Vema's Geologic Hydrogen Breakthrough Could Redraw the Data Center Map
February 3, 2026
The global push for clean energy is reshaping the data center industry, with power availability, cost, and carbon footprint becoming critical factors in site selection. A nascent but potentially transformative technology—stimulated geologic hydrogen—is emerging as a contender to meet these demands, promising abundant, low-cost, and clean energy that could fundamentally alter where major computing infrastructure is built.
Vema Hydrogen, a startup pioneering this method, has taken significant steps toward commercialization. In December, the company inked a supply deal for data centers in California. It has now completed a pilot project in Quebec, demonstrating its capability to power industrial users with hydrogen extracted from deep underground. The process involves drilling wells into iron-rich rock formations, which, when treated with water, heat, pressure, and catalysts, release hydrogen gas that is then captured and sold.
The scale and economics of the operation are promising. Vema's first pilot well is expected to produce several tons of hydrogen daily. By next year, the company plans to drill its first commercial well, reaching 800 meters deep. Crucially, Vema forecasts production costs from its initial wells to be under $1 per kilogram, a key benchmark for clean hydrogen competitiveness. Pierre Levin, CEO of Vema, highlighted the efficiency of the method, stating, “To supply the Quebec local market, which is about 100,000 tons per year, you would need 3 square kilometers, which is nothing.”
Currently, most hydrogen is produced via steam methane reforming (SMR), an energy-intensive process that releases significant carbon dioxide. While cleaner alternatives exist, they come at a premium. According to IEA data, SMR hydrogen costs between $0.70 and $1.60 per kilogram, with carbon capture adding roughly 50% to the price. In contrast, the Oxford Institute for Energy Studies notes that stimulated geologic hydrogen, or “engineered mineral hydrogen,” promises to be one of the cleanest sources. Levin believes that once techniques are refined, production costs could plummet below $0.50 per kilogram, undercutting all other market sources.
This cost advantage, coupled with the wide geographic distribution of the requisite iron-rich rocks like ophiolite, could have profound implications for energy-intensive industries like data centers. Levin pointed to California, which hosts large ophiolite formations, as a prime example. “You have a ton of data centers who are trying to get some baseline, decarbonized electricity,” he said, noting “very strong traction” with such operators. If Vema delivers hydrogen at its projected price, it could transform regions with the right geology into new hubs for data center development, offering a path to both decarbonization and reduced energy costs.
Source: TechCrunch
