Vema Hydrogen has been awarded $13m to advance the development of its simulated geologic hydrogen (SGH) operations.
The North Carolina startup will use the funds to develop North America’s first full-scale SGH pilot wells, injecting water and a catalyst into iron rock to mimic natural hydrogen formation.
Vema Hydrogen claims its process consumes less than 3kWh per kg of hydrogen, achieving production costs below $1/kg.
The funding round was co-led by Extantia Capital with Propeller Ventures and participating from Zero Carbon Capital, Pace Ventures and Existing investor Grantham Foundation.
In an online statement, Extantia explained the reasons for investing in Vema.
“The company is developing a novel approach for the production of cheap and clean hydrogen by exploiting naturally occurring reactions in the subsurface and then supercharging them.
“This innovative technology promises a levelised cost of hydrogen (LCOH) of < $1/kg with an energy requirement below 3 kWh/kg,” the investor claimed.
© Extantia
“This makes hydrogen a viable pathway to decarbonise industries in hard-to-abate sectors and opens up the possibility of hydrogen as an energy source rather than an energy vector.”
With hydrogen demand set to surge, Extantia believes current green production methods remain costly and unscaled.
Vema’s solution “offers an alternative solution with all the above upsides, whilst overcoming much of the aforementioned downsides of white hydrogen (natural),” according to Extantia.
“Vema optimises these naturally occurring reactions. The result is a process that is reliable, environmentally friendly and allows for control over the gas produced, translating into high-purity hydrogen and a low LCOH.
“This makes it a promising alternative to both green and natural hydrogen sources, offering a scalable and cost-effective solution with fewer logistical challenges as wells can be placed near demand centres.
“Metaphorically speaking, if white hydrogen is like digging for gold, then Vema’s approach is more akin to alchemy,” Extantia added.
Analysis: Is natural hydrogen the next breakthrough or bust?
The next gold rush, a game-changer for decarbonisation and an underestimated resource: all terms used to describe natural hydrogen, which has grabbed an ever increasing number of headlines in recent months.
Formed by natural processes inside the Earth’s crust through processes such as serpentinisation and iron oxidation, natural hydrogen can accumulate in underground reservoirs. It has been coined as the climate solution under our feet and is capturing the minds of investors, entrepreneurs and policymakers alike, often touted as a low-cost, low-impact energy source.
While fossil fuel-based grey hydrogen costs less than $2/kg on average, many anticipate natural hydrogen costs, depending on deposit purity and depth, to be around $1/kg1.
Since 2021 a growing number of new natural hydrogen exploration ventures have been set up, but it has only been in recent months the natural energy carrier has received serious attention. Current exploration efforts are being undertaken in Australia, US, Spain, France, Albania, Colombia, South Korea and Canada.
