The chemical industry plays a crucial role in modern society. The ability to leverage innovation, the ability to meet a customer’s needs, the ability to go ahead and leverage at a global scale, and the capabilities to meet the world’s needs are all very prominent today and vital to industrial gases and chemicals.
In this podcast episode, Victoria Meyer speaks with Michael Graff, Chairman and CEO of American Air Liquide Holdings and EVP of the Air Liquide Group. Michael shares leadership, learnings, and insights from more than 30 years in the energy, chemicals, and gas industries.
Topics discussed this week:
- Mike’s origin story and how it has influenced his life and career
- 6 key themes in the evolution of the chemical industry in the past 30 years
- The importance of Innovation
- The role of Hydrogen in sustainability and Net Zero
- Leveraging partnerships and coalitions for a common goal
- Meeting the consumers’ needs around the world
- The continued importance of engineering education
This was an amazing and insightful interview.
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Innovating for a Sustainable Future with Michael Graff of Air Liquide
Welcome back to The Chemical Show. Today, I’m speaking with Michael Graff, who is the Chairman and CEO of American Air Liquide Holdings and is also the EVP of the Air Liquide Group. Michael is in charge of the Americas hub, and is also the chairman of the Board of Airgas. He has over 30 years of experience in the energy, chemicals, and polymers industries. He is here today to bring some insight to us in terms of hydrogen gas and other things. Mike, welcome to The Chemical Show.
It’s great to be here. Thanks for having me, Victoria
I’m glad to have you here. What’s your origin story? How did you get interested in energy and chemicals, and what ultimately brought you to Air Liquide?
It’s probably a combination of things. Like many of us who ended up studying engineering, I had an affinity for math, physics, chemistry, and analytical things. It seemed to excel at that at school. So that’s a part of it. But I actually grew up in Chicago, Southside. I had the benefit of growing up in the city and all the benefits of schooling, activities, and those types of things the city brings. On my dad’s side of the family, we also had a family farm. I spent summers, and I spent long weekends out working on the family farm. You see the world in a different light when you do that. Somehow, I was always naturally inquisitive, trying to understand how things work. Why did it work that way? How do you make that work? How does that happen? Somehow, that combination of the natural aspect of being inquisitive about how the world works, and how things work, along with the fundamentals of all those analytical and scientific principles that are somehow deeply embedded in me drove me into engineering, specifically chemical engineering.
That’s awesome. You launched from that into the chemical industry and into Air Liquide.
I did. I started my career, actually, with Standard Oil of Indiana, which became later known as Amoco. I started in R&D. I was in a group assigned to a think tank called plastic products. Back then, there was a lot of drive and innovation, thinking about how plastics and polymers could enable a lot of things in the world around us. I joined this group that was thinking about some weird concept like a one-piece plastic bottle. We were thinking about how you could develop plastics and polymers that you could use under the hood. So they can handle high temperatures and under extreme conditions, deliver what they needed to. We didn’t know anything about personal computers at the time because nobody really had one. A lot of the things we developed for that. It went into a lot of products that are in use in the world today, like in healthcare and electronics in everyday life and automotive, whatever the case may be. I just kind of evolved. I ended up in engineering, and then I was working more in the refining, and marketing of transportation fuels.
I was able to design and build and then help operate a number of refineries in the old Amoco system. Then, I took on a lot of different roles. I was in planning, I was in finance, and I was in long-term corporate planning for the organization, working for the chairman. I then ended up back and chemicals and I had the chance to operate globally, many of the chemical and polymer businesses in the old Amoco. I leveraged that. I moved to Air Liquide 16 years ago. I’ve been involved in more of the industrial gas space with customers who do many of the same things that I did in the past and many others as well. I have had a chance now to see both in the first part of my career and the second part of my career, how innovation, how deep scientific principles, how the world around us continues to evolve and needs solutions that are embodied in those basic principles who we want to be in the future to be successful in the future to help the world achieve its long term goals.
It’s so interesting as you say that the connectivity between where you started and where you are today and your customers or your suppliers and your suppliers or your customers and it’s a really interconnected world.
It is, absolutely, which makes it fun.
It does, absolutely. What do you see differently? You’ve been in different parts of the industry for a long time. What’s different today versus when you started?
