Thanks to its innovative approach to methane pyrolysis, Tulum Energy is repurposing steelmaking technologies to conquer a new frontier in more efficient clean hydrogen production, which could also significantly support the steel industry's decarbonization efforts.

Massimiliano Pieri, CEO of Tulum Energy, explains that the hydrogen economy is at a crossroads, with both blue and green hydrogen facing major challenges. Blue hydrogen, produced via steam methane reforming (SMR) with carbon capture, emits large amounts of CO₂ that must be securely sequestered and stored—an issue compounded by the rarity of suitable storage sites and the high costs of compressing and transporting CO₂. Meanwhile, green hydrogen, often seen as the ideal alternative, remains too expensive and complex for large-scale industrial production. Electrolyzers are costly, highly water- and energy-intensive, and require vast amounts of renewable electricity to be truly green. "You need vast quantities of renewable energy to make green hydrogen viable, and it's neither easy nor cheap to come by," Pieri explains.

Enter methane pyrolysis—or turquoise hydrogen—which sidesteps these hurdles. Instead of producing CO₂ in a gaseous state, it extracts carbon in a solid state, eliminating the need for carbon capture and storage. Even better, explains Pieri, this solid carbon, which can take several forms and morphologies, including carbon black - a fine black powder - has highly attractive revenue potential thanks to its application in industries like printing, batteries, rubber, and even construction materials such as asphalt. "We're not just producing more efficient hydrogen," says Pieri. "We're creating a valuable co-product that changes the economic equation." The result is an efficient, cost-effective hydrogen source that fits seamlessly into existing infrastructure.

At its core, methane pyrolysis is a straightforward chemical process: CH₄ (methane) is split into hydrogen gas (H₂) and solid carbon (C). However, the problem is that it requires extreme temperatures—often above 1,000°C—to break the bonds between carbon and hydrogen, a process called cracking.

Tulum Energy has devised a creative, out-of-the-box solution using an electric-arc-driven plasma reactor. This technology repurposes an existing steelmaking technology to efficiently crack methane into its core elements without releasing CO₂.

Pieri explains, "Instead of dealing with the challenge of storing the CO₂ as a gas released during traditional processes, here we're dealing with solid carbon, which is much easier to manage, store, and transport and can be monetized."

Tulum Energy's story began not in a lab but in a steel plant. Years ago, engineers at Tenova were testing electric arc furnaces for steel production. During the process, they noticed hydrogen plasma forming and solid carbon depositing onto the electrodes, a sign of methane pyrolysis.

"At the time, no one thought much of it," says Pieri. "Methane pyrolysis wasn't even part of the conversation back then."

Fast-forward a few years, and TechEnergy Ventures (TEV), the corporate venture arm of Tecpetrol, was scouting for innovative hydrogen production methods. During that process, Tenova approached TEV and the pieces began to fall into place.

"It suddenly hit that this wasn't just an accidental reaction. They already had the foundation for a scalable, industrial process," recalls Pieri. Techenergy Ventures built a partnership with Tenova to Venture Build the opportunity, leveraging third-party capital to de-risk the technology and bringing entrepreneurs like Pieri, with experience in the startup cleantech industry, and Dr. Donald Kendrick, a CTO from a competitor methane pyrolysis startup. Tulum Energy is now in the process of raising the funds needed to build its pilot plant.

The technology will be developed over the next two years at a pilot facility in Pesquería, Mexico, on the premises of Ternium, another Techint Group company.

"Ternium is the perfect partner to host our initial work," says Pieri. "They're interested in using our hydrogen for direct reduced iron (DRI) production and potentially our carbon for other applications. And they have the infrastructure we need to scale up." This is the key goal in the long term, as the strategy isn't just about proving the technology but about demonstrating that Tulum's model can function at the industrial scale.

Hydrogen demand is poised for exponential growth. Today, the world produces about 100 million tons of hydrogen annually, mainly used as feedstock for refineries, ammonia plants (fertilizer industry), and several chemical processes like hydro-treating. Most of it, however, is "grey hydrogen" made from fossil fuels, producing 10 tons of CO₂ for every ton of hydrogen.

According to Pieri, demand for hydrogen is forecast to at least double in the next three decades, with new applications emerging in steelmaking, sustainable aviation fuels, industrial heating, and transportation. The idea is to move over to sustainable hydrogen production processes in the broader context of the energy transition. However, hydrogen production needs to be efficient, affordable, and scalable to be viable. With a target production rate of up to 10-ton H2/hr and an impressive energy efficiency of 10 kWh/kg H2, Tulum aims to hit a USD 1.50/kg hydrogen cost target, a figure that would make it competitive with existing hydrogen sources.

"For industrial customers, scalability is everything," Pieri explains. "They need hydrogen in massive amounts—tons per hour, not kilograms per day. Our key value proposition is making lots of hydrogen quickly and cheaply: that means a solution that is all about readiness."

Producing hydrogen through methane pyrolysis presents significant challenges, particularly in balancing scalability with efficiency, as current methods—plasma torches, catalytic solutions, or microwave technology—tend to be either energy-efficient but hard to scale or scalable but inefficient. Another hurdle is the co-product market. "Here, we have one single technology that makes two different products: hydrogen and carbon, each with their markets, customers, and applications, which adds a degree of complexity to our planning," notes Pieri. Additionally, while methane pyrolysis is not new, few companies have achieved commercial viability. "We know this isn't easy," he acknowledges, "but we have a real technological edge thanks to our partners, who can help overcome reactor issues. Moreover, the architecture is relatively simple, and we can repurpose existing machinery while accessing a well-established supply chain, which reassures us about the technological success of this enterprise."

One of Tulum Energy's biggest strengths is its relationship with the Techint Group, particularly Tenova and TechEnergy Ventures (TEV). While TEV supported the structure build process, and is helping to shape fundraising efforts for the seed round, Tenova is keenly interested in supporting new developments related to the energy transition. As a leader in innovative technologies and services for the metals and mining industries seeking to adapt to the energy transition, it's an ideal partner for Tulum Energy.

Pieri affirms Tenova brings unrivaled experience in critically relevant fields like electric arc furnace technology and high-temperature industrial processes. "They're so much more than shareholders," says Pieri. "They're key partners for us thanks to their know-how and global presence." For Tulum Energy, the relationship works on many levels, as Tenova is plugged into a worldwide supply chain, which is an opportunity to secure essential components at scale. It also has access to international markets, as the company's customers—steelmakers—are among the most likely buyers of clean hydrogen.

"We see potential for wide-scale commercial synergy," enthuses Pieri. "Tenova sells equipment to steelmakers, which means that we'll have privileged access to their network and can thus sell them the hydrogen they need to decarbonize their processes."

Beyond hydrogen, the company is exploring innovative applications with Tenova and Politecnico di Milano for its solid carbon output in carbon-neutral concrete, asphalt electrode materials for batteries and fuel cells, carbon fiber production, synthetic fuels, and certain plastics. "This isn't just about efficient hydrogen," says Pieri. "It's about transforming entire industries with a new carbon value chain."

The energy world is watching. With the backing of the Techint Group, a growing investor base, and a market hungry for hydrogen, Tulum Energy's technology could revolutionize the economics of hydrogen production. "We have a scalable, efficient, and commercially viable technology," affirms Pieri. "Now, it's about execution."