Smes are faced with cost barriers in purchasing services from Industrial Gas Companies, but these barriers can be minimized through flexible partnership structures. In the case of Linde Group, its standard liquid nitrogen tank lease contract requires a minimum of 50 tons monthly volume, unit price of approximately $0.8 /kg, and for small businesses with annual consumption less than 200 tons, fixed costs represent up to 12% of revenue. But local suppliers such as Matheson Gas in America have introduced 500-liter-capacity micro-storage tank rental installations, monthly rate of $300 + user charge of $0.95/kg, such that small welding shop gas costs dropped to 6%. According to the National Small Business Association, those companies utilizing the “on-demand delivery” model have reduced transport cost from 23% to 9% of total gas spending, but absorb supply volatility at ±15%.
Groundbreaking contract clause provides space for small businesses. France’s Air Liquide has introduced tiered pricing for turnover of under $5m per annum: once the first year of 100 tonnes of gas is up, the over-delivery cost is reduced by 18 per cent, and the $150,000 installation charge is exempted. India’s INOX Gas facilitates food processors to avail 60 per cent of the value of their equipment against gas credit, with the repayment period extending to 24 months and the rate of interest 4 percentage points lower than commercial banks. In China Hangoxygen Group’s “gas hosting” idea, little steel mills are paying a royalty of 0.12 yuan /Nm³ for oxygen without having to invest 20 million yuan upfront in air separation equipment but have to sign a 10-year sole purchase agreement.
Microtech devices are changing the cost dynamics. Germany’s Messer mobile nitrogen production vehicle may be taken to-site within 72 hours, generates 200 Nm³/h of gas, and is 99.5% pure. It is 35% less expensive to lease compared to fixed pipeline supply. Airgas’s mobile CO2 storage vessel (capacity 50kg) has a value of $1,200 and provides the craft breweries with 1.2 tons per week of fermentation needs at a cost saving of 19% relative to centralized purchase and delivery. DAESUNG Industrial Gases’ nano-bubble generator in South Korea was successful in increasing the dissolution efficiency of ozone from 78% to 95%, reducing the consumption of bactericidal gases in small sewage plants by 42%, but the purchase price of equipment is $80,000 and investment return takes approximately 3.2 years.
Government subsidies and industry associations ease financing burdens. The EU REPowerEU initiative provides smes with a 30% rebate on the purchase of green Hydrogen equipment, and the price of the base product (50kW) of the Nel Hydrogen electrolyzer in Norway has been reduced from €250,000 to €175,000. The Ministry of Economy, Trade and Industry of Japan and Taiyo Nippon Sanso have developed a “gas-as-a-service” platform where semiconductor start-ups can lease ultra-high-purity argon Gas by the hour at $45 an hour, 60% less in investment compared to if they had built their own gas cleaning systems. In China’s Ministry of Industry and Information Technology special industrial gas fund, enterprises with a yearly output value of below 30 million yuan may apply for equipment to be depreciated in advance, reducing the tax load of liquid oxygen storage tanks from 8% to 4.5% per year.
Alternative technology routes are upending traditional cost paradigms. FuelCell Energy’s solid oxide electrolyzer (SOEC) reduces power consumption to 3.8 kWh/Nm³ in distributed hydrogen production scenarios, 22% less than centralized alkaline electrolysis, for small-sized hydrogen stations with a daily consumption of 50-100kg. Linde’s HyCO technology uses biomass syngas to produce food-grade CO₂, reducing the radius of gas procurement of the bakery from 300 km to 50 km, and reducing the cost of transportation from 18% to 7%. South Africa AFROX’s liquefied petroleum gas (LPG) hydrogen blending strategy (20% H₂ blending rate) saves fuel by 14% and carbon by 19% for heat treatment companies, but at a one-time burner overhaul cost of $12,000.
The data-driven sharing economy model is gaining strength. Industrial Gas Companies, such as Praxair in the United States, rolled out the “Gas cloud warehouse” platform, in which five small auto parts manufacturing plants share regional liquid argon tanks and dynamically allocate flow in response to real-time demand, reducing average waiting time from 48 hours to 6 hours, and reducing inventory holding costs by 31%. Air Liquide’s blockchain traceability solution in the Netherlands allows small and medium-sized pharmaceutical firms to purchase medical oxygen by order, and certification per batch is reduced from $2,000 to $450 following sharing. China Baosteel Gas industrial gas trading platform information shows that domestic small businesses through group purchase negotiation nitrogen purchase price from 1.2 yuan /Nm³ pressure to 0.88 yuan, but have to accept 72 hours delivery cycle and ±5% quality deviation range.
Risk hedging instruments help control budget volatility. Singapore’s Sembcorp Gas launched a natural gas price index contract, small businesses can hedge the next six months’ helium prices between ±8%, 10% deposit can avoid market price increases’ risk (e.g., 240% volatility of neon price in 2022). If the true buying price of Air Products’ “gas insurance” product in America is more than the budget by 15%, the excess is borne by the insurer by 70%, and the premium amounts to 3.2% of the total gas expenditure. Under the EU Carbon Border Adjustment Mechanism (CBAM), tiny German founds buy carbon credits to hedge industrial gas implicit emissions, and hedging cost per ton of CO₂ equivalent goes down from 30 euros to 22 euros but are taxed with a 0.5 percent commission for futures trading.