Air Products plans to deconsolidate its NEOM green hydrogen joint venture by June 30, 2027, removing $8.4 billion in project assets and liabilities from its consolidated balance sheet. The Pennsylvania-based industrial gas supplier will shift to equity method accounting when the Saudi Arabian facility begins commercial operations.
The project ranks among the first mega-scale green hydrogen facilities globally. The plant will produce 650 tons of green hydrogen daily using 4 gigawatts of renewable energy from solar and wind sources in northwest Saudi Arabia. Air Products holds a 33.3% stake alongside Saudi partners ACWA Power and NEOM.
Deconsolidation means Air Products will record only its proportionate share of the venture's net income rather than including all assets and liabilities. The change removes $5.6 billion in project debt from consolidated statements, improving the company's debt-to-equity ratio. Air Products' equity investment totals approximately $2.8 billion.
ACWA Power will manage plant operations while Air Products supplies the technology and offtakes the green ammonia for global distribution. The hydrogen feeds an onsite ammonia production unit designed for easier international transport. Commercial production depends on completing electrolyzer installation across NEOM's 26,500 square kilometer development zone.
The accounting treatment mirrors structures Air Products uses for other large-scale hydrogen projects in development worldwide. Management disclosed the timing in Q1 2025 earnings materials, citing the JV structure and operating agreements as factors triggering the change. Analysts expect enhanced financial metrics without altering economic exposure to the venture.
The NEOM facility's operational timeline positions Saudi Arabia as an early mover in industrial-scale green hydrogen production. The project targets export markets across Europe and Asia where countries are building hydrogen import infrastructure to meet decarbonization goals.
Sources:
1 Yahoo Finance, "Air Products and Chemicals Q1 Earnings Call Highlights" (January 30, 2026)