Good morning and welcome to the Chart Industries Inc Ino rganic Investments Update call. All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question-and-answer session. A telephone replay of today's broadcast will be available for the conclusion of the call until Tuesday, December 22nd, 2020. The replay information is contained in the company's press release. Before we begin, the company would like to remind you that statements made during this call that are not historical, in fact, are forward-looking statements. Please refer to the information regarding forward-looking statements and risk factors included in the company's latest SEC filings. The company undertakes no obligations to update publicly or revise any forward-looking statements. I would now like to hand the conference over to Jill Evanko, Chart Industries CEO.
Thanks, Sarah. Good morning, everyone, and thanks for joining on short notice for our update on two strategic transactions announced today, both of which further our unique product technology and commercial position in clean energy applications and specialty products and markets. We'll walk through supplemental deck released this morning starting on slide three. Yesterday, we completed an investment in HTEC Hydrogen Technology and Energy Corporation for CAD 20 million for 15.6% ownership. HTEC designs, builds, and operates hydrogen fuel supply solutions to support the deployment of hydrogen fuel cell electric vehicles. It has significant hydrogen development experience in the Canadian market with signed contracts for numerous projects across the country. In conjunction with this investment, we signed a commercial agreement which furthers our equipment penetration in Canada and with multiple blue-chip customers of HTEC. I'll share specifics in a few moments on that.
Additionally, today we announced the signing of an exclusive letter of intent to acquire Sustainable Energy Solutions Inc, which I will refer to throughout my remarks as SES. The acquisition is expected to close in the next 30 days for cash of $20 million and an associated earn-out structure. SES's Cryogenic Carbon Capture, or CCC technology, eliminates most emissions from fossil fuels while enabling better use of intermittent renewables through grid-scale energy storage. Coupling SES's CCC technology with our air-cooled heat exchangers, brazed aluminum heat exchangers, IPSMR refrigeration and liquefaction system, as well as cryogenic storage and transport equipment, creates a one-stop full solution option for those looking for integrated technology and equipment for cryogenic carbon capture utilization and storage.
As many of you know, our strategy is to continue to have the broadest product and technology offering for energy and industrial gas applications, and we expect the clean energy transition and destination to be a hybrid of multiple molecules and solutions. What sets us apart is that we are molecule agnostic and have equipment and solutions that address LNG, CNG, hydrogen, biogas, carbon capture, and water, to name just a few, and even more unique is our current offering touches on the interlinkages of the clean energy, clean water, clean food, clean industrial nexuses that are becoming more and more evident. So today, we continue to build on that strategy, and what is happening in the market lately furthers our expectation that our clean energy, specialty products, and repair and service businesses will grow over 10% each over the next three years.
Here's a few more recent data points in case you aren't convinced, all of which demonstrate the unique position Chart has in the clean energy space. Last week, the California Energy Commission approved a plan that will invest up to $150 million to significantly increase the number of fueling stations in the state that support hydrogen fuel cell electric vehicles. The funding nearly doubles that state's investment to date. With this plan, up to 111 new hydrogen fueling stations will be built in California by 2027. In conjunction with this, on December 9th, commissioners awarded three grants totaling $25 million for the installation of the first 30 stations under the plan. FirstElement Fuel, one of our key partners and customers, received $15.5 million and also received an additional $5 million of funding from the Volkswagen Environmental Mitigation Trust.
So fine, you say, so what? Show us meaning and numbers. Fourth quarter to date, so October 1st through December 11th, we have booked over $18 million of hydrogen-related orders. This is an 85% sequential increase over the third quarter of 2020, and when you look at the second half of 2020 to date, we are up 393% over the first half of 2020 for hydrogen-related orders, which isn't surprising because May of this year was when the hydrogen switch flipped. I also really like the fact that Q4's orders in hydrogen are split between the EU and North America evenly, as well as split between gaseous and liquid fairly evenly.
Add to that that we are now working with 132 hydrogen customers compared to about 30 in early Q2, and if you remember, we started the second quarter with four NDAs related to hydrogen work, and now we have 44 under which we are working. Sustainability is the overarching macro trend driving such high growth in these spaces. What I find interesting is that the tailwinds shown on slide four are common to hydrogen, common to carbon capture, common to all of the greener options we have equipment and solutions for. I won't spend much more time on this slide, but the bottom line is that government and private industry carbon neutrality targets will not be accomplished without a combination or hybrid of solutions inclusive of carbon capture.
If you look back at prior presentations from earlier this year, the left-hand side of slide five would have far fewer flags on it. That's because in 2020, 17 countries have announced or made revisions to their clean energy targets, with many announcing carbon neutrality by 2050 or sooner. Now you even have South Korea and Japan in that category. Canada is one of the countries that has this target. As the Natural Resources Minister of Canada said recently, if Canada is going to continue to prosper, we've got to skate where the puck is going. Hydrogen is where the puck is going. Last month, the Alberta government released a natural gas strategy that includes the development of a hydrogen supply chain starting with the production of fuel from natural gas while capturing and sequestering carbon emissions. Perfect for Chart, HTEC, and SES.
