At the end of last year, 40 companies were searching for natural hydrogen deposits, up from just 10 in 2020, with exploratory efforts underway in Australia, the US, Spain, France, Albania, Colombia, South Korea and Canada.

One of the most promising elements of white hydrogen is its cost advantage over other forms of hydrogen due to its natural occurrence. Grey hydrogen, produced from fossil fuels, costs less than $2/kg of hydrogen on average, while green hydrogen, produced using renewable electricity, is currently more than three times pricier. The cost of renewable hydrogen is expected to come down as electrolyser pricing falls in coming years; however, white hydrogen would still be cheaper, Rystad reports.  

At present, Canada-based producer Hydroma extracts white hydrogen at an estimated cost of $0.5/kg. Depending on the deposit’s depth and purity, projects in Spain and Australia aim for a cost of about $1/kg, solidifying white hydrogen’s price competitiveness.

In addition to the cost advantage, white hydrogen can also have a low carbon intensity, the study finds. At a hydrogen content of 85% and minimal methane contamination, the carbon intensity is around 0.4 kg CO₂e/kg hydrogen gas (H₂) – including embodied emissions and hydrogen emissions. At 75% hydrogen and 22% methane, the intensity rises to 1.5 kg CO₂e/kg H₂.

Minh Khoi Le, Head of Hydrogen Research, Rystad Energy, comments: ‘Although still in its infancy with lots of uncertainty, white hydrogen has the potential to be a gamechanger for the clean hydrogen sector as an affordable, clean natural resource, thereby shifting the role of hydrogen from an energy carrier to part of the primary energy supply. However, the actual size of the reserves is still unclear, and the transportation and distribution challenges of hydrogen remain.’

Through the US Inflation Reduction Act, companies are eligible to receive production tax credits (PTC) when the lifecycle carbon intensity is below 4 kg CO₂e/kg H₂. The highest PTC tier grants $3/kg if hydrogen production meets the carbon intensity threshold of 0.45 kg CO₂e/kg H₂. As such, low-carbon white hydrogen production in the US could be eligible for the highest PTC, making it appealing for producers, the study says.  

Despite the first accidental discovery that occurred approximately 37 years ago in Mali, the accumulation of hydrogen underground was previously thought to be unlikely due to hydrogen’s ability to seep through rock layers. However, new equipment, such as hydrogen-sensing gas probes, are now available to detect dissolved hydrogen in rock formations at depths of up to 1,500 metres. These probes use spectrometers to measure and analyse dissolved gases in deep boreholes. Researchers are currently developing probes that can reach deeper depths, up to 3,000 metres underground.

White hydrogen is mainly produced through natural reactions, such as serpentinisation, where water reacts with iron-rich minerals at elevated temperatures. Enhanced serpentinisation using catalysts such as magnetite could help to accelerate natural hydrogen-producing reactions.

Radiolysis of water is another source of natural hydrogen. This process involves radioactive elements within the Earth’s crust splitting water thanks to their ionising radiation.

The South Australian government added hydrogen to its list of regulated substances in 2021. This led to many companies applying for exploration permits in the region, with Gold Hydrogen securing a five-year licence to develop its Ramsay project. The company found high hydrogen concentrations of up to 86% during drilling in late 2023. Gold Hydrogen plans to conduct further drilling this year and launch a pilot feasibility study, Rystad reports.  

Governments in countries like France and the US have promised financial support to expedite the exploration and extraction of naturally occurring hydrogen. Currently, there is only one operational white hydrogen project in Bourakebougou, Mali, producing around 5 t/y of hydrogen. This small-scale project has been in operation for a decade, providing power to a village. Other projects in various parts of the world are still at an early exploration stage, with the first European natural hydrogen production expected to start in 2029.