There are probably some similarities, and, definitely, some differences. I think that the ability to leverage innovation, the ability to meet a customer’s needs, the ability to go ahead and leverage at a global scale, and the capabilities to meet the world’s needs are all very prominent today. They were very prominent then. But I think the world has sped up. I think the world has evolved in a way that innovation is ever more key. I think looking at the world’s issues, whether that’s how you address climate change? How do you decarbonize the industry? How do you decarbonize the transportation sector? How do you enable the digital world of tomorrow with all of the digital capabilities to allow that to occur? How do you create better mechanisms for healthcare? How do you do this based on scientific technologies and principles? But all of these things require innovation, and they require ever more rapid development of innovation in the world around us.
So I think that’s one difference. Another big difference is the application of technologies, whether that’s across disciplines or industries. Somehow, everything is evermore integrated. I think that the evolution that we see is not just about one idea from one place that solves this big issue. It requires teams of people. It could be within the same company or from different companies that are able to leverage their strengths, ideas, and innovation and really drive a new solution in the world around us. I think another key thing is customers and patients have always been critically important. But as the world has evolved, I think that whether it’s industry, whether it’s the approach from a healthcare standpoint, this patient or the customer is ever, ever more of a focus. It is the center point of what you want to achieve. It’s not just about I’ve developed something, so maybe you want to buy it and use it.
It’s about developing solutions that are tailored to those individuals, to those companies, to those customers or patients, and ensuring that you leverage all of your capabilities to meet those needs in a safe way, in a reliable way, and in a high-quality way. But a lot of times, especially if we look now at the energy transition, it’s an example, or how do you create the next node from a transistor standpoint? They need solutions, and we bring some of those solutions. I think that the customer-centricity of what we do is even more so than it was. We’re ever more integrated and understanding our customer’s needs and what we can bring to the table. I think another key thing is employees. When I first joined the industry, and when I first started my career, the Information age wasn’t upon us. I think in general, as each generation evolves, the desire to understand not just what we are doing as a company, but more importantly, why? Why do we do what we do? Why do we want to make this change? Why does this occur? Rather than someone just directing something to happen, and everybody taking it as that’s what we need to do. We just move on.
Sustainable Future: The ability to leverage innovation, the ability to meet a customer's needs, the ability to go ahead and leverage at a global scale, and the capabilities to meet the world's needs are all very prominent today. They were also very prominent then. The world has sped up. The world has evolved in a way that innovation is ever more key.
There’s a lot more in-depth understanding and discussion, which has only led us to ever better ways to operate companies, and better ways to work together and bring solutions. So I think that’s different. The career development of employees is very different. When you joined a company years ago, and one day somebody called you into the office and said we got a job for you here and you better take it and that’s what it is. Today, employees own their careers, which is critically important. They develop themselves. We help develop them. But it’s a joint effort and you want to make sure that you hire the right people, but then you develop them. You give them opportunities, you stretch them, and you allow them to achieve what it is they want to achieve in their career. Finally, the last point is the relationship with the community.
I think that as a company, Air Liquide, for example, has always worked hard to be a part of the community. We’ve always had a sustainable DNA or a sustainable backbone to our culture. But if you just think about how things have evolved in industry, in general, over time, the vernacular was anything goes, and I’ve just meant a general society or whatever it is. Today, I think people are very concerned about what happens in my community. People are very concerned about whether you are a good citizen if they’re going to build a facility and if you’re going to operate my community. Are you giving back to the community? Are you engaged in the community? Do you leverage the community? Do you create opportunities for the people in our community? I think all of those things are first and foremost, in our minds, certainly, as we do things that are key, but I’ve seen that evolve over time. I think that the relationship between the company and the community, being a good citizen in the community, and a good corporate citizen, has really evolved in a very positive way.
That’s awesome. That was a lot there to unpack. But what I think is really interesting, what I draw from that is business becomes a lot more personal. It’s really this recognition of individual needs, customer needs, the why behind employees, the why behind the customers, and what they need, and the why in the community, and creating that connectivity and personalization. It’s really to make that collaboration and the fact that we’re actually all part of the same ecosystem. It’s important.