In addition to provincial governments committing substantial funding to boosting the hydrogen fuel sector, the Canadian federal government is set to release their national hydrogen strategy before year-end. Check out the forecasted growth in the next three years on slide six, and this is just in the liquid hydrogen production facilities, fueling stations, and hydrogen vehicles. As you know, the hydrogen market is much more expansive than what is shown here, but this alone is very convincing. So with our existing product offering, how do we ensure we are getting access to as many geographies and customers as possible and do so very quickly? In addition to multiple organic facets of our strategy to accomplish those goals, we also have set those goals as the foundation of our two tenets of inorganic investment and acquisitions.
First, the investment has to bring access to customers and commercial projects that could not be readily accessed without significant organic investment, and second, the investment brings access to regions and geographies for the respective products and applications that, again, otherwise could not readily be accessed due to lack of product experience in the region, certification requirements, or government funding and relationships. That's why we did this CAD 20 million investment for nearly 15% ownership in HTEC. We love the established relationship that HTEC has with the Canadian government, as well as our existing station network that is inclusive of the first heavy-duty fueling station under construction in Alberta, one data point shown on slide seven.
We expect more combination passenger and heavy-duty stations to pop up in the coming years, and this is a geographic agnostic comment across the board because there will need to be stations that can accommodate the long-haul trucks that are being developed, in many cases utilizing liquid hydrogen. HTEC has a strategic position in the Canadian hydrogen market unlike any other, covering British Columbia, Alberta, and Quebec, with everything in between. With this investment comes a binding commercial agreement, and we're very excited about our expanding equipment into this growing Canadian market with customers such as the ones you see on the left-hand side of slide eight. The Chart HTEC commercial MOU brings us access to customers that we historically have not worked with in hydrogen applications and also customers that are dedicated to participating in hydrogen, such as 7-Eleven and Honda.
Interlinkages are key between clean solutions, but also between our investments, and this investment builds on the combination of Chart and McPhy and HTEC together, as you can see on the right-hand side of the slide. We expect significant hydrogen fueling station development across Canada in the coming few years, and while type sizes and designs vary, Chart content ranges from $1.2 million per station to just over $2 million per station. In addition to what we described HTEC bringing, we see strong potential for more Chart equipment being pulled through into Canada as a result of this relationship, including our carbon capture offering. As you can see on slide nine, carbon capture plays a distinct part in the accomplishment of carbon neutrality over the coming decades, and with the addition of SES to the Chart family, we will be very well positioned in this space.
But before we get into SES specifics, what do I mean about the Canada comment on the interlinkages? Well, two of the more significant new carbon capture projects in the last year were in Alberta, Canada. One, the Alberta Carbon Trunk Line, a 14.6 MTPA capacity facility capturing carbon from the Sturgeon Refinery and Nutrien Fertilizer Plant to be stored in EOR. The other, Quest CCS in Alberta, which produces 900 tons per day of hydrogen and has stored five plus million tons of CO2. So it's clearly evident, and we previously have discussed slide 10 of the overlap and potential between CCUSs and hydrogen generation depending on the color. The other connection with carbon capture is water treatment, as shown on slide 11. We spent hours talking about the various carbon capture and utilization opportunities.
The nexus of energy and water is a key part of our strategy, and CCUSs are another example of how they are linked. Wastewater is generated everywhere there is human activity. In fact, apparently I've used a lot of water with all the jeans I've bought, so you can plant that on slide 11. In many cases, wastewater treatment plants are the largest energy consumers in the state and could account for 3% of global energy consumption if we continue to treat water with conventional technologies, which is where our very own Blue and Green comes in to improve that statistic. But this can also be harnessed. The chemical energy embedded in wastewater is estimated to be more than nine times that required to treat it.
Couple that with the fact that carbon capture can occur within existing wastewater infrastructure during treatment, and typically these plants are located very close to industrial CO2 end users, and there you have it, another combination opportunity for Chart equipment and processes, including Blue and Green and SES together. Slide 12 provides an overview of what carbon capture is and does. In a few moments, I'll go into the differences of the types of capture and the content for Chart equipment and SES technology together. Before we do that, why now? Why is this happening now and accelerating now? It's fairly evident that what's happening both from a public sector standpoint as well as private industry investments into the carbon capture space, that governments and the market are ready now for this to be a breakthrough area in the energy transition, as shown on Slide 13.
Take a step back to 2007 and 2008, when federal funding in the U.S. was there for them, including over $1 billion of funding to develop a CCUS site in Illinois. But at that time, the messaging was about strategies for sustaining the individual state's energy economies and intentionally was not about climate policy per se. Fast forward to 2018, when Congress passed an expansion of the federal carbon capture program, more than doubling the tax credit for carbon capture and storage. Couple this with the fact that carbon reduction or neutrality targets cannot be accomplished without carbon capture, period. Every industry is responsible for 20% of global emissions, and 70% of the emissions in China, Europe, and the U.S. are within 100 km of potential storage sites. As you know, we provide equipment to all aspects of the value chain, and CO2 is no exception to that.
