The “Coal Mine in Reverse” that Produces Clean Hydrogen

Something must change to meet tomorrow's hydrogen needs.

As governments and companies across the world become more ambitious about reducing their carbon emissions, hydrogen is expected to play a major role in replacing carbon-emitting fuels. Some analysts project the market for clean hydrogen will hit a compound annual growth rate of more than 54% between 2021 and 2028. "The global market for hydrogen has grown immensely over the past 40 years, but we need collaboration from all players to make the hydrogen value chain complete," says Ricky Sakai, vice president of New Business Development at MHI America.

The trouble with today's hydrogen? Historically, the most widely used production method to produce hydrogen at scale, steam-methane reforming, exacerbates the very problem we need to address -- it creates 10 times more carbon dioxide (CO₂), as a byproduct, than hydrogen.

One potential solution is an innovative reengineering of conventional methane pyrolysis. Heating methane to a very high temperature deconstructs it, producing hydrogen gas and solid carbon. The trick is to make the process efficient enough to be economical at scale. "It doesn't require any new science -- it's just a blocking and tackling the chemical engineering problem," says Zach Jones, cofounder and CEO of C-Zero, a hard tech startup in Santa Barbara, Calif., that is eager to scale up its proprietary process for methane pyrolysis.

Jones' company and its technology struck the New Business Development team as a promising investment opportunity for MHI Group, which aims to commercialize a variety of approaches to decarbonization. C-Zero's method could enable natural gas producers, distributors and consumers to continue operating in a decarbonized world while helping them achieve their net zero commitments.

Jones likens the company's process to "a coal mine in reverse": C-Zero decarbonizes natural gas, produces clean hydrogen and puts the resulting solid carbon underground.

Methane pyrolysis offers a significant advantage: It uses only about 13%as much energy as electrolysis, the most common method of producing zero-carbon hydrogen.

A molten catalyst

The opportunity to resuscitate methane pyrolysis came about because of two converging trends: global concern about rising CO₂ levels and a plentiful supply of cheap natural gas. Together, they offered the potential to capitalize on a significant advantage methane pyrolysis has over electrolysis, the most common method of low carbon/zero carbon hydrogen production -- it uses only about 13%as much energy per unit of hydrogen produced.

The promise of that efficiency drew the attention of Eric McFarland, an entrepreneurial professor of chemical engineering at the University of California at Santa Barbara. Methane pyrolysis is a relatively straightforward process, but it hasn't been widely used. The conventional approach involves flowing methane across a bed of heated nickel to separate the hydrogen and carbon. But the resulting solid carbon clogs up the surface of nickel. Regenerating the nickel produces new CO₂.

McFarland theorized that using a molten catalyst could solve the problem. In a liquid state, the catalyst constantly regenerates itself because there is no surface for the carbon to build up on and cause deactivation. Other processes that yield impure carbon retain catalyst material from the process, reducing the system's efficiency and adding to the cost.

Producing hydrogen more efficiently

In 2017, Jones, an ardent champion of hydrogen who has been driving a hydrogen fuel cell-powered car for years, was looking for projects to invest in. He came across an academic paper McFarland had written about his molten catalyst breakthrough and flew to Santa Barbara looking to help fund a startup. Instead, Jones and the professor cofounded C-Zero.

The nascent company focused on optimizing its version of methane pyrolysis to produce hydrogen as efficiently as possible. Retaining heat in the system was key since heat loss can cut the efficiency advantage over electrolysis significantly.

Jones and McFarland were betting that fine-tuning the process would make it easier to commercialize, and that people eventually would care enough about decreasing CO₂ emissions to pay a premium for cleaner hydrogen production. "We called a lot of potential investors who said, 'Listen, no one's ever going to be willing to pay a premium for avoiding CO₂," says Jones. But today, "Some of them are now actively trying to give us money."

Currently, the company is building a pilot facility that will increase current production capacity by more than an order of magnitude. The founders expect that they're just a couple of technology iterations away from producing five to 10 tons of hydrogen per day, which they consider the minimum efficient scale.

Producing hydrogen where it's used eliminates the need to transport it. Instead, companies can transport natural gas using existing infrastructure.

The right technology at the right time

C-Zero's technology fits into the emerging hydrogen value chain in a variety of ways. Oil and gas producers under pressure to reduce emissions gain a new, non-emitting end market. Exploration and production companies can use the technology at the wellhead to avoid fugitive methane emissions.

For companies such as MHI Group, which are converting gas turbines to run on hydrogen, the process can happen directly in front of the turbines. C-Zero's hydrogen comes out hot, which actually boosts turbine efficiency.

What's more, producing hydrogen where it's used eliminates the need to transport this flammable, low-density element, eliminating another obstacle to widespread adoption; instead, companies can transport natural gas using existing infrastructure. And wherever in the value chain methane pyrolysis is used, its solid carbon byproduct can be stored directly in the ground -- much like a coal mine.

Ultimately, this twist on pyrolysis reduces the cost of hydrogen production. It can scale along with greater demand, creating an emission-free market for natural gas while potentially replacing it in electricity production. And the technology's flexibility to fit into the hydrogen value chain in multiple ways enables it to adapt as that market evolves.

Given hydrogen's rapid expected growth, says MHIA's Sakai, a process that produces as much hydrogen as possible, as efficiently as possible, is all but certain to be in demand. It represents an important -- and innovative -- path for decarbonization.