The industrial gas market - France

1.2 The global market is expanding

The global industrial gas market is growing rapidly. In ****, it is valued at ***.** billion US dollars, and should continue to grow at a CAGR of *.**% over the period ****-****, reaching ***.** billion US dollars in ****. Global industrial gas market size World, ****-****, US$ billion Source: ****

Several factors are responsible for this sustained growth: firstly, as urbanization and industrialization intensify, population growth will drive up demand. This is the case, for example, with hospitals, whose capacity needs to be increased. Secondly, as global GDP continues to rise, there will be increased demand for products and services that require industrial gas. For example, food and beverages, as well as metals and mining, are sectors with high industrial gas content.

It is driven by the Asia-Pacific region(***), being one of the main countries using and supplying industrial gases. [***]

Nevertheless, environmental regulations, safety and the particularly high costs of gas conversion continue to be obstacles to faster growth. [***]

As for the main players, in ****, * companies will dominate the industrial gases market, with over **% of the global market: Air Liquide, Linde and Air Products . The global industrial gases market is therefore highly concentrated. [***]

1.3 A growing domestic market after 10 years of decline

The French industrial gas manufacturing business is listed by INSEE under the NAF **.**Znomenclature code: "Manufacture of industrial gases". INSEE gives this market size for ****: it amounted to *.** billion euros. This figure can be used to estimate the size of the medical imaging market in France in ****, by multiplying it by the annualized sales index for ****, also given by INSEE, then dividing it by the sales index for ****. This formula gives: *.** billion euros * ***,***/*** = *.** billion euros for ****. The same applies to the other years:

French industrial gas market size France, ****-****, € billion Source: INSEE We note that the market was in steady decline between **** and ****, with national sales falling from €*.** billion to €*.** billion (***). The years **** and **** were years of growth, with sales increasing by **% and **% respectively.

In ****, January-August sales are still higher than all sales for the period ****-****, giving hope for the future of the French industrial gas market. [***]

The decline in sales between **** and **** can be explained by the fact that France has become increasingly dependent on imports, which has reduced the country's revenues. This does not mean that the overall use of industrial gas has followed the same trend; on the contrary, it is plausible that as industrialization and ...

1.4 International trade

In this section, we use UN Comtrade data to analyze the industrial gas trade. In particular, we use the code HS**** - Hydrogen, rare gases and other non-metals. This category is slightly larger than industrial gas, but the trends in terms of trading partners are applicable to the smaller industrial gas sector.

Industrial gas trade France, ****-****, in millions of € and as a % of sales Source: ****

Between **** and ****, French imports of HS code **** rose significantly, from €***.* billion to €***.* billion. At the same time, exports have also risen, even more sharply, from ***.* billion in **** to ***.* billion in ****. Indeed, the value of exports has exploded in **** and ****, increasing by ***% and **% respectively. As a result, the trade balance, which was negative from **** to ****, becomes positive from **** . We can deduce from this that France has long been dependent on imports, but has no longer been so since ****.

Destinations of industrial gas exports France, ****, as % of main exports Source: ****

In ****, Frenchfrench exportsof HS code **** were split between several destinations.Germany was was the main market,with **.*% of exports, followed by Italy(***). The rest of the world accounted for **.*% of French exports in this sector.

The graph shows that geographical proximity is a determining factor for France ...

2.1 Which industries use which gas?

Source: ****

broad category

Indeed, the industrial gas market is a B*B market, and it mainly caters for four markets: large-scale industry (***) and electronics. Production in these markets therefore has a direct influence on the health of the industrial gas market in France.

Several markets are driving demand at a higher rate than others. For example, aeronautics, which uses hydrogen, nitrogen and oxygen, is growing fast, with a global market worth **,*** billion euros. [***]. According to the CAE, France is the leading OECD country in terms of non-price competitiveness in aeronautics, with **.*% market share in the OECD in ****.

The chemicals sector has been on the rebound since **** (***), with very good forecasts, thanks in particular to a positive trade balance, which puts France in second place in Europe. [***]. The agri-food industry is doing rather well, with favorable long-term prospects, notably due to demographic change and the need to feed a growing population

The chemicals sector in France represented sales of €** billion in ****. [***]. Changing consumer tastes regarding the presence of additives and preservatives are prompting food manufacturers to use industrial gases to replace them, according to Market Research.

Other customer markets, on the other hand, are in decline and are tending to slow down ...