On the point I just made around heavy industry. Other industries and applications use CO2 as well. Slide 14 shows this. Our equipment is used for CO2 in food and beverage, all the way through to cannabis and dry ice for vaccine storage and firefighting. The common denominator here is the equipment stores CO2. These applications all require CO2, and this year we saw a CO2 shortage. So yes, there are other benefits to carbon capture, storage, and reutilization into these types of applications. It is important to understand the types of carbon and air capture processes to understand which ones will be used where, as you can see on slide 15. Post-combustion CO2 capture processes can use cryogenic processes that deliver pure liquid CO2 ready for use, or amine processes that deliver gaseous CO2.
These are referred to generally as carbon capture processes and are typically used when capturing CO2 from existing assets that are currently emitting carbon dioxide into the air. Chart equipment for cryogenic process, which SES is, comprises between 15% and 20% of the total plant cost and will significantly increase with the ownership of SES. In amine processes, our air-cooled heat exchangers can represent the majority of the plot plan and represent approximately 20%-25% of the total cost of an amine project. The second type is direct air capture. This removes carbon dioxide directly from the atmosphere, and air-cooled heat exchangers are by far the most significant portion of project cost, approximately 50%. That's five-zero.
We love the SES technology as it falls into both the post-combustion CO2 process category as well as a very good solution for direct air capture, especially when integrated with flue gas CCUSs. Founded in 2008, as shown on slide 16, SES has received numerous R&D contracts and grants ranging anywhere from the Danish utility company to the state of Wyoming. The efficiency of the SES CCC process compared to traditional amines is a differentiator, and we also like the extended capabilities of the combination of SES and Chart. For example, CO2 liquefaction and energy storage via LNG liquefaction can be merged with the SES carbon capture process without adding completely new refrigeration equipment. This is important as energy storage is going to also be on the critical path of the transition to renewables.
As with all investments and acquisitions that we do, we only move forward with strong management teams and leaders that want to remain with the business. At HTEC, there is a very experienced leadership team run by CEO Colin Armstrong, who is a co-founder of the business and has spent 25 years in clean tech and hydrogen companies. Many of you will get to meet Colin as we will include him in certain investor discussions going forward, but right now he's out selling hydrogen equipment. Similarly, the founders of SES will remain with the business. You can see Larry Baxter and Andy Baxter's backgrounds here. But suffice to say that with an MBA, a PhD, and strong commercial relationships between them, innovation will continue with them and Doug Ducote's global engineering team. And did I mention there are 64 patents between them, plus another 20 patents pending?
You can see that patent breakdown on slide 18, and I'd be remiss not to point out the breadth of those patents. Energy storage is a key part of the IP beyond just the capture technology. One application is utility-scale energy storage, for which there is no good solution available in the market at the current time. This allows a portion of the CO2 stream to be integrated into the base CCC and LNG process, liquefied or solidified for storage, and then used to offset load during nighttime when power load for renewables is not available. Yet another linkage of Chart equipment and process to clean energy. We believe carbon and direct air capture is on the brink of breaking out, as I said already.
I've given many examples of why we believe this, and we're starting to see more and more development by our customers, evidenced by our current quotations on over 20 projects globally for CCUS equipment. Process demonstration projects are now turning to commercially viable projects, and SES is working on two near-term 20- to 30-ton-per-day project opportunities. For a 20- to 30-ton-per-day project, and you can see the commercial opportunities on slide 19, when you couple Chart and SES together, our combined content will be somewhere between $15 million and $20 million per project. As the projects begin to scale beyond demonstration into the 150- to 250-ton-per-day range, which is expected within the next two to three years, Chart and SES project content increases, so that's why we're expanding our addressable carbon and direct air capture market size for the near term.
Again, the near term for us means the next three to four years. That, coupled with what I said earlier, carbon neutrality by 2050 or sooner is impossible without carbon capture and storage. Given the complementary nature of our existing carbon capture equipment with SES's cryogenic technology, as well as the complementary nature of each of our respective commercial pipelines, we're expanding our total addressable market from $400 million-$600 million following the closing of this transaction, which is expected within 30 days, and we expect likely before year-end 2020. Market projections for small-scale plants in the 150 ton-200 ton per day ranges are above $200 million from now through 2024, and that does not include any traction in medium-scale facilities or additional end-use storage of the CO2.
On the other hand, the HTEC investment is another meaningful step in securing further opportunities to achieve a significant portion of our addressable market of $1.1 billion for our quickly growing hydrogen business by 2023. So I'll conclude on slide 21. Reiterating our approach to our balance sheet is to continue to generate strong free cash flow used for debt paydown, bolt-on acquisitions, and investments of all organic investment and growth and productivity activities. As you can see, even after the two investments announced today, our November 30th pro forma net leverage ratio will still be below two times. While we see near-term commercial opportunities and expect orders in the very near term, i.e., early 2021, from both the SES acquisition and the HTEC investment, we do not expect a material change to our 2021 revenue or earnings per share outlook as a result of these transactions.
