Vema’s ultimate goal is to produce low-carbon hydrogen at less than $1 per kilogram, making it cost competitive with petroleum-derived hydrogen and magnitudes cheaper than clean hydrogen produced via electrolysis.
“The Earth is generating hydrogen all the time,” Colin McCulley, the startup’s senior vice president of operations, told me. “So those reactions, when they’re close to the surface, are very, very slow and not fast enough to create enough hydrogen to capture.” To expedite natural hydrogen production — which occurs when water interacts with iron-rich rocks underground — Vema will inject water and its proprietary catalyst into suitable formations. The catalyst is designed to increase both the speed and the scale of the reaction, rapidly forming large, commercially relevant quantities of hydrogen.
The company has done extensive exploration and testing, McCulley told me, with the team running over 100 experiments per week for over a year. But though the lab results have been promising, scaling up will be the true test. If the tech is a success, the plan is to begin selling hydrogen in 2028.
“We’re going to start small, in which case we will likely sell truckloads of hydrogen — think 10 tons a day-type scale,” McCulley told me. “The eventual goal is to have on-site — or basically next door — consumption of the hydrogen.” This would eliminate the need to build expensive hydrogen pipelines or transport the fuel via truck. That’s a valuable cost-cutting proposition for producers of clean fuels such as methanol and ammonia, which face steep green premiums and use hydrogen as a feedstock. McCulley also envisions co-locating with data centers.
Right now, the company is starting a pilot project in Canada, and planning for others atr undisclosed locations, where McCulley says there are well-studied deposits of iron-rich rocks that sit relatively close to the surface, ripe for producing engineered hydrogen. West Coast states including Oregon, Washington, California, and Alaska have particularly well-suited subsurface geologies that lie decently close to major metropolitan areas, he explained.
Low exploration risk is a key reason why Vema thinks it’s a better bet than geologic hydrogen companies such as Koloma, which focus on locating and extracting naturally occurring underground hydrogen deposits — no additional stimulation required. But these natural formations typically lie far deeper than Vema is targeting and there’s much less certainty about where they’re located, Vema’s CEO Pierre Levin told me in an email.
“Natural geologic hydrogen depends on complex underground systems with multiple interdependent variables,” Levin, who previously served as CEO of the geologic hydrogen company Hethos, wrote. “With natural hydrogen, you’re at nature’s mercy. [Engineered Mineral Hydrogen] changes the game because we control the subsurface production process, which means predictable, manageable flow rates.”
At the moment, however, investors appear to be lining up behind the geologic hydrogen approach. Koloma alone has raised over $350 million since its founding in 2021 — though it also has yet to produce commercial hydrogen.
McCulley estimates that its hydrogen won’t be cost competitive with fossil fuels until Vema has already completed several large-scale projects, which isn’t likely to happen until 2035 or 2040. “So we need to be able to get through some of these first projects where we’re going to have to sell at a premium price,” he told me. It’s never a guarantee that emerging technologies like this will find patient backers willing to bet on the promise that economies of scale are just over the horizon. The startup is currently raising its Series A, though, and McCulley said he’s seen strong interest from the tech industry in supporting Vema at the price point it’s targeting
The company wouldn’t reveal what price this is, though, and the numbers for its contract with Verne are also under wraps. That deal depends on both Vema and Verne advancing their tech to the point where it’s well-proven and bankable. For Verne, that means demonstrating the viability of its next-generation data center power systems, which include more efficient, off-grid generators capable of running on clean hydrogen. For Vema, it requires completing pilot testing and building a successful demo project. Both sides also have to secure additional funding.
If Vema can pull that together, the payoff looks huge. “If you start producing this stuff at less than $1 per kilogram, the sky’s the limit,” McCulley told me. “The current industrial [hydrogen] gas plants, the biggest ones are, say, around 200 tons per day,” he explained. “We can be five times that from one location.”
An old copper mine in Arizona. John Moore/Getty Images
