Current hydrogen production processes generate significant carbon dioxide emissions. Cleaner production is essential to decarbonization and building new markets but remains expensive and slow to scale. Advancing multiple clean production methods is necessary to pair each technology’s distinct advantages with their most favorable contexts, taking into consideration regional resources, infrastructure, and end uses.

Methane pyrolysis (MP) is an emerging clean hydrogen production method that splits methane into hydrogen and solid carbon, avoiding direct carbon dioxide emissions. Unlike other hydrogen production methods, MP has potential to produce valuable carbon co-products, such as carbon black, substitutes for natural, or conventional synthetic graphite, or carbon nanotubes, creating opportunity for a dual-revenue model. This could improve economic resilience and scalability for clean hydrogen.

This report examines MP’s technology landscape, attributes and advantages, engineering challenges, and commercial status. It highlights a growing field of private-sector developers advancing systems capable of flexible deployment models suitable for distributed and on-site hydrogen creation, leveraging available infrastructure.

With public policy support, MP could play a significant role in accelerating clean hydrogen deployment. Targeted federal actions include:

• Research, development, demonstration, and deployment (RDD&D): Federal support through grants, prizes, and partnerships can accelerate innovations for operational performance and the quality of carbon products. Cost-sharing grants and loan support for new projects and domestic manufacturing facilities can help unlock private capital.
• Production tax credits: Production-based tax credits for clean hydrogen and/or MP-derived carbon products are a strong enabler of early technology implementation. Credits should be predictable and durable while also ensuring that resources (e.g., lifecycle methodologies) are updated to accommodate new technologies like MP.
• Support for domestic cleaner hydrogen and carbon products: Demand-side support, from carbon pricing to sector-specific incentives programs, strengthens markets for clean hydrogen and MP-derived carbon products by aligning with broader energy security and economic goals.
• Curbing methane emissions: Policies that reduce natural gas supply chain emissions—via standards, leak detection programs, or performance programs—maximize the value
  of MP.

Taking a Closer Look

Achieving net-zero emissions will require large-scale change across all sectors of the economy, and efforts to drive this transition are intensifying. Over the past several years, through the Net-Zero Pathways Initiative, the Center for Climate and Energy Solutions (C2ES) has engaged closely with leading companies across diverse sectors to examine challenges and solutions to decarbonizing the U.S. economy by 2050. As we laid out in Getting to Zero: A U.S. Climate Agenda, reaching net zero will require large-scale change, but it will also require us to address a number of discrete and urgent challenges. To inform policymakers considering these near- and long-term questions, C2ES launched a series of “Closer Look” briefs to investigate important facets of the decarbonization challenge, focusing on key technologies, critical policy instruments, and cross-sectoral challenges. These briefs explore policy implications and outline key steps needed to reach net zero by mid-century.