Let’s talk a little bit about sustainability and net zero. I know that this is a big part of the industry. It’s on everybody’s minds today. I think in a lot of ways, the way that the industry is responding to sustainability and net zero has moved companies like Air Liquid, from kind of “boring industrials” to central solution providers. It could be the driver of the energy transition when we look at things like hydrogen for mobility and other things. What’s your Air Liquide’s approach? What’s central to Air Liquide when we think about the world that we’re in today with sustainability and net zero?
First of all, I never thought about anything being boring in the past. It may feel that way to many. But it comes back to something I mentioned before about the world around us, especially from an early perspective, trying to understand the needs of the world around us. It’s not just today’s needs, which we work really hard to make sure we meet each and every day for our customers and our patients, but in order to think about the future. As I mentioned before, the digital age, and where that goes, better health care, and clearly, climate change, and the energy transition, is top of mind. I actually think that the focus on all three of those areas, while it was prominent, just a few years ago, somehow accelerated during COVID. I don’t know if people had a chance to contemplate the world around them and themselves, and all of a sudden, they were a furnace of healthcare, which became ever more acute, and the need to connect digitally became evermore important.The world has evolved in a way that innovation is ever more key. Click To Tweet
All of a sudden, where they live and the environment around them became ever more important. But all of those things are clearly something that evolved in a very strong way. First of all, I mentioned this before, I think Air Liquide has always had a very sustainable approach in how we think about the company itself, how we act within the communities in which we operate, and how we meet our customers or our patient’s needs. It’s always kind of been foundational in the company. Certainly, you’ve got to have good financial returns to grow, and that’s part of sustainability. But we were always trying to think of what the world may require and how can our technologies help enable that or what technologies we need to develop that make sense for us to develop to be a part of that. We have seen that happen over time.
Over 120 years, basically, two individuals working in a garage or a warehouse outside of Paris, developed the first commercially viable way to separate the air you and I are breathing and liquefy. That was the beginning of oxo-acetylene torch cutting and welding. Up until then, metals were hard to cut. If you wanted to join two pieces of metal together, you used rivets. It’s not that the Industrial age happened because that’s what we were part of. We were part of contributing to that. With all of these types of things, whether that was how our large industries business that serves the big commodity industries like refining, chemicals, and steel evolved over time, whether it’s in manufacturing, whether it’s in semiconductors, whether it’s in healthcare, we were always able to develop new technologies and new capabilities today with climate change.
If we think of our goal to Net Zero, as a country we want to be there by 2050, if we are going to achieve that, we need to have the technological capabilities. We need to be able to build at scale today. In the end, it’s about the solutions. It starts with Air Liquide having this broad portfolio of technologies. We have the ability to produce hydrogen via any route necessary. We can take any sort of hydrocarbon. We can convert that into hydrogen, and we have state-of-the-art carbon capture technologies to capture almost all of the CO2 that’s generated that you can then sequester or use elsewhere. We also have all the technologies to utilize, whether it’s solar or wind power, whether it’s hydroelectric power from a dam in a variety of different electrolyzer technologies to go ahead and produce truly renewable hydrogen, unlike the first industrial-scale electrolyzer that we built some three years ago. Now, it is operating well, up and back in Canada, utilizing power from Niagara Falls, and demonstrating that you can do this at an industrial scale and make it work. But we’ve also developed the technologies to take off gas from a landfill, utilizing our membrane technologies.
We convert that to renewable natural gas or biogas and then convert that to renewable hydrogen. We’ve got all those technologies. We’ve got all the capabilities and the proven ability that we demonstrate each and every day to transport hydrogen by a pipeline, via a tow trailer as a liquid. We have state-of-the-art technologies for liquefaction, and we have state-of-the-art technologies for every type of carbon capture you might imagine. Right now, people are trying to figure out if I want to decarbonize my industry, if I want to decarbonize my site, how do I go about that? In we’re able to go in given the breadth of all these technologies, and bring solutions in and help them understand, first of all, what they need to consider in order to achieve that, and then to implement it.