Before I open it up to questions, there are three key takeaways from these and our other recent organic and inorganic investments that I'll leave you with. First, we have no direct peers. Our extremely unique and differentiated equipment and technology offering touches all of the interlinkages between the cleans: energy, water, food, and industrials. Second, we are staying with our strategy of expanding our high-growth, high-margin clean energy specialty markets and repair and service businesses through technology, commercial, and geographic investments. And third, carbon neutrality targets cannot be achieved without a hybrid solution and carbon capture projects. The most optimized projects will take advantage of the combinations that we described today. I'll now turn it over to Sarah for Q&A.
Thank you. To ask a question, you will need to press star and one on your telephone. To withdraw your question, please press the pound key.
We ask that you please limit yourself to one question and one follow-up. Our first question comes from a line of Rob Brown with Lake Street Capital. Your line is now open.
Hi, Jill.
Hey, Rob.
Just on SES, could you maybe describe further how their technology kind of fits in with your products, and does this really make kind of the total solution? Does this give you kind of the main really, what's the competitive position does the combination give you?
Yes. It fits really well with our products. And just by way of background, we've been working with SES for about a year and a half now, and we wanted to validate the technology compared to the other options that are available in the market. So that's why it kind of took us as long as it took us to get to this point.
But that was purposeful on our part because we wanted to make sure the interlinkage on the cryogenic side heavily relied on Chart equipment, but also could be used both in post-combustion capture, so the traditional carbon capture as it's known, as well as direct air capture because we're seeing more and more on the direct air capture side. We also really like about the SES portfolio and solutions is that it's not simply one carbon capture technology. You heard me talk about the breadth of the patents. That's really important because we think the energy storage component will be a significant differentiator for the combination of SES and Chart. So yes, this brings a full solution. And to give you an example, there's one project out there that is probably about $17 million-$18 million-ish. I can't get into specifics because we're under NDAs.
But if it was just us bidding on simply the equipment, we'd probably bid somewhere in the $5 million-$6 million range and have a shot at winning. But by going and having a complete solution, you get the full combination in somewhere just under $20 million, and you have a much better potential for winning these types of projects because, again, operators are looking for a one-stop shop all the way through to that repair and service capability. But if you just step back and say, "Fundamentally, what were we looking for?" It was a process technology that could address more than one type of capture, came with storage, and worked very well with Chart equipment, and above anything else, competed and was differentiated from an efficiency perspective against traditional amine processes.
Okay. Great. Thank you.
Then on these projects, are they sort of demonstration small-size projects right now, and that's kind of what you see over the next couple of years, or do you see these trending into bigger, larger projects right now, or is there something that needs to happen to make that step take place?
Up until now, we're seeing these demonstration projects, and that's kind of these 20 ton-30 ton per day ones. But recently, and recently being just in the last quarter, we've had quite a few inbounds related to significantly larger projects. I would still deem them to be small-scale, so that 150 ton-250 ton per day range. But what you're seeing is the end users, such as an Occidental or even the United Airlines announcement last week, are looking for more massive types of capture solutions.
So still very embryonic, and I do think it'll take a couple of years to get into the larger sizes. But certainly, this is a near-term changeover that's happening in the market now.
Okay. Thank you. I'll turn it over.
Thanks, Rob.
Thank you. Our next question comes from the line of Eric Stine with Craig-Hallum. Your line is now open.
Hey, Jill.
Hey, Eric.
Good morning. Well, you touched on this a little bit, but just wondering, you mentioned Occidental potential project out there, but I'm just curious, I mean, how much did potential project developer feedback play into this? I mean, you said that obviously it increases your chances given that you've got more content in some of these projects.
But just curious, how much of that was a factor versus you just playing offense and seeing where the market's going and how you want to be positioned?
It's a combination thereof. So we distinctly have seen the market evolve. And frankly, I'm quite surprised it's actually taken as long as it has to get to where we sit today. If you had asked me two years ago, I would have thought we'd be a year ahead of where we are. Again, I think the overarching takeaway here is we wanted to find a complementary technology process that hit on more than one aspect of the options and the optionality. But we also wanted to make sure, like IPSMR is in the LNG space, that we had a CCS process that was highly competitive and efficient. That's really where the answer is going to come into play.
So it's around the cost and the scalability. And as you have more and more efficiencies and innovations, we wanted to make sure that we kept with the Chart tradition of kind of being a market leader on efficiency technology. So that's why we've kind of waited and paused and validated, and then we saw the market starting to turn and thought, "This is the right time to do this." So while we may be a little bit early, I think we'll be a first mover in this, and a little early is probably less than a year before the dam opens. And you saw it happen with hydrogen.
The funny part is the conversations that we have on hydrogen, I think, will become very similar to carbon capture or vice versa, where this has to be part of the solution in the coming decades to get even partially toward these carbon neutrality targets. It's forecasted that there's going to be a need for 2,400 of these facilities by 2040 to get even close to the 2050 carbon neutrality targets. And right now, there's 26 existing facilities around the world with 22 new ones announced in 2020. So you can kind of get a sense of where it has to go from here.
