Air Water manufactures and sells green industrial gases that provide environmental value because they do not emit CO₂. The electricity required for gas production is offset by using renewable energy power from biomass power plants operated by Air Water group companies.

     Initially the system will be used to produce liquefied oxygen and nitrogen at Air Water’s Hirakata Pant during the first half of fiscal 2015. The oxygen and nitrogen will be supplied to the Amagasaki Plant of group company Air Water NV. Plans call for gradually expanding the system depending on demand.

     While many manufacturing and industrial sectors seek to shift to products and processes with lower CO₂emissions in order to achieve decarbonization, the electronics industry and a variety of other industries and sectors are also seeking the supply of green industrial gases, such as oxygen and nitrogen. Fuyuki Takahashi, leader of the company’s Air Gases Department of the Industrial Gases Business Unit’s Business Division in the Digital and Industry Group says, “Companies that consume our gases are requesting green industrial gases which does not emit CO₂ during production since they regard that it’s important to calculate the amount of CO2 emissions for their business activities .” 

     However, the production of air-separated gases consumes a large amount of electricity, and the company was faced with either purchasing non-fossil fuel certificates or using renewable electric energy to produce green gases.

     To meet these needs, Air Water, who operates four biomass power plants within its group, has offset the CO₂ that is emitted during the production of air-separated gases with the environmental value of the green electricity generated at these plants (total generating capacity of about 170,000 kW), making the industrial gases CO₂-free.

     The mass balance method was used to calculate the offsets. This method allows reductions in CO₂emissions achieved through the use of biomass and recycled materials to be allocated to specific products. Verification by a third-party organization is required for implementation.

     Leader Takahashi says that by producing and supplying green industrial gases, “not only will it reduce the CO₂ emissions of the Air Water Group, but also the users of our gases will be able to switch to using materials and raw materials that do not emit CO₂, thereby contributing to scope 3 CO₂ reductions.”

Incorporating environmental value into pricing

     Air Water is positioning these green industrial gases as products with new value in that they do not emit CO₂, and will propose them at prices that will include added value in addition to the prices of existing gases.

     How much added value to include will be a key factor in marketing green industrial gases. In Japan, there is currently no CO₂ emission regulation or carbon incentive in place that would be able to absorb price increases due to environmental value, and there are still many uncertainties as to how much added value will be recognized. However, looking at the global market, there are already regions where such regulations and incentives are in place. By pioneering green products, the company hopes to increase its knowledge for future business opportunities.

     In terms of industrial gases that include environmental value, green hydrogen derived from a renewable energy source is leading the way. After hydrogen, green air-separated gases are now also been introduced. It will be interesting to see how the value of green products will be accepted in the market going forward.

---