Similarly, with the transportation sector, if we are going to decarbonize the transportation sector, we’ve got to do a lot of things in terms of how we go ahead and drive mobility to zero emission. And a lot of that, utilizing hydrogen fuel cells can be accomplished. In the end, the energy transition itself will not occur only because of hydrogen. But the energy transition will not happen without hydrogen. If you look at the focus on the world around us, I think the estimates are by 2050, roughly 20% of all of the energy needs of the world will be met by hydrogen. That’s industry, that’s mobility that can even be grid backup. So I think whether it’s on carbon capture or hydrogen, the sustainability mindset we’ve always had and we are now in a place where we can deliver that. The good thing is it’s not a wish list of things we could do. We have already demonstrated all of these technologies at scale. So we know they work.
Sustainable Future: There's a lot more in-depth understanding and discussion, which has only led us to ever better ways to operate companies, and better ways to work together and bring solutions. So the career development of employees is very different.
It’s a matter of deploying them. Our customers and consumers are ready for this. It strikes me that we’ve got some ambitious goals as a country. Air Liquide has its ambitious goals. When you look across the value chain, it kind of all has to be in sync for it to really come to fruition. I guess the question is, how do we get the value chain in sync so that we can realize it and so that Air Liquide can realize its ambitions?
There’s no magic bullet here. But let’s think about some of the things that have to happen. First of all, you need to have like-minded companies and like-minded industries working together. As I mentioned before, to bring technologies and to bring capabilities to the table, it’s not just how you produce your needs from a fueling standpoint, like hydrogen. But what are the applications to use that? How do you deliver those at scale to make those successful? So I think it takes a lot of like-minded companies. For example, we started the hydrogen council some six years ago. We joined with Toyota because we both shared a view of what hydrogen could mean in the future. Now, I think we have over 120 companies jointly working within this hydrogen council on how you develop things. I think another key thing, though, is the recognition that in order to make a change, in order to make this happen, and in order to deliver it, it requires new infrastructure. It requires new capabilities that require investment in these facilities. And in order to achieve that, we need to have the incentives to make that work.
We need to have the policies to make that work. In my mind, it’s going to take smart climate policy, as we see with the IRA. We’ve seen some elements of the bipartisan infrastructure bill, and go ahead and help drive some of those incentives. You see something very similar in Europe, and you see some of that evolving in countries like Japan, or Korea, where these kinds of things are evolving. Then, it really takes to promote the technologies to continue the innovation, public-private partnerships, where it’s not just companies in the government, but universities and other think tanks that are all collaborating. I think what we see right now are ecosystems being built, both around knowledge and around innovation, but then geographic ecosystems that recognize the basic inherent resources in needs within a given geography, and then determine the solutions that will allow you to best meet those goals of net zero for those communities, and for those regions in a very positive way.
It’s a challenge that takes a lot of people. So getting these coalitions and these entities aligned, is going to be part of the process.
That’s exactly right. We’ve been in the hydrogen business for over 60 years. We have been very driven, and it is part of all this to leverage that experience. We’ve already made commitments for over $10 billion that will invest to continue to grow hydrogen in the coming years, and those numbers only continue to grow. I think everybody is looking at that saying, what can we do? How can we make this work? But I think the other point that you are driving at is for the consumers and for their needs. At the end of the day, energy needs to be met for the world around us. Our energy needs only continue to grow. We’re more efficient. For a specific plant or for a specific need, you can make that more efficient.
But in the aggregate, the world’s energy needs as we think about everything in the world that revolves around energy, even the digital world requires enormous amounts of energy in order to go ahead and function, then only continues to grow. At first, all of these energy sources are additive. As you build to scale and you create more structure, then certain new opportunities will become ever more prominent in that mix. At the end of the day, people want energy. They want it to be available when they need it. It’s going to be affordable, and they want it to be cleaner. It’s going to meet the needs of everybody, every community out there. I think those are the kind of goals we have to get ourselves to that place.
Awesome! So I’m going to circle in a little bit on the customers. You talked earlier about what are the differences in the industry today. It is just kind of this alignment to the customers and their needs, etc. We talk a lot about the customer experience. What’s critical to Air Liquide and its customers, when you think about the experience and why companies do business with you? Why do your customers want to keep doing business with Air Liquide and partnering?
