Case study: Commitment to a science-based net zero target using the example of Air Liquide

In 2015, the Science Based Targets initiative (SBTi) was established to help companies set realistic and effective emissions reduction targets that can prevent the worst impacts of climate change. These targets are considered science-based if they are in line with current climate science and the Paris Climate Agreement, which aims to limit global warming to 1.5 degrees above pre-industrial levels.

The Paris-based group, Air Liquide, produces, markets and sells industrial gases worldwide, including liquid nitrogen, argon, carbon dioxide and oxygen, and is one of the world's leading industrial, medical and environmental companies. As part of an initial analysis, the considerable carbon footprint was classified as a risk factor. This led the DNB Renewable Energy team to prioritise Air Liquide in view of our commitment to a science-based net zero target.

We already met with the company in November 2021 and May 2022. From the discussions and the additional written responses, we were able to get an initial picture of the CO₂ emissions and the targets for a reduction:

→ Air Liquide has committed to reduce its absolute Scope 1 and Scope 2 carbon emissions by 33 per cent by 2035 and to reach net zero by 2050. It includes not only CO₂ but all greenhouse gases. The Science Based Targets Initiative certified the 2035 target as being well below 2 degrees Celsius. It should be noted, however, that there is currently no specific regulatory framework for industrial gases. Air Liquide is, however, represented in the working group supporting the SBTi in developing such a structure.

→ Management has recognised that a significant share of renewable energy is necessary to reduce its Scope 2 emissions. These must be equally available, accessible and affordable. Due to its market position as a large energy consumer, Air Liquide signs power purchase agreements and, in certain cases, facilitates the development of large-scale renewable energy projects. It also provides visibility to renewable energy producers, as it often signs 15-year contracts to guarantee the supply of electricity from renewable sources. Air Liquide is currently negotiating a major contract in South Africa (600 GW, to be expanded to 900 MW). For this to happen, the political framework conditions must be right, including taxation, subsidies and government involvement. Air Liquide is also considering a carbon budget per region to assess how many emissions it can afford in each region.