➤ A hybrid of local and long-haul hydrogen infrastructure could emerge

➤ Liquid hydrogen deliveries by truck will be an important transportation mode as the industry scales up

➤ Building the necessary hydrogen infrastructure requires ongoing research and development, public-private partnerships, regulation and legislation

Industrial gas giant L'Air Liquide SA is one of the leading proponents of the hydrogen economy, a model that envisions zero-carbon hydrogen displacing fossil fuels for transportation, heating, industrial processes and power generation. Achieving that vision will require companies like Air Liquide to scale up production of green hydrogen — produced using renewable power — and blue hydrogen, which relies on carbon capture and storage.

It will also require roughly $80 billion of infrastructure investments through 2030, according to the Hydrogen Council, an industry group that counts Air Liquide among its founding members. Air Liquide has experience in hydrogen production and transportation and has supported the development of end-use markets like fuel cell electric vehicles.

S&P Global Market Intelligence interviewed American Air Liquide Holdings Inc. Chairman and CEO Michael Graff to discuss the challenges and opportunities in building out U.S. hydrogen infrastructure. This is an edited transcript of that conversation.

S&P Global Market Intelligence: Do you envision long-haul transmission pipelines playing a role in the hydrogen economy, or do you see a world where hydrogen is produced and consumed regionally?

Michael Graff: I would say that it's a bit multifaceted in our approach today. You've got basic infrastructure in certain parts of the country ... where you do have pipeline systems. We actually have very large storage systems, caverns, to store hydrogen, and that easily could create a backbone of an ecosystem to readily move hydrogen around in a given geographic area.

Now, once you utilize that infrastructure — which today is obviously fully utilized for industrial needs, primarily for refining or chemicals — you begin to look at the distributed nature of what you can produce, and how do you serve all of the local markets? So there is no doubt that a more local production and transportation, along with this broader infrastructure, is likely going to coexist as we see how these models evolve.

For us right now, when we think about that more localized or distributed nature of how you move a lot of hydrogen, especially if you begin to think about transporting it by truck or locally ... liquid hydrogen is probably the optimal way to do that, and we're actually investing in those capabilities today.

So liquid hydrogen delivery by truck might be an ideal way to transport supply locally, particularly for fuel cell electric vehicle refilling stations, similar to how gasoline is moved around today?

That's exactly right. It somehow mimics that to an extent. It makes it much easier to get to every location without having to build pipelines. You could repurpose some pipelines in certain areas. That's always a possibility. But I think that this creates a logistical system that can build off pipelines, can build off different centers of production.

The majority of the refining infrastructure today is on the Gulf Coast or on the other two coasts, and I think that that evolves maybe in a different way in the future.

What will be the chief challenges to building a larger-scale U.S. hydrogen transmission system?

Whether you're building out capabilities locally, or you're building pipeline infrastructure to make this work, you need to make sure that you have the abilities to go ahead and make that happen fairly rapidly.

It's a matter of cost. It's a matter of regulatory approvals in certain areas. It's a matter of permitting. It's a matter of right-of-ways. And I think that as with all of this, depending on what you're trying to get to, how you think about leveraging a particular type of technology to produce the hydrogen will help enable what you need to do from the infrastructure standpoint to deliver that hydrogen.

You can't do these things overnight. You're dealing with an existing infrastructure, and now you're thinking about a new infrastructure to enable these new capabilities. And I think in order to make all that happen, to make all those things evolve, obviously R&D and a lot of the things that we look to continue to work through — public-private partnerships or working joint with others — continue to evolve and will be very important.

So then in the end, you're going to need regulations and legislation to advance that smart climate solution mindset as we think about what's going to happen. So I think all those things have to come into play to make this work.

What role does Air Liquide see itself playing in building out the infrastructure to enable the hydrogen economy?

We see Air Liquide's focus as starting with technology and all the various technologies necessary to produce and manage and utilize hydrogen. We see ourselves in the production capabilities, in the development of those state-of-the-art capabilities.

We see ourselves very directly involved in the transport of that hydrogen. We know how to do that very well, and continue to develop new technologies, whether it's pipelines … whether it's by truck — whether that's gaseous or it's liquid, which we think is the way long-term for many of these markets — and also for the storage of that hydrogen.

We don't see ourselves as the retailers of hydrogen. We've helped enable that. We've built out [fuel cell electric vehicle filling] stations. We actually own some retail stations out in the state of California to enable that and demonstrate it. We've taken an active interest in a retailer on the West Coast, as well, to help enable that. But long term, we see ourselves focused on those areas from technology to delivery of hydrogen.

Air Liquide is building the world's largest proton exchange membrane, or PEM, electrolyzer in Becancour, Quebec, to produce green hydrogen. Who will be the end-users and what infrastructure will be necessary to reach them?

At that particular site, we produce some quantities of liquid hydrogen today, and we are expanding those capabilities with our additional investments. So we will be in a place where we will be able to transport that liquid hydrogen, as we will liquefy it after it's produced.

We're building out the infrastructure for 12 hydrogen refueling stations in the northeast. We are doing that, joint with Toyota, as you begin to think about the introduction of hydrogen fuel cell vehicles in the northeast. We also will have that available for industrial customers, both in Canada and in the northeast part of the U.S. as well.

It'll be similar to how we will move our hydrogen from Nevada to the state of California. So you think about liquid hydrogen moving by truck, which is done today, day in and day out for a lot of industrial needs from many facilities across the country. And we see that infrastructure growing and evolving over time.