(The Center Square) – Air Products and Chemicals, Inc. announced Tuesday it will not proceed with development of the Louisiana Clean Energy Complex, the company’s proposed multi-billion-dollar blue hydrogen and carbon capture project in Ascension Parish.
The Allentown, Pennsylvania-based company is abandoning the project after determining the long-term financial returns would fail to meet corporate profit targets. In a news release, Air Products stated that “challenging commercial conditions, project-specific economic factors, and slower-than-expected development in certain markets” forced the cancellation.
When announcing the project in 2021, Air Products originally estimated construction costs at $4.5 billion, but disclosures by joint venture partner Yara International in 2025 revealed total investment had ballooned to between $8 billion and $9 billion. Yara confirmed Tuesday it declined to acquire the ammonia production assets associated with the project, choosing instead to reallocate capital to other U.S. investments.
Plans for the Ascension Parish complex included piping captured carbon dioxide to a storage site about a mile beneath Lake Maurepas, near New Orleans. Environmental groups and residents of the River Parishes vehemently fought project infrastructure, launching legal battles over pipeline easements, geological safety concerns, and the preservation of the surrounding wildlife management area.
Livingston Parish President Randy Delatte called the project’s cancellation “welcome news” for local communities. “Today’s decision reflects what our residents have consistently said from the start: they do not want Carbon Capture and Storage beneath Lake Maurepas,” Delatte said in a statement.
Rural Roots Louisiana President Ashley Gaignard said the Air Product’s decision marks an important moment for local advocacy and could push state leaders to re-evaluate policies that fast-track project approvals.
While Gaignard noted that Air Products said the decision was based strictly on financial considerations, she told The Center Square that local pushback increased the project’s risk profile.
“We do believe that the sustained advocacy of residents and organizations across the River Parishes helped ensure that the project’s environmental, public health, and economic impacts received the public scrutiny they deserved,” Gaignard said.
Ascension Parish President Clint Cointment called the cancellation a major blow to local economic development efforts. “This is a tough day for Ascension Parish and for Louisiana,” Cointment said in a statement, adding that the cancellation means the loss of thousands of jobs and billions of dollars in potential investment.
The Louisiana Clean Energy Complex project was in line to receive 45Q federal tax credits of up to $85 for each ton of carbon buried. The 45Q credits generated annually were estimated at $425 million, or $5.1 billion over a 12-year investment horizon.
In November 2025, ExxonMobil froze investment at its world-scale blue hydrogen production facility in Baytown, Texas, citing “weak customer demand” and an unsupportive policy environment. ExxonMobil Chief Executive Darren Woods noted at the time that potential buyers were resisting the higher cost of hydrogen fuel.
Energy sector analysts estimate that buyers of blue hydrogen pay what often amounts to a 30% to 33% price premium for the low-carbon energy.
“Legitimate economic issues existed, but what likely killed the deal was the anticipation of further delays and another round of lawsuits,” Tulane Energy Institute Associate Director Eric Smith told The Center Square. He attributed the project’s cancellation to a Louisiana state legislature that remains non-committal to carbon capture, a federal administration antagonistic to these types of clean energy projects, and ineffective corporate public relations.
“Even with the legislative give-and-take, at the end of the day Air Products likely decided they would be better off starting fresh in a new location where people will be more supportive,” Smith said.
Air Products’ current CEO, Eduardo Menezes, halted spending on the Louisiana project in May 2025 shortly after taking the helm. He succeeded former CEO Seifi Ghasemi, who had faced intense criticism from investors concerned over the firm’s financial risk exposure to high-dollar clean hydrogen projects.
At the state level, Louisiana Economic Development structures its economic incentive packages on a pay-for-performance model. Because these agreements require a company to meet operational milestones and hiring targets before receiving state funds, no taxpayer dollars were disbursed before the project’s cancellation.
Air Products operates 18 industrial gas facilities in Louisiana and a hydrogen pipeline network that serves oil refineries along the U.S. Gulf Coast. The company said Tuesday that it will also discontinue a zero-carbon liquid hydrogen facility in Casa Grande, Arizona, and other smaller scale distribution projects.