again, the announcement out of Germany about exactly how they're going to operate their -- they do call it a scheme. That's a good thing. It's a positive thing. But the German government is going to buy imported green hydrogen or green ammonia under long-term agreements, and then the German government is going to turn around and sell that to users in Germany. And so I think, again, whether Air Products participates in that or not, another tremendous example of governments around the world stepping up to help drive hydrogen's role in the energy transition. That is, of course, different in the U.S. IRA, but fundamentally, they're about the same thing. So again, a key part of the technology, and we're absolutely building out that supply chain going forward.

I got 2 here regarding your Louisiana project. First one being, can you comment on the status of the Class VI injection well? Do you have any visibility on when that might get installed and permitted, and so forth? The other question being, a couple of dozen older steam-methane reformers on your pipeline. What do you see as the potential of converting those into blue hydrogen sources? So 2 questions on Louisiana.

Sure. Well, we're full speed ahead on the Louisiana project, as we are on all of these projects that we've talked about. Again, a big project, a lot of work to do on that, $4.5 billion, so a lot of work to do. But specifically around the question about the EPA wells, we don't have those in hand yet, but we're highly confident that we will. And I just think it's important to make the point is, you don't have to have that permit in hand before you start building a plant. Again, that permit only pertains to the sequestration of the CO2. So before you can sequester the CO2, you have to have that permit in hand. But obviously, we can execute on the project without that permit, so we don't see any challenge to the schedule in that aspect of it. The other question, I think, is very interesting. Obviously, we do have a lot of hydrogen plants. As you know, Steve, we have the industry's largest carbon capture system on 2 hydrogen plants in Port Arthur, Texas. We've been capturing more than 1 million tonnes a year of CO2 for about 10 years. And we actually retrofit 2 existing hydrogen plants when we did that 10 years ago, so we've got experience. So we're very excited about this opportunity. We think that taking those existing assets, reducing their carbon footprint creates significant value for our customers from those plants, many of whom are looking at decarbonizing their own operations or their supply chain. Obviously, with the increase in the 45Q tax credits in the IRA, it makes those projects even more interesting. As we have said a number of times, the -- to be a bit simplistic, the hole in the ground in Louisiana has more capacity than just for our new Louisiana plant. So we do have the potential to sequester CO2 from additional facilities. So obviously, we haven't announced anything yet, but we're excited about it, and we're working through this as we speak.

And by extension, an another question on this retrofitting old SMRs. Not necessarily old, but existing SMRs. On your pipeline up in Alberta, is that also something that you're considering?

It sure is, Steve. I mean, we actually -- I mean, we talked about this a lot when we first announced the project. Again, you've got that infrastructure of the Alberta Carbon Trunk Line, ACTL that helps make the sequestering of the CO2 very attractive. We're excited about the conversations we're having with our customers up there. And the example, of course, Imperial Oil, who we recently announced we had signed a contract with to take more than half of the output of the new facility, a demonstration that Imperial Oil very much values the low-carbon hydrogen. So we're going to take a look at that. Again, whether any of these specifically work, which ones work, we'll have to see. We're working through that right now. But we do think that these are good potential opportunities for us and for our customers.

Is there carbon capture potential for the World Energy SAF plant?

Well, there's probably two hands to that answer, Steve. It's easy to capture the carbon and then you got to do something with it. And so really, the question is, can you sequester that CO2 in Southern California? And to be honest with you, I'm not sure. I think that's pretty difficult. So we'll see.

There's a fairly broad question that came in and that is, how would you characterize your approach to hydrogen versus others?

Well, I think I'll comment about our role in hydrogen. The world needs more hydrogen. It needs more low-carbon hydrogen. We kind of set that out at the beginning of the call today, Steve. We're the leading player in hydrogen today. We've added some other technologies and partnerships to our portfolio, and so we are incredibly excited about this. Now I think it's also important to recognize, we have a great existing business and we're going to continue to stay focused on that business. We're going to invest in that business if we need a new liquid nitrogen plant in some part of the world. I think investors were, quite frankly, appropriately pleased with the work our team did in driving pricing. So I know this is a Hydrogen Conference and that's the focus of our conversation, but I just want to make sure that people don't have any impression that we're not focused on our existing business. So our approach, again, it's not a one size fits all. What's the right size of project? Well, New York is a different size than Texas. Why is that? Well, we got allocated 94 megawatts of power from the New York Power Authority, so that's what drove the sizing of that facility. And again, it's about hydrogen. It's about producing this low-carbon hydrogen and helping drive the energy transition. It's about understanding where are the governments around the world on their journey to support this. U.S. IRA. You saw, Steve, we announced CAD 475 million of support for our Canada project. We just talked about the plans in Germany to buy hydrogen, and so we are seeing this develop in different countries around the world. So our approach is to understand that, is to understand the fundamental -- if it's sun and wind, you need good -- you need good wind, you need a lot of land. And then developing that downstream market opportunity. Whether that be a pipeline hydrogen customer who values the low carbon hydrogen, whether that be gaseous hydrogen delivered into a dispensing station in the middle of the city to support their buses, that's an active part of it as well. So I can't speak to what other folks are doing, but we're incredibly excited about what we're doing, which is really an end-to-end supply chain strategy. If you will, going from sun and wind or natural gas to hydrogen, the vehicles are delivered to the customers.