Yep. No, that's helpful. And maybe, obviously, this is going to be part of your plan going forward, looking at companies that you can bolt on with the criteria that you set out.
But just, I mean, are there any areas that you would point to near-term that you may focus on or that we should focus on as potential spots you could continue this?
Yes. So there's a couple of things. And I'll start with the organic side. You know that we're working on the jumping-off points from our onboard LNG vehicle tank to a liquid hydrogen onboard vehicle tank because that's going to be an important part of this transport and mobility and fueling opportunity in the next five years. We've got a prototype running through our shop actually this week. And also the development of our very unique liquid hydrogen pump is coming in, hopefully, in my Christmas stocking. And then you move to the inorganic side to directly address your question. And there's a few areas here.
If you look at geographically, I think we're well-positioned in the current state in aspects of Europe thanks to McPhy, in India and Australia, thanks to our own product offering and connections there, and now I feel very good about North America. You could see us do a little bit more in the state of California itself, but through some of these relationships, we're looking at better penetration in Southeast Asia, in particular in South Korea and Japan. So that's one area geographically. The second is around there's some really nice bolt-on complementary equipment to round out some of our specialty product offerings, in particular in hydrogen, where we currently work very closely with another supplier on projects for end users. So those types of combinations would be very natural fits, and then the third is around the water treatment side.
There's a few opportunities that would expand the different types of reuse and recycle in the water treatment processes.
Okay. Thanks, Jill.
Thanks, Eric.
Thank you. Our next question comes from the line of John Walsh with Credit Suisse. Your line is now open.
Hi. Good morning there.
Hey, John.
Hey. Maybe a question specific to, obviously, what you announced today, but also thinking a little bit broader, what is the ability for you to get price with some of these kind of more niche applications? And maybe I'll even broaden it out. Really, I mean, there's a lot of focus around price cost right now just given inflation, and there's obviously metal in some of these pictures here.
But can you just talk a little bit about the pricing power of some of these kind of unique technologies that you're bringing into the customer and how you're thinking about that price-cost relationship?
Yes. A great question, John. So if you step back and look at our higher growth spaces being repair service leasing as well as the specialty areas, which these would fall into, overall, the gross margin as a percent of sales. And first half of this year, we're 39% and 40% respectively in those two business units. So you get a sense of the type of pricing that we have compared to the Chart gross margin average of, call it, 29% for argument's sake. That's the jumping-off point to your question.
Then if you start to look at what's happening in the market and the need for cost competitiveness in these more renewable and greener solutions, it's a very fine balance. But having these unique and differentiated offerings coupled with the equipment side - and I think that's the really important piece - is the coupling with the equipment allows us to have pricing power, but also allows us to address some of that cost challenge by having kind of a full solution in the one stop. Instead of having the operator have to go through an EPC or directly to multiple supply bases, and each one of those supply bases has X amount of margin built in, we'll have a certain amount of margin, but you also get a nice benefit when you have a fuller package.
It's kind of the best of both worlds as we continue to bolt on these unique offerings. The other thing I would say is, as the result of having some of these differentiated technologies in-house and coupled with our equipment, we're able to come up with a more standard package. We have the flexibility of where we make what in our really broad global footprint. And you see that in our ISO container offering where we can make ISOs in China, we can make them in India, we can make them in the States, and we can make them in Europe. You get the benefit of standardization being close to your customer in the project.
And you're going to see the same exact thing happen with this combination where we become more and more efficient with the interlinkages between the equipment and process, as well as where we make what.
Great. Thank you for that. And then maybe just a second question. I mean, when we think carbon capture, I mean, a lot of times, at least, we go to that kind of utility-type project where I think there have been some mixed historical projects. But you've talked about also here on the call, cement plants and other applications for carbon capture. So can you just, I don't know if there's a way to just say so much of the mix goes to utility opportunities, so much is for these other opportunities.
But maybe just help us understand, really, when you talk carbon capture, maybe a little bit more of the customers and the end market pie.
So the customers range from EPCs or what I would consider engineering companies. So you get the kind of the KBRs of the world to direct customers, which are typically in the big oil area. And then on the direct air capture side, this is much more around companies that don't have existing assets that they need to address the CO2 emissions happening into the air. So these would be typically what we're seeing more niche companies. We're seeing this more frequently in Europe. And when we do see the direct air capture, we're seeing that in the States with utilities.
So right now, in terms of the pipeline and the activity that we have, it's split about a third, third, third between utility, what I would consider industrials, which would fall into that engineering firm capability and capacity, and then the third, third being the big oil.
Okay. Appreciate it. I'll pass it along. Thank you.
Thanks, John.
Thank you. Our next question comes from the line of Pavel Molchanov with Raymond James. Your line is now open.
