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Honeywell’s $1.8 billion LNG deal is the fourth acquisition in 8 months

The energy transition is a battle fought through electrons and molecules. We want green electrons, electricity generated by wind, sun or waves instead of, for example, coal. And we want to store energy in green molecules such as ethanol, hydrogen or those made from food waste. I recently boarded a Japan Airlines flight powered by sustainable aviation fuel (SAF) created from used cooking oil. Fry to fly!

Honeywell CEO and Chairman Vimal Kapur thinks a lot about green molecules. His company is a pioneer in the technology that produces SAF. As Kapur recently told me, “You can’t run an airplane on electricity.” (Not yet perhaps, although Germany’s H2FLY conducted the world’s first pilot flight of an electric aircraft powered by liquid hydrogen.) That’s why he has focused Honeywell on creating SAF and carbon-free molecules like green hydrogen as part of the solution to achieving the energy transition.

It is not the only area where Honeywell plays. Since taking the top job last year, Kapur has adapted the industrial giant’s portfolio around automation, the future of aviation and the energy transition. Yesterday, Honeywell announced the acquisition of Air Products’ liquefied natural gas (LNG) process technology and equipment for $1.8 billion. It is his fourth major acquisition in eight months. Although LNG is not what you would call clean energy, it produces fewer carbon dioxide emissions than coal and oil, making it an important bridge in what Kapur calls the decarbonization journey.

Honeywell can also use LNG to produce hydrogen and carbon dioxide, the latter of which it can capture, liquefy and send to oil companies that can reuse it. The problem is not just the technology but the cost: enabling others to do the right thing. “The energy transition is not easy and it is not cheap,” Kapur said. “We solve financial problems.”

Creating a business case around the transition to a low-carbon economy is at the heart of sustainability. If you want to share your approach and learn from others, consider joining the Fortune Impact Initiative, held in collaboration with our partners at EVERFI from Blackbaud. We meet on October 8th and 9th in Atlanta for conversations led by Kristin Stoller and my other editorial colleagues. You can learn more here.

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Diane Brady
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This edition of CEO Daily was curated by Nicholas Gordon.

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