The Philippines is positioning itself at the center of the emerging geologic hydrogen sector, with the Southeast Asian nation reportedly hosting the largest natural hydrogen seeps found anywhere on Earth. These seeps suggest that substantial volumes of hydrogen may be trapped underground, awaiting commercial extraction. Should the country become the first successful test case for a commercially viable geologic hydrogen operation, the implications would extend far beyond its borders — potentially reshaping global energy markets and significantly advancing decarbonization efforts.

Hydrogen has long been promoted as a promising solution for decarbonizing hard-to-abate industries such as steelmaking and shipping. It can be combusted at high temperatures comparable to thermal coal or heavy fuel oil, yet produces only water vapor when burned. The challenge, however, is that hydrogen's environmental credentials depend entirely on how it is produced. Green hydrogen — manufactured using renewable energy — currently cannot compete economically with gray hydrogen, which is derived from fossil fuels. Furthermore, diverting clean energy to produce hydrogen can sometimes be less climate-efficient than using that energy directly.

Geologic hydrogen offers a potential workaround by drawing natural hydrogen straight from subsurface geological formations. Unlike manufactured hydrogen, geologic hydrogen is generated underground through natural geochemical processes such as serpentinization — a reaction between water and iron-rich mantle rocks — and radiolysis, in which radioactive decay splits water molecules. While the technology to locate and extract these deposits remains in its early stages, experts consider large-scale extraction feasible — and potentially inexpensive. The United States Department of Energy estimates that geologic hydrogen could be produced for less than $1 per kilogram. By comparison, green hydrogen currently costs approximately $3.50–$6.00 per kilogram. At such a price point, geologic hydrogen would even undercut fossil fuel-derived hydrogen, fundamentally altering the economics of clean hydrogen production and potentially opening new pathways toward net-zero emissions.

Although enthusiasm for green hydrogen has dimmed in recent years, the energy crisis stemming from disruptions around the Strait of Hormuz has revived global interest in clean hydrogen as a means of building alternative energy supply chains. Officials in China, Europe, and the United States have all announced measures in recent months to accelerate research and development in the sector. The US Department of Energy has dedicated funding through its ARPA-E program to advance subsurface hydrogen exploration, while Australia, France, and several West African nations — where naturally occurring hydrogen was first documented decades ago in Mali — have also begun surveying their own territories for deposits.

Following the Department of Energy's findings, numerous startups have emerged and begun identifying promising sites for exploration. Koloma, a leading firm in the field with backing from investors including Bill Gates and Amazon, has identified the Philippines as its top exploration target.

"The Philippines has the largest natural hydrogen seeps anywhere on the planet," Koloma CEO Pete Johnson told Forbes. "We have reason to believe that these seeps are connected to very large accumulations."

A successful project would carry transformative implications for both the global clean energy industry and the Philippine economy. The Philippines has been among the countries most affected by oil price volatility driven by the war in Iran. It is also, as Johnson noted, "the fastest-growing country in Asia, with an economy that's growing really fast and modernizing really fast."

"And their incremental unit of power is made by burning diesel," Johnson continued. "If your alternative is importing diesel or expensive LNG and you've got hydrogen that competes head-to-head against LNG costs, that's going to make sense."

Commercial-scale development, however, remains years away. The scientific processes required to reliably extract viable hydrogen from natural deposits — such as those abundantly present in the Philippines — are not yet ready for commercial deployment. No country has yet brought a geologic hydrogen project to commercial production, and questions remain about extraction rates, reservoir longevity, and whether hydrogen continues to replenish after being tapped. According to Koloma representatives, simply confirming how much hydrogen can be produced in the Philippines will take several more years.

"If we get antsy and just start poking holes in the ground and kind of praying for success and not doing the right things in the middle, that's not going to be good for me, not going to be good for shareholders, and it would be terrible for the industry," Johnson said. "I would love to have a bunch of big gushers in my portfolio right now. We have brought 90% plus hydrogen gas to the surface. We've tested it. We've verified it. We've found large accumulations. We're not sitting on something that's big and commercial yet."

By Haley Zaremba for Oilprice.com