Geologic hydrogen: closing the cost gap for heavy industry

Geologic hydrogen has the potential to supply low-carbon hydrogen at fossil-fuel prices. Extracted directly from the subsurface, it sidesteps the high costs of manufactured alternatives and could be an economical and green alternative for sectors that cannot easily electrify. For ammonia production, methanol and iron-ore reduction in steelmaking, it addresses both the need and the economics that have stalled low-carbon hydrogen adoption.

The process is called serpentinization. Seawater slowly seeps into iron-rich mantle rocks known as peridotite, which consist mainly of the mineral olivine, a common green iron-magnesium silicate abundant in Earth’s upper mantle. As the iron in the olivine reacts with the water, it oxidises to form magnetite, a black, magnetic iron oxide mineral.

In the same step, water molecules split apart, releasing hydrogen gas. The host rock turns into serpentine and brucite. Alkaline fluids emerge at 40-90 °C and pH 9-11, sustaining microbes that live on hydrogen in total darkness. The system at Lost City, discovered in 2000 on the flanks of the Atlantis Massif, has operated for at least 30,000 years.

BloombergNEF’s Hydrogen Ladder ranks hydrogen uses from essential to unviable. At the top are ammonia for fertilisers, methanol, petrochemical refining and iron-ore reduction for steel. These sectors consume the vast majority of global hydrogen and roughly 10 per cent of world energy, with few low-carbon substitutes. Lower-rung applications such as passenger cars and home heating are better served by electricity or batteries

Economics explain the gap. Grey hydrogen, made from natural gas without carbon capture, costs $1-2.5 per kilogram in most markets. Green hydrogen, produced via renewable-powered electrolysis, typically runs $3.5-8 per kilogram. BloombergNEF data show that even in optimistic 2030 scenarios, green hydrogen undercuts existing grey plants in only a handful of countries with cheap renewables.

Geologic hydrogen could close that gap. Early techno-economic studies and pilot data from explorers such as Koloma suggest production costs of $0.5-1 per kilogram, competitive with or below today’s grey benchmark. Oil-and-gas drilling techniques transfer directly, offering a rapid path to scale if viable deposits are confirmed.

A laboratory refinement sharpens the proposition. Injecting CO₂-rich water into the same ultramafic rocks accelerates the reaction while mineralising the carbon into stable carbonates, potentially yielding clean hydrogen and permanent storage in one step.

The scale remains highly uncertain. A 2024 USGS study by Ellis and Gelman modelled global in-place resources and suggested a probable value of 5.6 trillion tonnes with a huge margin for error. Current global hydrogen consumption is about 100 million tonnes per year. Even a small recoverable fraction could last up to 200 years. These figures come from a theoretical stochastic model built on assumptions about generation rates, trapping and biological consumption. Only drilling can narrow the enormous uncertainty by delivering direct measurements of concentrations, reservoir quality and flow rates.

The next few years of exploration will be telling. If early results hold, geologic hydrogen offers a practical, low-cost

route to decarbonise the sectors that need the molecule most, delivering low-carbon supply at prices economically competitive with hydrogen produced by steam reformation. Nature has run this reaction for billions of years. Industry now has the tools to harness it at scale.

References

Kelley, D.S. et al. (2005) A serpentinite-hosted ecosystem: the Lost City hydrothermal field. Science 307, 1428–1434.

Ellis, G.S. & Gelman, S.E. (2024) Model predictions of global geologic hydrogen resources. Science Advances 10, eado0955.

“Putting CO₂ into rocks and getting hydrogen out is climate double win,” New Scientist, 22 May 2026.

Liebreich, M. (2023) Hydrogen Ladder Version 5.0. Liebreich Associates.

BloombergNEF (2025) Hydrogen Supply Outlook 2025.