Chief Operating Officer at Linde
Thank you, Steve. I'm honored to be given the opportunity to lead this outstanding company into the future. I appreciate your confidence and support over the years. Before I jump into the slides, I wanted to build on Steve's comment of a seamless leadership transition. Here at Linde, we are proud of our industry leading performance, which starts with living our core values while maintaining a disciplined execution culture. As CEO, I fully intend to build upon our foundation. My focus will be on areas that are aligned with the interest of our shareholders: profitable growth, optimize the business, cash generation and, of course, the truth serum for our industry, ROC. Linde will remain focused on the things that create value for Linde owners such as strong pricing and productivity culture, an active commitment to sustainability, a disciplined investment philosophy, a shareholder friendly capital policy, and of course, pursuing high quality and sustainable growth initiatives with emphasis on ROC. Ultimately, it's about being the best performing industrial gases and engineering company in the world. Stated differently, you can expect a seamless transition with minimal change. Now with that said, let's move on to slide three for an update on our growth initiatives. Last quarter, I mentioned some key growth drivers, including the secured project backlog, accretive base capex investments and the strength of our growth in low capital intensity areas such as health care, food and beverage, engineering and our packaged gas business. Today, I'm happy to report that our project backlog has increased from $7.5 billion to $13.4 billion or up 81% sequentially from the last quarter. You will recall, this backlog only includes contractually secured incremental growth with fixed payments to ensure targeted returns. We're also beginning to see a return of the capital cycle, especially in upstream operations, such as natural gas production that bodes well for our overall pipeline of opportunities. On top of that, the electronics sector continues to be very active. We recently announced a $600 million investment, sale of gas investment indeed to supply a world class fab in Phoenix, Arizona. This will supply only the first phase of this project, and we expect to see further opportunities as that area builds out. Overall, I'm pleased to see how the entire Linde team has come together and is leveraging our combined strengths to secure high quality growth opportunities through our leading high density industrial gas network combined with the world class engineering capabilities. This backlog, combined with our supply network density, enables profitable and secured growth for years to come.
Now before moving to the quarterly results, I want to update you on Linde's new and more ambitious greenhouse gas emission goals. A good way to stop this is to first explain the role our products play in people's lives and the overall economy. You'll find this on slide four. We make products that are critical for society, products such as medical oxygen for hospitals, ultra high purity nitrogen for semiconductors, liquid nitrogen for food freezing, krypton to insulate windows and hydrogen to produce cleaner fuels to give you just a few examples. In order to make these products, we expect to have a total of 39 million metric tons of Scope one and Scope two emissions this year. As you know, the production of gases require significant amounts of electricity. When such electricity is generated using hydrocarbons, we're penalized for those indirect emissions called Scope two emissions. We also have Scope one emissions, which are significantly lower than our Scope two emissions, but are significant nonetheless. Now these emissions are largely as a result of using natural gas to make hydrogen, which is used by refiners to produce cleaner fuels. Our gases play a critical role in the economy. In addition to saving lives, improving energy efficiency, increasing shelf life, our products also help our customers eliminate or reduce greenhouse gas emissions. In 2020, we generated a total of 37 million metric tons of emissions to make products that helped our customers avoid more than twice our emissions or 85 million metric tons of CO2 equivalent. In other words, without Linde's products, there would be significantly higher net carbon emissions in our world. At Linde, we have been doing our part to support our planet for many decades, but we know we need to do more.
In 2019, we set a goal to reduce the carbon intensity of Linde 35% by 2028. We are well ahead of that goal and expect to exceed it, which is, of course, good news. But an intensity goal doesn't fully address the absolute Scope one and Scope two emissions. So we are determined to continue on our mission of making our world more productive, enabling our customers to decarbonize and commit to reducing our own carbon footprint. With that in mind, I'd like to announce Linde's new medium and long term emission goals, which you will find on slide five. The first goal is to achieve a 35% reduction in our Scope one and Scope two emissions by the year 2035 or simply 35 by 35. To achieve this goal, we must materially reduce our Scope one emissions, which are driven by hydrogen production. We will do this by focusing our efforts on carbon capture and sequestration, developing blue and green hydrogen production and progressively transitioning to a zero emission fleet. Our Scope two emissions are related to electricity consumption. Today, we consume approximately 45 terawatt hours of power, a 1/3 of which is from renewable and low carbon sources. In order to achieve the 35 by 35 goal, we will triple, triple our renewable and low carbon power sourcing by 2035 through new PPAs and by supporting renewable energy projects with offtake agreements and even co-investment. To put this goal in perspective, the amount of renewable energy we were planned to purchase is equivalent of all the power consumed annually in New York City. That's a big number.
Of course, in addition to that, we will continue improving the energy efficiency of our plants as well. These goals are being embedded across the entire global organization, being reviewed as part of our operating rhythm and will be incorporated into our annual variable compensation. This is what gives me the confidence in our ability to deliver these goals, which is no different than how we would approach anything of importance in our company. Now in addition to the 35 by 35 goal, we are also committed to pursuing our goal of becoming climate-neutral by 2050. We will do our part to achieve this goal, but we also need strong policy support and regulatory support. Let me summarize this journey on slide six. We have defined a road map to reach climate neutrality. The road map is underpinned by numerous initiatives and milestones, which will be embedded into our operating system, providing us the greatest opportunity for success. Going forward, we will continue to share our progress, ensuring accountability and transparency for our stakeholders. I'll now turn it over to Matt to walk you through the numbers.