2.2 Hydrogen: a booming market

Demand for hydrogen is growing worldwide and in France. Legislation concerning greenhouse gases is becoming stricter, and the refining industry is using hydrogen to reduce the sulfur content of fuels and lighten heavy hydrocarbons. [***] In terms of use, Hydrogen Europe states that hydrogen is the main manufacturing component used to produceammonia (***), with **% of hydrogen used for this purpose each year. A further **% of the gas is used in refineries as a reducing agent, and **% for methanol production. The remaining **% of the world's hydrogen production is used in various sectors, such as electronics and semiconductors. Grand View Research estimates that the size of the global hydrogen market in **** will be $***.** billion, and that it should continue to grow at a CAGR of *.*% over the period ****-****. This growth is explained by the fact that hydrogen acts as a replacement product. Against this backdrop, France is investing heavily in hydrogen. Between **** and ****, the nation intends to invest ** billion euros through Afhypac (***). The plan targets demand, production and infrastructure to achieve a hydrogen usage level of **% in EU energy consumption by ****. [***] By ****, AFHYPAC estimates that the use of hydrogen will rise from the current value of *** Petajoules (***) to *** France. The most important segments will ...

2.3 Market breakdown by gas

Nitrogen

The global nitrogen market is valued at $**.* billion in **** and is expected to grow at a CAGR of *% over the period ****-****, reaching $** billion. This growth is fuelled by increasing industrial production in sectors such as metal fabrication [***]

France is particularly strong in the nitrogen fertilization segment of the global market, for which domestic production covers **% of demand. [***]. Within the EU, it is the market leader, supplying **% of nitrogen in the form of mineral fertilizers. This is due to France's vast agricultural land.

Nitrogen is extracted from the distillation of air.

Carbon dioxide

The global carbon dioxide market is expanding: GrandViewResearch values it at **.** billion in **** and estimates that it should grow at a CAGR of *.*% over the period ****-****, to reach **.** billion dollars. Growth drivers include an increase in the use of enhanced oil recovery(***) technology, the food and beverage sector, and increased demand in themedical industry.

La Tribune reports that this market will grow **-fold in France by ****. In ****, for example, France marketed ** million tonnes of this gas, where activities such as bioethanol deposits, and the hydrogen and ammonia manufacturing sectors were the main drivers of this demand.

Argon

The global argon market is expected to grow at ...

3.1 A highly concentrated market

In France, there are four major players , together accounting for **% of the market in ****. Among them, Air Liquide industrie France stands out, with a market share of **.*% in ****.

To calculate market share, we take the revenue of each player in industrial gas manufacturing in France (***), since the data available on the activity of these companies in France dates from ****.

Market structure by revenue France, ****, € million Source: ****

In particular, the revenues of each company are as follows: Air Liquide €*,***.** million, Linde France €***.** million, Air Products €***.** million and Messer €***.** million. Total revenues for all players were *,***.** million euros, or **% of the market.

Air Liquide Industrie France held **. *% of the French market in ****, followed by Linde France(***).

** deals in ****

The chart below shows the number of mergers and acquisitions between **** and **** in the industrial gases sector. Over this period, there will be a total of ***. [***]

Mergers & Acquisitions in the industrial gases sector World, ****-****, in units Source: ****

3.2 The share of domestic production is shrinking

As explained in the AFGC, industrial gases can be produced by various processes, depending on the type of gas and the type of gas distribution to the customer . In general, air gases such as oxygen, nitrogen, argon, helium, krypton, xenon and neon are mainly produced by fractional distillation of air cooled to a temperature where it becomes liquid. Other air separation processes(***) can also be used. Production plants have large cryogenic storage tanks. Below is a table with a detailed description of the production required: Gas Production method Carbon dioxide Carbon dioxide is composed of one carbon atom and two oxygen atoms. It comes from wells in the ground, in particular from the outgassing of volcanoes, the combustion of organic matter and the respiration processes of living aerobic organisms. Anthropogenic sources of carbon dioxide come mainly from the combustion of various fossil fuels for power generation and transportation. Argon Argon is a noble gas. It is the third most abundant gas on earth, and is found both in the atmosphere and in the earth's crust. Moreover, argon is produced industrially by fractional distillation of liquid air. Nitrogen Nitrogen makes up around **% of the earth's atmosphere. Nitrogen is obtained by fractional distillation ...

