Vema predicts cheap hydrogen could change where data centers are built

Vema Hydrogen completed a pilot project in Quebec to produce hydrogen from iron-rich rock deep underground. The startup drills wells in regions with specific rock types that release hydrogen gas when treated with water, heat, pressure and catalysts. It then draws the gas to the surface for sale to industrial users. The first pilot well produces several tons of hydrogen per day. Vema plans to drill its first commercial well next year at a depth of 800 meters. The company expects to produce hydrogen from the initial wells for less than $1 per kilogram. Chief Executive Pierre Levin said that once techniques are refined, the company could produce hydrogen for less than 50 cents per kilogram. He noted that the targeted rock formations are widely distributed. This distribution would allow drilling close to large power users such as data centers. Vema has a supply agreement with California data centers. Levin said the geology in areas like California, which has large ophiolite formations, could attract more data centers seeking decarbonized electricity. The company reports strong traction with such customers.