How Naturally Occurring Hydrogen Could Supply the World with Low-Carbon, Cost-Competitive Fertilizers

*This article was originally posted in the Argus Fertilizer Magazine in December 2024/January 2025*

The world needs fertilizer—and a growing amount of it. Some regions, such as Africa, face a significant deficit and could benefit enormously from the increased food production resulting from greater fertilizer use.

At the same time, fertilizer production is a major contributor to climate-damaging emissions, primarily due to the production of hydrogen used in ammonia synthesis. In my view, this dual challenge of increasing food security while addressing climate change calls for innovative solutions, and natural hydrogen might be the answer.

Why Green Hydrogen Might Fall Short

In the search for solutions, green hydrogen has been proposed. However, until now, it has proven too expensive to replace the fossil-derived hydrogen currently used. This is particularly true in developed markets, but also in Africa, even if imported fertilizer is already very costly. That said, in some cases, locally produced fertilizer using green hydrogen might be competitive—I have seen examples of this. Even then, one might argue that the electricity used to produce green hydrogen could be better utilized to serve underpowered or emissions-heavy grids. These are valid concerns, and they highlight the need for an alternative approach. For now, though, let’s focus on the game-changing potential of natural hydrogen for Africa and the world, particularly in fertilizer production.

What is Natural Hydrogen?

Natural hydrogen, also known as geologic, gold, or white hydrogen, is a naturally occurring form of hydrogen gas found in underground reservoirs. It is formed through natural geological processes, such as water reacting with iron-rich rocks or radioactive decay deep within the earths crust. Unlike other types of hydrogen, it does not require an energy input like green hydrogen (from electricity) or gray hydrogen (from natural gas/methane). Instead, it is a primary energy source that can be extracted and used directly, potentially at a very low cost. Thunder Said Energy and others estimate that natural hydrogen could be produced for approx. $1/kg, with associated emissions likely being minimal.

This distinction is critical. While all other forms of hydrogen are only energy carriers—requiring substantial energy inputs for production—natural hydrogen offers the promise of being both an energy source and an economic game-changer.

Abundant and Accessible

Natural hydrogen is estimated to exist in vast quantities, similar to oil and gas, and may be found in reservoirs around the world. Currently, more than 50 companies globally are exploring for natural hydrogen, with at least five of these being focused on Africa. If large, industrial-scale reservoirs are discovered, they could support sizable fertilizer plants. However, the first producing fields is likely to be smaller, more localized fields. In such cases, proximity to markets becomes crucial.

Africa’s geological characteristics make it particularly promising for natural hydrogen exploration. Across the continent, there are numerous indicators of underground hydrogen deposits, from bubbling springs to hydrogen-rich soil anomalies. 

Fertilizer Production: A Natural Fit

One of the first thing I do when evaluating a potential natural hydrogen investment is assessing market access. In many locations, local fertilizer production—particularly ammonia—is an ideal market. Ammonia is the simplest form of industrial fertilizer, and hydrogen accounts for the largest portion of its production cost. While it could also be used to produce urea or other fertilizers, these typically require larger hydrogen volumes. Therefore, for this discussion, we’ll focus on ammonia.

With hydrogen being the primary cost driver in fertilizers like ammonia, low-cost natural hydrogen could make small-scale ammonia plants (originally designed for green hydrogen) competitive. The result would be ammonia that is as cheap or cheaper than imported fossil-based ammonia. This would allow local markets to access affordable, low-carbon fertilizers without a green premium. This exemplifies the transformative potential of natural hydrogen: it can decarbonize essential industries without increasing costs for everyday goods like food and energy.

Geographic Considerations

This approach will make the most sense in regions where ammonia is already used directly as a fertilizer. While this is not universally the case, there are areas where such practices could be implemented, potentially through irrigation systems. Africa’s geology is particularly favorable for natural hydrogen, with numerous locations likely to host viable reserves. This offers a significant opportunity to align hydrogen production with local agricultural needs.

For example, countries like Mali and Tanzania have shown early promise in terms of hydrogen exploration. Imagine a scenario where these reserves could support regional fertilizer production hubs. These hubs could dramatically reduce reliance on imported fertilizers, cutting costs and emissions while fostering self-sufficiency.

A Case Study: The U.S. Midwest

A world-class example of this synergy can be found in the U.S. Midwest, where corn farming intersects with geologic potential for natural hydrogen. In states like Nebraska, Iowa, and particularly northeastern Kansas, numerous companies are exploring natural hydrogen, with around 10 wells drilled to date. Some of these wells may(I stress MAY) already be able to produce enough hydrogen to support a small-scale ammonia plant serving local markets. While no data from these wells has been publicly released, the level of activity underscores the potential of natural hydrogen to revolutionize local fertilizer markets.

We have calculated that, natural hydrogen using available small scale ammonia technology could be turned into ammonia which could be sold to local farmers at a price similar to the fossil ammonia currently used. This includes the relevant risk adjusted profit for every one involvet. This example demonstrates how local hydrogen production can meet agricultural needs while lowering emissions. It’s a model that could be adapted and scaled for other regions, including Africa.

Transformative Potential in Africa

The same approach could have an even greater impact in Africa. Local, low-cost ammonia production could address food security and increase agricultural productivity, all while reducing emissions. The Five companies currently exploring for natural hydrogen in Africa, underscoring the continent’s vast potential. Though further exploration and drilling are required to identify viable reserves, the long-term benefits could be immense. Africa’s combination of favorable geology and pressing agricultural needs makes it an ideal candidate for leveraging natural hydrogen for fertilizer production.

With Africa’s increasing population and urgent need for enhanced food security, this synergy could drive profound economic and environmental benefits.

Additionally, natural hydrogen exploration could foster local industries and create jobs. From well drilling to plant operation, the development of a hydrogen-based fertilizer sector could stimulate economic growth and strengthen communities. This aligns perfectly with the broader goals of sustainable development and energy transition.

Overcoming Challenges

Of course, the road ahead is not without obstacles. Exploration efforts must be scaled up to identify commercially viable reserves, and infrastructure will need to be built to transport and process the hydrogen. Regulatory frameworks will also play a crucial role in ensuring that development is both efficient and environmentally responsible.

Yet, these challenges are surmountable. History shows that when a resource offers transformative potential—as oil and gas did in the 20th century—the necessary investments and innovations tend to follow. The more than 50 companies globally engaged in natural hydrogen exploration, up from about 10 2 years ago the momentum is already building.

A Bullish Outlook

I am unabashedly optimistic about the potential of natural hydrogen in general and especially in fertilizer production. While I expect the first commercial discoveries to occur in the U.S., the implications for food security and agricultural productivity in Africa could be extraordinary. Natural hydrogen could lower emissions, reduce costs, and foster local supply chains—delivering meaningful benefits to both developed and developing regions. The possibilities are truly mind-boggling.

I firmly believe that natural hydrogen will play a defining role in the next chapter of global agriculture. Its ability to bridge the gap between economic growth and environmental stewardship makes it a resource like no other. Let’s seize this moment to unlock its potential, especially for the regions that need it most.

 - Morten Stahl, Founding Partner at Natural Hydrogen Ventures, the world's only investment fund specializing in the emerging natural hydrogen industry.