Thanks for taking the question. Needless to say, carbon capture is most advantageous, let's say, where there is a price on carbon, which the U.S. has not historically had. But we do have the Section 45Q tax credit. I think it's $40 a ton. Is that something that you will look at as a demand driver for deploying this technology domestically?
It is definitely something to look at as a demand driver.
The second one, and I would say it probably is second to both the AB 32 and the 45Q in terms of incentives. The second is really around this peer pressure concept. You've heard me talk about that development on hydrogen, where I've got everybody around me saying, "I'm going to get the carbon neutrality," and everyone around me saying, "This is how I'm going to do it." And so the private sector is the other element in this that we're watching really carefully. I think it's fairly evenly balanced because there's definitely pockets, in particular in the United States, where the credit system is more prominent. And you see that ranging anywhere from hydrogen to biogas to carbon capture. Right now, one of the ones that we do watch carefully as well is the low carbon fuel standard.
That's where right now California and Oregon have adopted the program, but there's 10 additional U.S. states that are evaluating. That could be another macro indicator of demand drivers.
Right. Second question. This one's kind of a much more high level, I suppose. You've done a lot of deals this year and before to bolster your low carbon credentials, broadly defined. If you add all of them up, however you personally define kind of low carbon solutions, what slice of your revenue mix do all of that in total represent right now?
Let's see. That would represent very easily over 20% of our total revenue. Then it would become a much bigger number if you start to look at how these investments that we've made complement and pull through our traditional equipment into these lower emission type of projects. Let me give you an example.
This one is on the water side of things. We just won an order that's about $1.6 million for a water facility that has a lot of the cleaner capabilities built into it. If we were by ourselves, we, Chart, and did not have Blue and Green with us, we would have been able to bid on about $400,000 of that $1.6 million. If Blue and Green were by themselves, they would have bid on about $500,000 of that. The combination of the treatment and the process with our equipment allowed us to win a much bigger share of that particular project. So when you start to do that one plus one equals three math on the pull-through of what I would consider more traditional equipment, you're certainly getting to half of our business being touching this type of application.
Got it. Thanks very much. Nice deals.
Thanks, Pavel.
Appreciate it.
Thank you. Our next question comes from the line of Connor Lynagh with Morgan Stanley. Your line is now open.
Yeah. Thanks. Good morning.
Hey, Connor.
We've covered a lot of ground here. So maybe just one here to sort of level set everything just because there's been so much activity. So if we look at slide 20, where you've got all of these different specialty markets, I think you've made a clear contrast today with the carbon. You've increased the addressable market, but not the 2021. I'm wondering for maybe the big ones here, if you could just sort of compare and contrast what we should be expecting over the next year in terms of order intake and revenues, how front-loaded or back-end-loaded are these different specialty market opportunities?
You got it.
Let me start by saying that while we did not increase our revenue or earnings as a result of these deals, we do expect revenue and earnings from these deals. It's just not to the point where the commercial opportunities are able to generate first-half revenue and earnings. We're trying to be fairly conservative on that guide and outlook. With that said, to answer your question, hydrogen, we're expecting certainly a significant increase, over 25% from this year to next year on order activity in that bucket. That'll put that over $55 million in hydrogen. To size the revenue side of things, the hydrogen equipment sales that we do tend to be between six and 12 months from a book-to-ship perspective. So I think that order book will be fairly even throughout 2021 in terms of the quarters.
On the over-the-road trucking side, I think this one gets left out too frequently because it is the most mature of our specialty markets. But this is the HLNG vehicle tanks for over-the-road trucks, in particular for Europe. We are seeing significant demand in this particular product offering. And I would expect the order book for this is over $100 million in 2021. There's some lumpiness quarter to quarter in that order book just based on when Class A commercial truck guys want their new trucks. But that business is going very strong. I expect that to continue into 2022 above those levels. So that would be about 10% growth year- over- year. Water treatment, we're looking at that for 2021 to be in the $25 million range in total. Historically, we would have had pre-Blue and Green in just Chart.
We would have had five plants a year, which would have been somewhere between $3.5 million-$5 million, so to give you a sense of the growth in that. The water treatment projects are anywhere from three to 12 months in terms of book-to-ship. So they tend to happen within a year from booking those. Food and beverage, we love this market. This market has been surprisingly resilient throughout COVID. And our beverage order book in the last two months has been better than it was even pre-COVID. So if you're looking at beverage orders in Chart, October, November were better than January, February to give you a sense of how that's happening and going. And food and beverage would be about a 10% growth in the order book and this ship within a quarter. The direct air capture and the carbon capture.
So this business for us historically has been de minimis because we just talked about on the call here about demonstration projects. And we're just starting to see this bidding activity start to ramp up. So I would size this somewhere in the $20 million-$30 million category in 2021. And that'll be in the back half to your question on timing. So this one is I think this one I would size this as it's about nine to 12 months behind hydrogen. So if you looked earlier this year, we would have said, "Well, let's back-end load hydrogen for the last three years." And we're starting to see that pull up in our three-year addressable markets. And then the rest of them, cannabis, rail, laser, space, those are smaller niche year, all really nice growth markets.