I think it’s multifocal. You probably ought to talk to our customers to get the real answer. But I think that the reality is this. First of all, our customers look to us to meet their needs in a safe way, in a reliable way, and in a high-quality way. That is very clear. As things have evolved, I would add a sustainable way. So you got those four basic components that our customers really look for, as we look to meet their needs or our patients for that matter. I think the next thing is to bring innovative solutions to bear to help them because in this world, as things have evolved, whether that’s some of the things we just talked about climate change, if someone is looking to understand how they decarbonize their industry or their site, to the point I made earlier, we bring those solutions. It’s not just we bring a product.
So we need to bring innovation. We need to bring those solutions to our customers and our patients look to us to do that. Similarly, our customers are very interested in securitizing because we have a lot of global customer supply chains around the world. Coming back to that reliability piece, it’s not just I meet your needs from this plant to this plant every day. But if they are going to be successful in the future, and they are going to deploy their capabilities and their technologies globally, then they want to make sure those supply chains are secure. They want to make sure that they can rely on you each and every day. I think there’s a variety of things that our customers look for. In the end, as well, I think the digital connectivity between all of us opens doors for even better ways to connect and for even better ways to do things. We certainly leverage that as well.People need solutions, and we bring some of those solutions. Click To Tweet
Digital is certainly driving that in a lot of different places. When we will look at what’s going on in the world today, there’s a lot of banking uncertainty with SVB, Credit Suisse, etc. Industries and companies continue to be concerned about inflation. There are a lot of things going on. You’ve led businesses through several cycles. What do you find critical to navigating these ups and downs? I know that you’re looking at these and as you Air Liquide, you’re looking at how you lead through these cycles, what’s critical to you?
Clearly, the external world is ever-evolving. You need to have a very open mind and a close eye on what’s evolving in the world around us. We need to really understand our customer’s needs, and we need to understand where markets are going. We’re in 75 countries around the world. So we need to understand what’s happening within each of those countries, the political environment, and the inherent risk involved in different plays. We’re always trying to understand what’s going on in the world around us. But in the end, you leverage your innovations and your capabilities, as I mentioned before, to meet the world’s needs. You need to pick and choose how you deploy those, how you invest, and how you will manage that. But in the end, for a company like Air Liquide to be around for about 120 years, and go through as many cycles, wars, depressions, and recessions as we have, first of all, you have to make sure you control your cost base.
You have to recognize that you don’t control the external environment, you don’t control markets, and you don’t control the latest decision that’s going to happen in a given country, or whatever the case may be. You plan for what could be, but you do your best on those types of things. So in the end, you need to control those things you can control. So it’s cost, its reliability, it’s how you help your employees, develop your employees, and make sure you’re always close to your customers, and what their needs are. And you stay very integrated and ingrained with the community. You are in this unusual place today where whether it’s with the war in Ukraine, and how that’s changed the environment within Europe, looking at energy, looking at the industry, and looking at a variety of things, whether it’s SVB, and other concerns about the banking sector, whether it’s other concerns about what’s happening in economies or political situations in the world around us.
At the end of the day, you have to be aware of all those things, but then you have to manage what you can, and control what you know you’re not in control of. Then, make sure you stay very close with your customers, that you understand their needs, that you’re helping them with solutions, and that you make sure your patient’s needs are met each and every day. I think COVID was the perfect example of that, where suddenly healthcare was prominent on everyone’s mind. It’s unusual, maybe for an industrial company. 20% of our revenue base is healthcare. We’re the world’s largest medical oxygen provider. Suddenly, in COVID, with the focus on the need for medical oxygen, everywhere in the world, in order to help patients survive COVID, we were front and center and we had to be very attuned to what was happening. We saw how it evolved around the world, and we continue to learn from that everywhere around the world as it evolved.
So that we were evermore prepared, we were able to go ahead and significantly increase the production of medical oxygen, and certainly do that in advance once we knew what was going to happen and leverage our logistics assets and our capabilities to the right places in order to make that available to save patient’s lives. There’s where you had to be in tune with everything happening in the world. You had to be in tune with your patient’s needs. And you had to figure out how to do things that people never thought of before in order to meet those needs. We not only did that in the geographic centers in Western Europe, North America, and in Asia, but we went into third-world countries. We found ways to get the medical oxygen needs into the Amazonian. We found ways to go ahead and work in the outreaches of the country of India, joint with the State Department in order to go ahead and project that. So there are a lot of things that are happening in the world around us. We have to be quick. We have to be nimble, but we have to leverage our strengths in order to be successful.