You and I have spoken several times on this thesis of the hydrogen required to hydrotreat and crack, vegetable oil into renewable diesel, or even more so into SAF. It's a significant hydrogen demand. In your view, can that -- can the credits for even lower carbon renewable fuel justify shifting from gray hydrogen to blue, or even to green? Do you have a view on whether the incentives are there to go to blue or to green? And if so, does that justify perhaps a higher premium for blue hydrogen in its use for renewable diesel than say, blue hydrogen to just simply replace gray hydrogen?

Well, I mean, I think the answer is again, not to give a very precise answer, but the answer is it depends. I think, look. If somebody is producing a lower carbon fuel, renewable diesel, sustainable aviation fuel, clearly, that's against the backdrop of wanting to have low carbon, right? I mean, that's why they're doing that. And so if the hydrogen can be lower carbon, that would seem to have either explicit value depending on the regulatory program or even just, I would say, implicit value associated with lower carbon production. Again, Imperial Oil in Canada, new renewable diesel facility. They're excited about buying the low-carbon blue hydrogen [ for ] that project. But if -- again, you asked a question about the World Energy project. They're located in Southern California. It's difficult to sequester CO2. Now, could there be green hydrogen as part of that solution? Potentially. So I think you make a great point. Look, the answer is it requires more hydrogen. What carbon intensity works best for the customer? It's going to depend on their markets, right? Where are they selling? What's the value for that? And quite frankly, where are they located? And therefore, what are the relative options around gray, blue, green hydrogen. But the key point is this is a growing hydrogen market, and by definition, it's a market that has some level of value for lower carbon.

One of the sessions yesterday was with a consultant, and it was an interesting discussion on fuel cell vehicles versus battery electric vehicles. And that discussion was for automobiles, for vans, for buses and all the way to heavy-duty trucks and mining equipment, the whole thing. And the individual made arguments for both, but maybe the economics favor battery electric for some. But curious to hear your own view, and I'm sure you've done your own analysis on this, on how you would compare battery electric versus fuel cell in mobility across that whole chain?

Yes. Great question. And I think very simplistically, the heavier the vehicle -- the bigger the vehicle, the heavier the load, the more the relative merits of hydrogen wins out against battery. Well, why is that? Because quite frankly, in your passenger vehicle, it's not a very heavy vehicle. You also have the charging infrastructure, most people have the charging infrastructure at their house. I contrast that with a heavy truck fleet maybe that's delivering from a central location, so it's not that hard to build out the supply chain infrastructure, the fueling infrastructure. And what happens is, the amount of battery you need to drive that vehicle, if it's a heavy vehicle, starts to chew up some of the payload capacity of that truck. And so from a trucker standpoint, that's a real problem. You also have the relative benefits of quickly, I would say, refilling with hydrogen versus recharging with batteries. So in cold weather, obviously, the battery performance degrades, the fuel cell performance continues to stay strong. So I think -- and again, I don't know exactly what your consultant said yesterday, but I think there is a general consensus that lighter vehicles, battery electric. Heavier vehicles, fuel cell electric. Now, the question might be where exactly is that breakpoint? What about a light truck or a heavy SUV? I think that's probably to be determined in the middle there. But we see a significant increased interest for heavy transportation, buses, trucks, trains. Ships is another interesting opportunity. And while we talk about SAF for airplanes, there are certainly people thinking about hydrogen-powered airplanes, but we'll see on that one.

Simon, unfortunately, we just ran out of time. And we could continue for a long time, I'm sure. But listen, I really appreciate you giving us the time here. It's been really interesting. And sure appreciate all the help you've provided us over the years. So my best to you, and thank you for the time today.

Thanks, Steve. And thanks for remembering back when we only had one project to talk about the first time we did this. It's a lot of fun. Really enjoyed it. Everybody, have a great day. Thank you.

Thank you.