3.3 The two main distribution channels

Because of thecomplexity of transport arrangements and the high cost of transport, the main manufacturers of industrial gases are also the main distributors. Air Liquide explains that transport costs limit the operating zone to a radius of *** to *** km around the production unit, with the exception of high value-added gases such as argon or helium. As a result, production sites are located close to where they are used.

Chemistry Info also presents two main distribution channels in the industrial gas manufacturing market:

Pipeline distribution (***) to amortize investment in gas installations. Below is a map of GRTGaz's pipeline network. The two channels are Oxygen, nitrogen, hydrogen andCO* can be distributed directly by pipeline via a network of pipes between the production plant and the end customer. In France, Air Liquide operates the largest gas pipeline network for industrial gases (***). It is also possible to install an air separation unit (***) on the customer's site to meet specific needs. These installations also generally supply the local market with gas.

Map of GRTgaz network in ****

Source: ****

Distribution in tanks and cylinders: forgases intended for commercial industry and the healthcare sector (***) to filling centers or directly to the end customer. Air Liquide indicates that, in Large ...

4.1 Product overview: the different types of industrial gas

According to EIGA, thefollowing more detailed classification of the scope of gases can be made: air gases - oxygen (***) ; rare gases - such as helium (***); hydrogen (***); chlorine (***); acetylene (***). In addition,according to Messer , industrial gases are divided into three categories: Industrial gases: used for welding, pressurization, combustion, degassing, protective atmospheres and more. These include air, air gases (***), helium, carbon dioxide, carbon monoxide, nitrous oxide, acetylene, chlorine, fluorine, etc; Medical gases : gases and gas mixtures for medical use (***) such as medical oxygen, medical nitrous oxide, etc; Food gases: used for cooling, freezing, protective atmosphere of foodstuffs, inerting and carbonization of beverages, hydrogenation of oils, packaging of aerosols. These include carbon dioxide, air gases (***), nitrous oxide, helium, hydrogen and sulfur dioxide.

4.2 Production costs for industrial gases

In this section, we provide an overview and breakdown of the factors that determine the cost of industrial gas production.

Although air is free, industrial gas production entails a number of costs. Indeed, theindustry is extremely capital-intensive, which also explains why there are few players and the market is concentrated (***). For example, an air separation plant requires a great deal of energy

Distribution also entails significant costs; transport is often complicated when different packaging solutions are required, such as compressed or liquid forms. Transportation is usually by pipeline, truck or rail.

Research and development (***) is another cost factor in this industry. Every year, over $*** million is invested in this category to improve production, reduce costs and remain competitive. [***]

In this context, and as another indicator to get an overview of industrial gas production costs, we can use the estimate provided by GasPrice's of the breakdown of costs in relation to the Energy Regulatory Committee. In ****, **.**% of Engie's regulated-cost gas bill was devoted to gas supply, **.*% to distribution, **.**% to taxes and contributions, *.**% to gas transport and *.**% to storage.

Below is a breakdown of costs for the different gas categories. However, this table is only indicative, as costs vary enormously depending on production ...

4.3 Producer price index

The graph below illustrates the evolution of industrial gas production prices in France between **** and ****. The base value of the price index is **** (***). Following this logic, we see that prices fell by **.*% between **** and ****, then rose sharply between **** and ****, so that production prices in **** are almost double those in ****. Price index, industrial gas production France, ****-***** (***), in units Source: ****

Finally, below is an overview of the overall production price index for a selection of gases.

Price index for selected gases World, ****-****, in units Source: FRED Between **** (***)

The production price of industrial gas depends almost entirely on the balance between supply and demand, which in turn is largely influenced by transportation costs. As prices have been rising steadily since ****, we can assume that demand has increased while industrial production has not.

5.1 General regulations

The manufacture of industrial gases involves numerous health risks and is therefore closely regulated, from production to transport and storage. Regulations governing the production of industrial gases include the following: [***] Gas storageregulations; Acetylene storage regulations; Oxygen storage regulations; Regulations for the storage of hydrogen; Essential rules for the storage of gas cylinders. In addition, Linde highlights specific regulations for the production of food-grade gases. They must comply with "food quality" regulations, such as European Regulation ***/**** on food additives for European Union countries. In addition, ANSM explains that gases intended for medical devices must carry a CE mark (***) in the case of medicinal products". Overall,ISO provides an overview of standards for industrial gases. It can be found here . Last but not least, since January *, ****, the European Union has been implementing a standard called REACH(***). The body mandated by the European Union will collect data on the substances used, and implement measures in the event of a high risk associated with their use.