But they're not material enough for us to go through each one.
That all makes sense. I'll turn it back. Thanks.
Thanks, Connor.
Thank you. Our next question comes from the line of Marc Bianchi with Cowen. Your line is now open.
Hey, thank you. I'd like to go back to the direct air capture. You mentioned the kind of $15 million-$20 million content for the sort of demonstration products or projects. Should we think about that kind of content per maybe ton of capture, sort of a similar number as we get into the 150 ton-300 ton? Or what would that look like as you get into those larger size facilities?
So it's highly variable based on the plot size. So we answered this. We get the same question on the LNG side. And it's very similar.
Our answer is very similar to small scale, mid-scale, and large scale. It's harder to do that on a kind of million ton per annum or a ton per day simply because it depends on the use. It depends on the structure. It depends on how much space they have to do this. For example, one of the things that we're working on is air-cooled heat exchangers that can do the same capture capabilities for direct air capture on a much smaller plot of land and have as much efficiency and capture capabilities. So those are the types of things being addressed. But if you looked at for direct air capture, the largest opportunity we're looking at right now would be about $50 million. And that would be for the combination of the two. And that would be what I would consider a small scale.
That would be in that 250 tons per day range. And then a smaller project and a demo project, like you said, $15 million-$20 million. So right now, that's what we're seeing. I think it can get bigger than that. But the medium-scale facility, which would be 1,000 tons per day, we haven't seen one of those yet being installed. That would be double the content of the small scale, if that's helpful.
Yeah. That's great. And then I guess if I and this is looking out pretty long term. But if you look at the projections for total CCUS 2030, 2040, 2050, direct air capture is less than 10% of total. I think it's even quite small as you get out to 2050. So maybe most of the growth is going to be in sort of primary source capture.
I'm curious if you disagree with kind of that market outlook. And then secondarily, what's your comment on a point source capture just given the announcement today and what you had previously?
Yeah. So I actually think direct air capture is probably going to be closer to 20%-25% of that as you look further out. And that is the result of what we're seeing, how people are going about trying to accomplish their goals. And we're seeing more of a combination thereof than we were even, again, six months ago or even four months ago. But if you look at the traditional post-combustion capture projects, our comment on the cryogenic side is very similar to what we just talked about on direct air capture. So you can size it very similarly on the cryogenic process.
On the amine process, this would be more around 20% of the total plant size. So it would be a smaller content for our equipment on amine. So similar if you're talking about post-combustion cryogenic and direct air capture.
Got it. Thanks so much, Jill.
Thank you, Marc. Talk to you later.
Thank you. Our next question comes from the line of J.B. Lowe with Citi. Your line is now open.
Hey, good morning, Jill.
Hey, J.B.
How are you doing? So my question is more just on your kind of strategy for capital allocation. When you're looking at these deals, and the two deals today were in cash, is there any reason why you wouldn't look to make investments with your stock given the moves that it's seen lately?
I'm just trying to think of how you guys are thinking of your uses of cash and whether you would use your stock as a currency.
We definitely would use the stock as a currency. In the cases of today, it was just the structures that we had to work within for the sellers. But in terms of other opportunities on the horizon, stock equity is certainly part of the discussions. I would also add on to the answer around the sizes of the deals. So we've consciously stayed within what we would consider safe bets and smaller deals that fit really nicely. And that's a unique position to be in as well on the inorganic side where there's a handful of deals that fit our criteria for wanting them strategically, but also fit into the size of investments that we're comfortable making around these different types of areas.
So that's a little bit of a different twist on your question. But definitely, stock utilization of our stock is something that we discuss on a regular basis with any of these types of investments.
Okay. Yeah. That makes sense. The other one I just wanted to clarify was on the cryogenic pump investment that you guys are making. I know in the past you had talked about that might be an inorganic way to go about doing it. So what's the kind of the status of what you're working on internally? Just a little bit more color on that.
Sure. So just to clarify, you have to think of it in two pieces. There's a cryogenic pump that is what I would consider generic cryogenic pump.
And that is utilized in many different applications ranging from LNG, CNG fueling stations to marine activities for LNG bunkering as well as on the ships. That particular pump is not what we're developing internally. We're developing the hydrogen pump internally, which is very different than a more generic cryogenic pump. A more generic cryogenic pump would expand our product offering on the applications that I just described, whereas it could be a jumping-off point from an engineering perspective to a hydrogen pump. But it's a pretty big jump if you were doing that. So we think of this as a parallel path. We still are looking to do an inorganic acquisition for a cryogenic pump because it would expand our content as well as the organic development of a liquid hydrogen pump.
The engineering team that's dedicated to hydrogen development organically is well underway with the liquid hydrogen pump development. There's quite a few patents and IP around this. And there's two or three extremely unique and first-of-a-kind elements of this pump that will really help address this cost issue in the market on hydrogen. And so we're expecting that we'll have this pump ready in the first half of 2021.
Awesome. All right. Thanks for the clarification.
Thank you.
