Background

• AirPower is the largest independent industrial gases supplier in China by revenue, formed in July 2021 through the merger of Yingde Gases and Baosteel Gases, two PAG-controlled companies which PAG invested in 2017 and 2019, respectively.
• Through its extensive network of 135 air separation facilities covering 24 provincial regions in China, the company has been focused on providing customers in the manufacturing, electronics and healthcare industries with customized and differentiated engineering and operational solutions to their industrial gases needs. The company has also become an increasingly prominent supplier of industrial gases in Southeast Asia and India.

Highlights

• To help drive commitment to accelerating carbon emissions reduction, PAG has worked closely with AirPower and has developed a robust decarbonization strategy to reduce 30% of carbon intensity by 2030, using 2020 as a baseline year.
• As of the end of 2022, significant progress has been achieved following the implementation of the roadmap:
  • Reduced 158,000 tCO₂ emissions from energy efficiency initiatives.
  • Captured, recycled and reduced direct carbon dioxide emissions amounted to 385,112 tCO₂.
  • Consumed 167.9 million kWh of renewable energy.

Key Decarbonization Initiatives

1. Developed a robust and comprehensive decarbonization roadmap

The company conducted a comprehensive review of its Scope 1 and Scope 2 emissions to establish the decarbonization baseline.

Based on an external audit, Scope 2 emissions represented 80% of the company’s total emissions, and 96% of which was attributed to energy consumed during air separation. Under PAG’s leadership, the company set a goal to reduce 30% of carbon intensity by 2030, and developed a clear roadmap towards increasing energy efficiency and reducing reliance on fossil fuels.

The diagram below summarizes five key areas and respective anticipated reduction potential for AirPower to achieve the decarbonization goal:

2. Increased carbon capture initiatives

AirPower has undertaken carbon capture initiatives to convert carbon dioxide into high-value downstream products such as carbon monoxide. Notably, AirPower's Jingmen facility has entered into an agreement to supply synthetic gas, a key industrial ingredient, to Handsome Chemical (leading player in alkyl acetate) and Yuanhan New Energy (an EV-battery solvent producer), which will be captured and processed into downstream value add products. The partnership with Handsome Chemical and Yuanhan New Energy will allow AirPower to effectively capture over 800K tons carbon dioxide emission per year in its Jingmen facility, equivalent to removing approximately 174,000 passenger vehicles from the road annually¹.

3. Significant uptake of renewable energy

The company has significantly stepped up its renewable energy consumption in its operations since establishing the decarbonization roadmap. Renewable energy consumption amounted to a total of 167.9 million kWh within two years, equivalent to powering the electricity consumption of over 50,000 households annually².

Conclusion

PAG has fully supported AirPower's decarbonization strategy and has made significant progress in the past 3 years.

PAG believes that AirPower has a critical role to play in China's clean energy transition. We will continue to support its decarbonization initiatives to generate a broader impact on adapting more sustainable energy solutions for the industry, in China and elsewhere.

¹Typical passenger vehicle emits 4.6 metric tons of CO₂ per year. Source: https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-typical-passenger-vehicle, last accessed October 31, 2023.
²The average electricity consumption per household per month in Hong Kong is about 275 units, or 3300kWh per year. Source: https://www.emsd.gov.hk/energylabel/en/cal/cal.php, last assessed October 31, 2023