5.2 New regulations

Following the fire at Lubrizol and Normandie Logistique in September **** in Rouen, new regulations have been put in place to reinforce the safety of high-risk industrial sites. These changes came into force in January ****[***] :

For warehouses of combustible materials, flammable liquids, waste transit sorting facilities and Seveso facilities: obligationto keep an up-to-date statement of stored materials.it must be accessible in * distinct formats: one for the State and its management of accidental events, and one for the public and its information needs. Implementation ofthe action plan on regulations relating to flammable liquids, involving the entry into force of decrees governing flammable liquid sites subject to registration or declaration. For warehouses requiring authorization: introduction of a provision to anticipate the first environmental sampling. For warehouses with an internal operations plan: obligation to define the measures to be taken to clean up and restore the site, as well as the organization for fighting a fire lasting more than * hours.

6.1 Segmentation

The French and global markets are dominated by the four companies listed below.

• Air Liquide
• Air Products,7
• Messer
• Clesse Industrie
• Butagaz
• Linde
• Messer France
• GCE (ESAB Groupe)
• Praxair ( Linde Group)
• Sol Group
• Carburos Metálicos (Air Products)
• Gaz Industrie
• OxyNord
• Charot
• Polidoro
• Antargaz
• Albioma
• Gazechim Groupe
• GTT
• Axens Groupe
• Adour Méthanisation
• Air Liquide Antilles Guyane (Somal)
• Air Liquide Co2 Europe (Capec)
• Air Liquide Hydrogene
• Air Liquide International
• Air Liquide Middle East
• Air Liquide Reunion
• Air Liquide Sante France
• Air Liquide Spatial Guyane (Alsg)
• Air Products
• Alfi (Air Liquide France Industrie)
• Antargaz
• Antargaz Energies
• Aquabiogaz
• Bio Energies Rivault
• Biogasconha
• Biogaz D'Arcis
• Biogenere
• Bj Méthane
• Caleo
• Centrale Biogaz De Kastellin (Cbkas)
• Centrale Biogaz De Quimper (Cbqui)
• Centrale Biogaz Des Hautes Falaises (Cbhaf)
• Centrale Biogaz Des Terres De Montaigu (Cbmon)
• Centrale Biogaz Du Dunois (Cbdun)
• Centrale Biogaz Du Vermandois (Cbver)
• Centrale Biomethane De Chantonnay Pierre Brune (Cbchn)
• Chaleur De Cosne Cours Sur Loire (C3L)
• Dalkia Biogaz
• Distrigaz Provence
• Distriglace Sud
• Dual Premery
• Engie Bioz Services
• Engie Solutions H2 (Es H2)
• Eni France
• Ethylène Est
• Furiani Gaz
• Gassco As
• Gaz De Barr
• Gaz De Bordeaux (Gdb)
• Gaz De Paris
• Gaz Dom
• Gaz Dom Guadeloupe
• Gaz Opale
• Gazonor
• Gedia
• Ges (Gascogne Energies Services)
• Gnv Alpes Grenoble
• Gnv De Bordeaux
• Gnvert
• Grdf
• Grtgaz
• Hynamics
• Méthaisne Energies Vertes
• Messer France
• Metha Vie
• Primagaz
• Prodair Cie
• Sain Ter Méthanisation
• Sarpi Minéral France
• Save Energies Vertes
• Sefe Energy
• Sigeif Mobilités
• Sogacyp
• Sologne Biogaz
• Soprogaz
• Soviso
• Sté Ch4
• Sté D'Approvisionnement Et De Vente D'Energies (Save)
• Sté D'Energies Et De Combustibles Havraise (Sech)
• Sté Des Pipe Lines De Strasbourg (Spls)
• Sté Du Pipeline Méditerranée Rhone (Spmr)
• Sté Francaise Du Pipe Line Du Jura (Sfplj)
• Sté Industrielle De Cogénération De France (Sicogef)
• Sté Industrielle Et Gazière De Mayotte (Sigma)
• Sté Transports Pétroliers Par Pipeline (Trapil)
• Sté Valmy Défense 17 (Sdv 17)
• Storengy
• Storengy France
• Sudac Air Service
• Teréga
• Totalenergies Ep Tengah
• Totalenergies Lng Angola
• Trans Ethylène
• Transalpes Snc
• Transugil Ethylène (Transugil)
• Transugil Propylene Snc