Thank you. Our next question comes from the line of Craig Shere with Tuohy Brothers. Your line is now open.
Good morning. Can you elaborate about synergies between your prior McPhy investment and today's HTEC investment?
Absolutely can. And this is one of the things that we really like about how we're going about building on inorganic investments where it's not meant to be one-off. It's purposely meant to build.
If you look at how the McPhy Chart combination will work together with HTEC, this goes further to the full solution offering that we're trying to accomplish. With HTEC's relationship, some of the customers that are looking to develop fueling station network and/or on-site production of the molecule, we could potentially be using McPhy electrolyzer in some of these smaller projects, which are right in McPhy's sweet spot. Also on the fueling station side, McPhy has some complementary capabilities to the Chart equipment. Those are the top two commercial opportunities on the horizon. There's certainly one that we're working in the background that's a more imminent one, which we would expect to get over the finish line in the first half, actually the first quarter of 2021.
Great. Thank you.
With three pairs of deals announced this year already, are we closer to the end than the beginning of your strategic investment announcements in hydrogen, clean tech, and specialty markets? And could individual acquisition announcements in that area begin to scale up? I know some of your legacy acquisitions kind of were $100+ million deals. Could we start to see announcements in clean tech specialty markets that's well above the low tens of millions of dollars or less?
One of the things that we really like about the timing around doing some of these deals right now is that the markets are still early days. And that allows us to bring in complementary products and technologies at what we would consider a reasonable price on something that has yet to get into full commercial production. So the short answer is no.
There's nothing in the pipeline that is similar to, say, an air exchangers or a VRV type of acquisition. The sizes kind of anywhere from five to 50 million are the ones that we're looking at. The second part of your question, which was actually the first part of your question, is much more around what does the pipeline look like. We've kind of learned our lesson to not say too much, not only from a competitive standpoint and from other people watching what we're doing, but also just to make sure that we don't get the street out over their skis on the timing of additional investments. In terms of where the markets are and in terms of our strategy, I would say we're more in the early days of building upon our capabilities and offering.
Great. Thank you.
Thanks, Craig.
Thank you.
Our last question comes from the line of Chase Mulvehill with Bank of America. Your line is now open.
Hey. Thanks for squeezing me in. Good morning, Jill.
Hey, Chase.
I guess the first one, I just wanted to talk about the SES's Cryogenic Carbon Capture technology and maybe just talk to the cost and the CO2 capture rates. If you can just talk to that real quickly.
Yeah. So from a cost perspective, if your question is around cost comparative to other options, the SES processing technology is in line with other options. So it's not a cheaper option. And it's certainly working to be more and more competitive as these become less startup or demonstration-type projects. In terms of the capture capabilities, as I referenced earlier, this is a process that is much more efficient than traditional amine processes.
And that's one of the areas that was the reason we wanted this particular capture technology versus some of the other ones that are on the market. We'll continue to make that more efficient. And we'll continue to having it as part of the Chart portfolio helps that further development of kind of two steps from the next possible competitor. And that's really around the efficiency of how it works with the equipment. And so having that in-house will accelerate the further efficiencies in the technology. But right now, it's definitely a more efficient process than your traditional amines.
Okay.
When you think about where the cost needs to get for carbon capture over time, and so as you scale things up and get your cost down, what do you think is kind of the long-term price for CO2 as you kind of look out over the, call it, five to 10-year period?
Yeah. So we're super conscious where we don't actually give any opinion on where we think price should be for any of the molecules. That's not our expertise. So I'll answer it in a little more of a generic sense of we think that the combination of movement from SMR on the hydrogen side to blue hydrogen and how CCUS has worked together, in particular with blue hydrogen, is where we're going to see the bridge happening toward cheaper green hydrogen and the storage associated with that. So it's a much more complex answer.
But given our attempt to be agnostic to these molecules, we try not to provide an opinion on cost.
Okay. I don't know. Maybe I can follow up because, I mean, some of the big old companies have put numbers out there. I've seen kind of $85 a ton to $105 a ton over the longer term. And I guess I don't know the mix. How much of that do you think is really allocated towards the capture versus kind of storage and sequestration stuff? Do you have a sense of kind of how companies would split that up? Is it half?
Yeah. The capture portion would be over half. And then the rest would be so I'd say it's more like 55%-60% would be on the capture side.
Okay. Perfect. All righty. I'll turn it back over. Thanks, Jill.
Thank you.
Thank you.
This concludes today's question- and- answer session. I will now turn the call back to Jill Evanko for closing remarks.
Thanks, Sarah. So we'll be sharing our historical prior seven quarters of financials in the new segmentation by December 24th with all of you. Consider a Chart Christmas present ahead of the earnings season. Just like Doug Ducote's awesome engineering team is going to put some newly prototyped hydrogen equipment in my stocking this year. And Doug, a lump of coal is not a renewable. So thanks, everyone, for your time today. We look forward to talking to you on our earnings call on February 18th, if not sooner. Merry Christmas and a very happy and prosperous 2021 to you all. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.