From mining giants to Big Oil, major players are jumping on the 'white hydrogen' bandwagon

CNBC

28-04-2025

The construction site of a plant for the production of hydrogen in Germany.
Picture Alliance | Picture Alliance | Getty Images
A growing number of sizable companies, from mining giants to energy majors, are embracing the hype for natural hydrogen.
It comes as buzz continues to build over the potential for a resource that advocates say could radically reshape the global energy landscape.
Natural hydrogen, sometimes known as white, gold or geologic hydrogen, refers to hydrogen gas that is found in its natural form beneath Earth's surface. The long-overlooked resource, first discovered by accident in Mali nearly 40 years ago, contains no carbon and produces only water when burned.
Investor interest in the nascent natural hydrogen sector has been intensifying in recent months, fueling optimism initially driven by research startups and junior exploration companies.
Over the past year or so, some of the sector's established backers include mining giants Rio Tinto and Fortescue, Russia's state-owned energy giant Gazprom, the venture capital arm of British oil giant BP and Bill Gates' clean tech investment fund Breakthrough Energy Ventures.
We can use it to make metals, make fuels, you could even make food, and all with far fewer emissions than conventional approaches.
Eric Toone
Chief technology officer at Breakthrough Energy
Exploratory efforts are currently underway in several countries across the globe, with Canada and the U.S. leading the way in terms of project counts over the last year, according to research published by consultancy Rystad Energy.
Analysts expect the year ahead to be a pivotal one, with industry players hoping their exploration campaigns can soon locate the elusive gas.
Not everyone's convinced about the clean energy potential of natural hydrogen, however, with critics flagging environmental concerns and distribution challenges. For its part, the International Energy Agency has warned there is a possibility that the resource "is too scattered to be captured in a way that is economically viable."
A global scramble for 'white gold'
Minh Khoi Le, head of hydrogen research at Rystad Energy, said it's difficult to predict whether natural hydrogen can live up to its promise in 2025.
"I guess last year was the year that things got really interesting for the natural hydrogen space because that's when many companies started to plan drilling campaigns, extraction testing and we started to see some major players start to get involved as well," Le told CNBC by video call.
"Since then, I would say the progress has been relatively slow. There are only a few companies that have actually started drilling," he added.
Gauges that are part of the electrolysis plant of the geological hydrogen H2 storage facility.
Alex Halada | Afp | Getty Images
Rystad's Le, who characterized the global pursuit of natural hydrogen as a "white gold rush" last year, said that while there'd been no major progress over the last 12 months, an upswing in investor interest could help to deliver some meaningful results.
"Now, we are starting to see companies getting investment, so they have money to fund their drilling campaigns. So, if we are to get an answer of whether this thing will work, we'll get to that conclusion a bit faster this year," Le said.
Hydrogen has long been billed as one of many potential energy sources that could play a key role in the energy transition, but most of it is produced using fossil fuels such as coal and natural gas, a process that generates significant greenhouse gas emissions.
Green hydrogen, a process that involves splitting water into hydrogen and oxygen using renewable electricity, is one exception to the hydrogen color rainbow. However, its development has been held back by soaring costs and a challenging economic environment.
Clean, homegrown energy
Australia's HyTerra announced an investment of $21.9 million from Fortescue in August last year, noting that the proceeds would be used to fully fund expanded exploration projects.
A spokesperson for Fortescue, one of the leading green hydrogen developers, said its push into the natural hydrogen sector was in line with its "strategic commitment to exploring zero emissions fuels."
Acknowledging that more work is required to fully assess natural hydrogen's emissions profile, Fortescue's spokesperson described the technology as a "promising opportunity" to accelerate industrial decarbonization.
A hydrogen-powered haul truck, right, at the Fortescue Metals Group Ltd. Christmas Creek mine in the Pilbara region of Western Australia, Australia, on Tuesday, Oct. 17, 2023.
Bloomberg | Bloomberg | Getty Images
Elsewhere, BP Ventures, the venture capital arm of BP, led a Series A funding round of U.K.-based natural hydrogen exploration startup Snowfox Discovery earlier this year, while France-based start-up Mantle8 recently received 3.4 million euros ($3.9 million) in seed funding from investors, including Breakthrough Energy Ventures, a climate and technology fund founded by Bill Gates in 2015.
Eric Toone, chief technology officer at Breakthrough Energy, said the fund had backed the likes of Mantle8 and U.S.-based startup Koloma because the promise of natural hydrogen is such that it "could unlock a new era of clean, homegrown energy."
"Hydrogen is pure reactive chemical energy. If we have enough hydrogen and it's cheap enough, we can do almost anything. We can use it to make metals, make fuels, you could even make food, and all with far fewer emissions than conventional approaches," Toone told CNBC via email.
"We know it's out there and not just in isolated pockets. Early exploration has identified natural hydrogen across six continents. The challenge now is figuring out how to extract it efficiently, move it safely, and build the systems to put it to work," he added.
In search of the 'eureka moment'
Aurian Durbuis, chief of staff at France's Mantle8, said momentum certainly appears to be building from a venture capital perspective.
"There is a growing interest, indeed, especially given the dynamics with green hydrogen right now, unfortunately. People are turning their eyes to other solutions, which is in our favor," Durbuis told CNBC by video call.
Taking the evolution of US shale-gas as an analogy, even if large finds are made, it will likely take decades to achieve industrial production.
Arnout Everts
Member of the Hydrogen Science Coalition
Based in Grenoble, in the foothills of the French Alps, Mantle8 is targeting the discovery of 10 million tons of natural hydrogen by 2030 to complement the European Union's goals.
"The question is can we find producible reservoirs, in the oil and gas terminology. That's really what we need to figure out as an industry," Durbuis said.
"We think we can drill in 2028 and hopefully that is the eureka moment because if we can find something at that time, then it could obviously be a game changer. If we find highly concentrated hydrogen, with pressure, then this just changes everything," he added.
What's next for natural hydrogen?
The Hydrogen Science Coalition, a group of academics, scientists and engineers seeking to bring an evidence-based view to hydrogen's role in the energy transition, said exploration for natural hydrogen is still at an "embryonic stage" — but even so, the likelihood of locating large finds of nearly pure hydrogen that can be extracted at scale look "relatively slim."
The world's only producing hydrogen well in Mali, for example, supplies "just a fraction of the daily energy output of a single wind turbine," Arnout Everts, a geoscientist and member of the Hydrogen Science Coalition, told CNBC via email.
The team from the Geological Agency of the Ministry of Energy and Mineral Resources (ESDM) took samples of natural hydrogen gas found in One Pute Jaya Village, Morowali Regency, Central Sulawesi Province, Indonesia, 23 October 2023.
Nurphoto | Nurphoto | Getty Images
"Taking the evolution of US shale-gas as an analogy, even if large finds are made, it will likely take decades to achieve industrial production," Everts said.
Ultimately, the Hydrogen Science Coalition said the pursuit of natural hydrogen risks distracting focus from the renewable hydrogen needed to decarbonize industries today.