Natural Hydrogen Just Hit $1 Billion. Now What?

US captures nearly half of global funding as Koloma and oil majors step up exploration for geologic hydrogen resources

9 Mar 2026

Global investment in natural hydrogen has surpassed $1bn, according to market data presented by Christophe Hecker of advisory firm NaturalHy at the Hyvolution conference in Paris in January 2026. The US accounts for close to half of the capital committed so far, positioning the country as the leading destination for exploration of the emerging fuel.

Natural hydrogen, sometimes referred to as geologic hydrogen, forms underground when water reacts with iron-rich rocks. The process produces hydrogen without carbon emissions at the point of extraction. Advocates say that if reliable deposits can be identified, production costs at the wellhead could fall to between $0.50 and $1 per kilogram, making the fuel competitive with hydrogen produced from fossil fuels.

Much of the US investment has been led by Koloma, a Denver-based exploration company that has raised about $400mn from investors including Breakthrough Energy Ventures, Khosla Ventures, Amazon and Mitsubishi Heavy Industries. The company said in January 2026 that early results from its US drilling programme were encouraging, suggesting its data-driven exploration approach may help identify commercially viable resources.

Interest from the oil and gas sector is also growing. Advisors speaking at the Hyvolution event said established energy companies could apply existing geological data, drilling infrastructure and engineering expertise to lower exploration risks and reduce development costs.

Some developers are beginning with relatively shallow wells, only a few hundred metres deep, as a way to test production economics before expanding drilling programmes. In several locations, hydrogen reservoirs may also contain helium, a high-value industrial gas that could improve project economics in the early stages of development.

Commercial production, however, remains limited. Only one site in Mali currently produces natural hydrogen at meaningful scale. Questions remain about the stability of underground flows, the size of recoverable reserves and the infrastructure required to transport the gas.

Still, with investment exceeding $1bn and research programmes expanding in the US, the sector is drawing increasing attention from energy companies and policymakers seeking new low-carbon fuel sources.