A startup, Vema Hydrogen, is pioneering a method to extract cheap, clean hydrogen from deep underground, potentially shifting where large-scale data centers are built. The company’s approach bypasses traditional, carbon-intensive hydrogen production methods and could deliver hydrogen for under $1 per kilogram, making it the cheapest source on the market.
Extracting Hydrogen From the Earth
Vema’s process involves drilling wells into iron-rich rock formations, where hydrogen gas is released when exposed to water, heat, and catalysts. The startup recently completed a pilot project in Quebec, demonstrating the viability of extracting hydrogen directly from the earth. According to CEO Pierre Levin, supplying Quebec’s market (100,000 tons/year) requires just 3 square kilometers of land – a negligible footprint.
Their first commercial well, planned for next year, will reach 800 meters underground and is projected to produce several tons of hydrogen per day at a cost below the $1/kg benchmark for clean hydrogen. The long-term goal is to drop prices below 50 cents/kg, undercutting all existing hydrogen production methods.
Why This Matters: The Hydrogen Landscape
Currently, most hydrogen is produced through steam methane reformation (SMR), which relies on natural gas and generates significant carbon emissions. Cleaner alternatives exist, like electrolysis powered by renewable energy, but they are far more expensive. Vema’s approach, dubbed “stimulated geologic hydrogen,” has the potential to be both cleaner and cheaper.
“To supply the Quebec local market, which is about 100,000 tons per year, you would need 3 square kilometers, which is nothing.” – Pierre Levin, CEO of Vema
Data Centers: A Key Early Adopter?
Data centers are energy-intensive operations increasingly under pressure to decarbonize. Vema is already in talks with data center operators in California, which boasts abundant ophiolite rock formations – ideal for hydrogen extraction. If Vema delivers on its price projections, California could become a major hub for data centers seeking cheap, baseline decarbonized power.
The company’s strategy involves drilling wells directly near high-demand users, minimizing transportation costs and maximizing efficiency. The distributed nature of these rock formations means this isn’t limited to California; similar geological conditions exist in other regions.
This development raises questions about how quickly geological hydrogen can scale. If successful, it could accelerate the shift away from fossil fuel-based hydrogen production and reshape energy infrastructure near high-demand industrial consumers.
