Tulum Energy rediscovered a forgotten hydrogen tech and used it to raise $27M

In a fascinating turn of events, Tulum Energy, a new venture spun out of the industrial giant Techint Group, has successfully raised an oversubscribed $27 million seed round. This significant investment is earmarked for advancing a forgotten hydrogen production technology, initially stumbled upon by Techint engineers two decades ago.

The journey of this innovative discovery dates back to 2002-2005, when engineers at Techint Group were calibrating a new electric arc furnace for a steelmaker. They observed an anomaly: the carbon electrodes, instead of eroding, were surprisingly growing larger. This serendipitous observation led to the inadvertent creation of a pyrolysis reaction – a process of burning material in the absence of oxygen. In this specific instance, the furnace was efficiently splitting methane into pure hydrogen and pure carbon.

Despite the remarkable nature of the discovery, it was largely overlooked at the time. Massimiliano Pieri, CEO of Tulum Energy, explained to TechCrunch, “Back then, nobody cared because nobody cared about methane pyrolysis, about hydrogen.” The groundbreaking experiment remained a shelved internal report for nearly two decades.

The resurgence of interest in clean energy and hydrogen production, however, prompted TechEnergy Ventures, Techint Group’s corporate VC arm, to scour for novel solutions. It was during this search that someone within the company recognized the forgotten internal discovery. Pieri noted, “Someone in the company realized, ‘But we already have that. We have this discovery.’”

This realization led to the establishment of Tulum Energy, tasked with transforming the accidental breakthrough into a viable commercial enterprise. The recent $27 million seed round, a testament to the technology’s promise, was led by prominent investors TDK Ventures and CDP Venture Capital. Additional participants included Doral Energy-Tech Ventures, MITO Tech Ventures, and TechEnergy Ventures.

Tulum Energy enters a competitive landscape, with other startups like Modern Hydrogen, Molten Industries, and Monolith also pursuing methane pyrolysis for hydrogen production. This method has garnered attention for its ability to produce hydrogen from widely available natural gas without generating carbon dioxide emissions. The process yields hydrogen gas and a valuable solid carbon dust, both of which can be commercialized.

What sets Tulum Energy apart is its distinct approach. Unlike some competitors, Tulum’s process does not necessitate expensive catalysts to facilitate the pyrolysis reaction. Furthermore, its reliance on a modified electric arc furnace leverages a widely established industrial technology, offering a significant head start in deployment and scalability. “This gives you a big head start,” Pieri emphasized.

The newly secured funding will enable Tulum Energy to construct a pilot plant in Mexico, strategically located alongside an existing Techint Group steel plant. This proximity creates a symbiotic relationship, as the steel plant could potentially procure hydrogen and carbon directly from Tulum for its operations, showcasing a closed-loop industrial synergy.

Looking ahead, Tulum Energy projects that a full-scale commercial plant would be capable of producing two tons of hydrogen and 600 tons of carbon daily. The company aims for an impressive production cost of approximately $1.50 per kilogram of hydrogen in the U.S., where natural gas and electricity are relatively inexpensive. This price point is merely 50 cents more than the cost of most hydrogen currently derived from natural gas, and significantly undercuts many leading green hydrogen methods, even before factoring in the revenue from its solid carbon byproduct.

Truly, not bad for what began as an almost forgotten mistake.