Absolutely! You have obviously done that in your global reach and your global connectivity. Here’s one final question. I know we need to wrap it up and get you back into the rest of your day. When we circle back to your origin story, you’ve stayed very connected to your alma mater, IIT, which you and I both share. You sit on the Board of Trustees. You’ve stayed connected to chemical engineering. It is a profession. I know you’ve recently received the Agile Award from the American Institute of Chemical Engineers. Why is staying connected to education and engineering important to you?
I think in general, it’s critically important because I truly believe, probably not a surprise, given everything I just talked about, at the benefits, that engineering principles, engineering approaches to solving problems, and the many things that we have developed, whether that’s from an engineering standpoint, from an industry standpoint, whatever the case may be, how they contribute to the world, and how they contribute to meet the world’s needs over time. I think STEM itself is critically important. I believe in the world around us, you have to find a way to continue to encourage that in a way to enable that in general. The second thing I would say Illinois Tech is now in a place where it continues its own heritage. One of the basic founding principles of the school was to create an opportunity for those that never had an opportunity to go to college before to go to college, to study at a university. I’m one of those. I’m the first person in my family that ever went to college and ever graduated from college tonight. I’m living proof that you can do it. I benefited from Illinois Tech.
I benefited from the Chicago area ecosystem where I was able to get a good education. But at the same time, I was able to work because I had to support things, in terms of some of the things that were happening back then or in my own life, and pay my way through school and do those things. But in the end, you want to get back.. You want to create that same opportunity for someone else, who is not in a place to be able to go to school to get that opportunity because they just need the opportunity. They need the chance. It’s promoting the capabilities, the scientific developments, and the engineering developments in the world around us because we need them. It’s about creating pathways of opportunity for the students for the future. I do the same thing with Purdue, maybe in a different way because that’s where I went to graduate school. I’m very involved there. I’m curriculum lead and support some of the things they do just like I do at Illinois Tech.Today, employees own their careers, which is critically important. Click To Tweet
I think you need to get back into the community around you as well. We give back as a company in STEM all the time. I’m a firm believer in literacy. We’re very involved with Barbara Bush, when she was first lady started a literacy campaign, which is now prevalent across the country, and very involved in supporting literacy. But just creating opportunities at the university structure. Even as a company, there are those who may not want to study at university, and they may not want to get a college degree, but how do you create opportunities for them? We’ve worked there you know. Now, we’ve helped to restart shop classes and welding classes in 30 high schools across the country.
It’s great because we have this in-depth knowledge of welding given our history. With all of these capabilities, we’re able to go back into those schools. We’re able to bring the educational capabilities, we’re able to bring the know-how, and we’re able to bring the materials they need to go ahead and learn with the gases, the welding rods, the machines, and that sort of thing. At the end of the day, you’re allowing others that want to pursue a different type of career to have a value-added opportunity for their own career and creating in a balance of things an opportunity for everyone. I think that’s critically important in the world around us.
Absolutely! Mike, thank you. It’s been really great talking with you today. I appreciate you sharing your time, your points of view, and your story here with us on The Chemical Show
Thank you, Victoria. Thanks to everybody for listening.
Thanks, everyone for listening, and we’ll talk again soon.
- American Air Liquid
- Air Liquide Group
- Agile Award from the American Institute of Chemical Engineers
About Michael Graff:
Michael Graff joined Air Liquide in 2007. He is currently Executive Vice President of Air Liquide Group, in charge of the Americas hub, and chairman of the Board of Airgas. He is also responsible for the Electronics business line and supervises the Group’s Engineering and Construction activity.
He is a senior executive with over 30 years of experience in the energy, chemicals, and polymers industries across the Americas, Asia, and Europe. He began his career with Amoco and BP, plc, and then served as president or CEO of several global chemical and polymer businesses. Michael Graff’s educational background is in chemical engineering, business, and executive management.
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