Why invest

First, the key points on why to invest in natural hydrogen:

• Game-changing potential: Natural hydrogen could literally be the “new oil”—but without climate-destroying emissions.
• Cheapest and cleanest hydrogen: Natural hydrogen is both cost-effective and environmentally friendly.
• Massive demand: The need for clean, affordable hydrogen is already significant and growing.
• Undervalued market: The natural hydrogen sector is currently under the radar, presenting untapped opportunities.
• Impactful investment: Low-cost hydrogen is essential to decarbonizing hard-to-abate sectors like steel, aviation, and shipping.

The Longer Explanation:

The global energy system must be decarbonized to avoid catastrophic climate change—a monumental task that also offers one of the greatest investment opportunities of our time. Within the broader energy transition, I believe natural hydrogen stands out as the most promising and potentially profitable opportunity.

Let’s be clear: hydrogen is not a one-size-fits-all solution. Low-emission electricity will undoubtedly play the dominant role in decarbonization. However, hydrogen will still be indispensable.

Currently, there’s a $130 billion market for hydrogen—used primarily in the fertilizer, refining, and chemical industries—supplied by polluting hydrogen derived from fossil fuels. This market alone accounts for 2% of global CO₂ emissions. While “2%” may sound small, it represents an enormous environmental impact. Moreover, this demand is projected to grow, especially as hydrogen emerges as the best option for decarbonizing sectors like shipping, aviation, steel production, and high-temperature industrial processes. Some of these applications will use hydrogen directly, while others will rely on hydrogen-derived products like methanol, ammonia, and sustainable aviation fuel (SAF).

The rising demand for clean hydrogen has spurred significant investment in green hydrogen (produced via electrolysis of water using electricity). However, green hydrogen remains prohibitively expensive, leading to the recent cancellation of several high-profile projects (as of November 2024). Green hydrogen’s high costs stem from its reliance on electricity, making it less of an energy source and more of an energy carrier. Consequently, investing in green hydrogen often hinges on the hope that clean electricity prices will decrease—an increasingly uncertain bet given rising costs for wind turbines, solar cells, and financing.

This is where natural hydrogen is a game-changer. Unlike all other forms of hydrogen, natural hydrogen is a true energy source, produced naturally in the Earth’s subsurface. It requires no energy input for production and can be extracted using proven drilling technologies. As a result, natural hydrogen is remarkably inexpensive—often estimated at around $1/kg. That’s five times cheaper than green hydrogen and even less expensive than today’s polluting hydrogen.

Natural hydrogen’s reliance on existing technologies is another significant advantage. The industry can leverage the expertise of thousands of companies and millions of professionals from the oil, gas, and mining sectors. This will accelerate scaling and position these industries as natural partners—and potentially acquirers—for early natural hydrogen companies (including publicly traded ones).

To dive deeper into the technology—or more accurately, the geology—behind natural hydrogen, check out our “About Natural Hydrogen” page or explore some of the background articles we’ve linked to.

NatH2Investing.com is part of my team’s mission to raise awareness about natural hydrogen. We welcome feedback, ideas, and collaborations—so please don’t hesitate to get in touch.

Best regards,

Risks

As with any investment, there are risks involved. Below, I outline the key risks I believe are most important to consider when investing in natural hydrogen.

General Industry Risks

• Limited production history: To date, natural hydrogen has only been produced in Mali—and in very small quantities. There’s a risk that Mali is uniquely suited for natural hydrogen production, and similar success may not be replicated elsewhere. 
• Commercial viability: While we know that natural hydrogen exists globally and in vast quantities, it remains unproven whether commercial-scale extraction (beyond Mali) can be achieved. 

These risks are mitigated, in my view, by the expertise and technology available in the oil, gas, and mining industries. These sectors possess decades of experience in resource exploration and extraction. Given that we already know natural hydrogen exists, I’m confident these industries will figure out how to extract it commercially. Many companies are actively drilling or planning to do so, and confirmation of commercial viability may not be far off. Such confirmation would likely have a significant positive impact on valuations (e.g., stock prices) in this emerging industry.

Company-Specific Risks

• Common risks: As with any company, success depends on having the right team, strategy, and execution. 
• Exploration risks: A major risk is whether a company holds exploration rights in the correct locations. Even if natural hydrogen is discovered commercially, individual companies may fail to find it in their licensed areas. This "discovery risk" is inherent in any resource investment, including oil, gas, and mineral exploration. 

The best way to mitigate company-specific risks is diversification. By spreading investments across multiple companies—ideally operating in different regions—you can reduce exposure to the risks tied to any single entity or area. This is the strategy we use for private investments at the NHV fund, and I strongly recommend applying a similar approach when investing in publicly traded natural hydrogen companies.

To better understand the geology and technology behind natural hydrogen, check out our “About Natural Hydrogen” page or explore the “Background Articles” we’ve linked to.