Element One Deal Signals Shift in Geologic Hydrogen

Acquisition of Stone to H2 highlights move from land grabs to proprietary technology in emerging US natural hydrogen sector

16 Feb 2026

Element One Hydrogen has agreed to acquire up to 96 per cent of Stone to H2, a developer of underground hydrogen extraction technology, in a deal that points to a strategic shift in the nascent US geologic hydrogen industry.

The transaction marks a move away from early competition over acreage towards a focus on proprietary systems designed to generate and scale hydrogen production below ground. Natural, or “white”, hydrogen has attracted growing interest as a potentially abundant and low-carbon energy source, with early entrants concentrating on exploration and land positioning.

Stone to H2 has developed a process intended to stimulate hydrogen generation within specific rock formations. Rather than relying only on existing trapped gas, the approach aims to create hydrogen in situ and extract it for commercial use. The company also targets the recovery of critical minerals during the process, opening the possibility of additional revenue streams at a time when supply chain security has become a policy priority.

The acquisition is structured as a phased earn-in, allowing Element One to increase its ownership as technical milestones are met. The structure limits upfront financial exposure while preserving longer-term upside, a feature that industry observers say reflects caution in a sector still proving its commercial model.

The timing coincides with federal incentives for clean hydrogen production in the US, which are encouraging developers to demonstrate cost competitiveness and lower emissions. Technologies capable of verifying environmental performance may be better placed to secure funding and qualify for government support.

Regulatory frameworks for underground hydrogen production remain under development in the US and elsewhere. Standards for classification, permitting, water use and long-term environmental monitoring are still evolving as pilot projects move forward.

While technical and regulatory uncertainties persist, the deal suggests that intellectual property and engineering capability, rather than land access alone, may shape the next stage of growth in geologic hydrogen. How quickly the sector can move from pilot projects to repeatable, commercial scale production remains an open question.