Japan is betting on underground natural hydrogen to bridge the cost gap in its decarbonization ambitions, as the country prepares to commence resource exploration in fiscal year 2025. Backed by the Japan Organization for Metals and Energy Security (JOGMEC), the initiative reflects growing interest in what some experts are calling the “geological gold” of the clean hydrogen market—a potentially cheap, abundant, and carbon-free fuel source that has remained largely untapped.
Natural hydrogen—also referred to as “white” or “gold” hydrogen—is attracting increasing attention globally for its potential to disrupt hydrogen production economics. Unlike green hydrogen, which currently costs between $3 and $7 per kilogram due to its dependence on renewable electricity and electrolysis infrastructure, natural hydrogen may be extracted for as little as $1/kg, according to current estimates cited by the U.S. Geological Survey and echoed by JOGMEC researchers. This price differential could be decisive for Japan, where hydrogen is central to plans for decarbonizing sectors like power generation and transport, yet remains economically constrained by high production and infrastructure costs.
The Japanese government’s strategy builds on scientific evidence that natural hydrogen is being produced within the Earth’s crust through geological processes such as serpentinization, where water reacts with iron-rich rocks like peridotite and serpentinite, as well as microbial activity and radiolysis. These rock types are notably present in Japan’s geological strata, particularly in mountainous regions such as Hakuba in Nagano Prefecture, where hydrogen emissions from hot springs have already been documented.
However, geological presence does not imply economic extractability. Japan’s challenge is to identify and validate subsurface structures where hydrogen is not just being generated but also accumulating in commercially viable concentrations. To address this, JOGMEC will consolidate data from previous oil and gas exploration, including gas content logs, mineral maps, and temperature gradients, to build a hydrogen prospectivity map. The agency expects to pinpoint at least one viable exploration site by the end of fiscal 2025.
The mapping effort reflects the inherent complexity of hydrogen exploration. Unlike oil or natural gas, which form in well-understood sedimentary basins over millions of years, natural hydrogen may be generated continuously and may not follow typical hydrocarbon accumulation rules. This makes the development of new exploration models and regulatory frameworks essential. Currently, Japan’s mining laws do not recognize hydrogen as a mineral resource, raising legal uncertainties over ownership and permitting for future production.
International precedent suggests that the technology and business case may be viable. In Mali, natural hydrogen has powered a small village for more than a decade. Meanwhile, major energy players such as Mitsubishi Heavy Industries and Osaka Gas are backing U.S. startup Koloma, which is drilling for natural hydrogen in geologically favorable zones. Koloma’s data-driven exploration approach and partnerships with oil and gas veterans suggest that much of the technical know-how for hydrogen drilling already exists—it simply needs redirection.
Still, early enthusiasm must be tempered with realism. The total global reserve of natural hydrogen is estimated at five trillion tonnes, but much of this is diffuse and inaccessible. Drilling operations are only economical when hydrogen concentrations are sufficiently high and situated close to infrastructure or end-use points. Without careful site selection and risk assessments, exploration could lead to sunk costs with limited return.
Environmental impact assessments will also play a role in determining feasibility. Unlike fossil fuels, natural hydrogen extraction does not emit CO₂ directly, but drilling operations could still pose risks to groundwater and ecosystems, particularly in seismically active regions like Japan. JOGMEC has signaled that part of the project’s mandate will be to ensure that hydrogen can be extracted sustainably and at scale.
If successful, Japan’s push into natural hydrogen could recalibrate its role in the global hydrogen economy. Currently dependent on imported fossil fuels and facing high costs for synthetic green hydrogen, the country may instead position itself as a pioneer in geological hydrogen development. However, this will depend on resolving not just scientific and technical uncertainties but also policy and economic challenges that extend well beyond the exploration phase.
