Decarbonizing Industrial Hydrogen with Tulum Energy’s Max Pieri
Max Pieri is the CEO of Tulum Energy, a company using electric arc furnace technology to produce clean hydrogen through methane pyrolysis.
Max Pieri is the CEO of Tulum Energy, a company using electric arc furnace technology to produce clean hydrogen through methane pyrolysis.
What does Tulum Energy do?
We’re targeting the production of clean hydrogen as a feedstock rather than as a fuel. People sometimes forget that the vast majority of hydrogen is currently used as a feedstock for chemical processes in refineries, ammonia production, and chemical plants. These applications account for more than 95% of total hydrogen production today, and I believe it will likely remain that way in the future.
Currently, there are around 100 million metric tons per year of hydrogen produced globally, and it’s an extremely carbon-intensive industry. Just decarbonizing the production of hydrogen as a feedstock would have a huge impact. What I particularly like about Tulum is the scalability. We have technology that can produce hydrogen through methane pyrolysis in the high volumes required to serve these industrial applications.
Why is hydrogen production so carbon intensive today?
Right now, most hydrogen is made using steam methane reforming, or SMR, which produces what we call gray hydrogen. This process uses methane but produces massive amounts of CO2. We’re talking about more than 900 million metric of CO2 per year from hydrogen production using this technology.
There are several ways to decarbonize hydrogen production. The simplest is blue hydrogen, where you add carbon capture to the SMR process. But that requires somewhere to store the CO2 near your production facility, which is a rare combination. Green hydrogen uses electrolysis to split water molecules using renewable electricity, but it has significant infrastructure limitations and very high costs. You need about five times as much energy to split water molecules as you need to split methane molecules.
How does Tulum Energy’s approach differ?
We’re pursuing methane pyrolysis, which splits methane molecules to produce hydrogen and solid carbon. The key innovation at Tulum Energy is using electric arc furnace technology. This is machinery that’s been around for a long time and is currently used to smelt iron. We’ve adapted this as a high-temperature heat source to crack methane molecules.
This approach has several advantages. Electric arc furnaces are already available at a very large scale. You can find 250-megawatt capacity furnaces. Having existing machinery that can be repurposed shortens our technology maturation roadmap and maximizes our capital efficiency. We can get to commercial scale using less capital and in shorter time than other methane pyrolysis companies.
How did Tulum Energy’s thesis come about?
The origin was serendipitous. Our spinoff partners are active in the steelmaking industry, and one of them, Tenova, makes electric arc furnaces. A few years ago, they were running experiments passing methane through the electrodes and discovered they were creating hydrogen plasma. The carbon electrodes, instead of wearing out, were actually growing because carbon was depositing onto them.
At the time, nobody cared because there wasn’t much interest in hydrogen production. But later, when the venture capital arm was scouting for methane pyrolysis companies, someone remembered this discovery. I wasn’t the inventor. I was actually presented with this technology. Having previously invested in methane pyrolysis companies as a corporate venture capitalist, I recognized this approach could avoid many of the challenges other companies faced.
Who are Tulum Energy’s target customers?
Our ideal customers are the current major hydrogen users like refineries, ammonia producers and other chemical plants. Refineries and ammonia producers alone account for more than 90% of hydrogen demand. These facilities typically need between one and 10 metric tons of hydrogen per hour. That’s 20 to 200 metric tons per day depending on plant size.
Steel makers are particularly interesting potential customers for us. They’ll increasingly use hydrogen for direct reduction iron production, where hydrogen serves as a reducing agent. What makes steel makers unique is they’re the only case where the same customer needs both our products: hydrogen and carbon. We produce three kilograms of carbon for every kilogram of hydrogen, and steel makers use both in their operations.
What’s your path to commercialization?
We’re building a pilot plant in Mexico over the next two years to demonstrate the technology. If successful, we might also build our first commercial plant there, as there’s a steel maker developing a large direct reduction iron facility who’s potentially interested in our hydrogen.
Our approach targets production costs competitive with gray hydrogen, even excluding revenue from the solid carbon byproduct. By using proven technology at the right scale and targeting existing industrial hydrogen users, we believe we can make a significant impact on decarbonizing this carbon-intensive industry.
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