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

In an unexpected twist of fate, a long-ignored technological breakthrough is now gaining traction in the energy sector. Between 2002 and 2005, engineers at Techint Group were working on a new electric arc furnace for steel production when they discovered something remarkable: instead of degrading, the carbon electrodes were actually increasing in size. This strange occurrence was attributed to a pyrolysis reaction, which involves burning materials without oxygen. In this instance, the furnace was converting methane into pure hydrogen and solid carbon. Despite the promising nature of this discovery, it was largely overlooked for two decades. Massimiliano Pieri, CEO of Tulum Energy, recounted that during that time, there was little interest in methane pyrolysis or hydrogen production. However, in recent years, investors from Techint’s corporate venture capital arm, TechEnergy Ventures, began exploring innovative methods for producing hydrogen from methane while minimizing environmental impact. A realization struck: the company already possessed a potential solution. This led to the formation of Tulum Energy, which aims to turn this accidental finding into a profitable venture. Recently, Tulum secured a remarkable $27 million in seed funding, led by TDK Ventures and CDP Venture Capital, with participation from Doral Energy-Tech Ventures, MITO Tech Ventures, and TechEnergy Ventures. Tulum Energy is not alone in its pursuit of methane pyrolysis as a method for hydrogen production. Other startups like Modern Hydrogen, Molten Industries, and Monolith are also in the race. However, Tulum has unique advantages; notably, it does not require expensive catalysts to facilitate the pyrolysis reaction, unlike some competitors. Additionally, by utilizing a modified version of the electric arc furnace, Tulum leverages a well-established technology, providing a significant head start in the field. The company plans to use its newly acquired funding to construct a pilot plant in Mexico, adjacent to an existing steel plant owned by Techint. Should the pilot succeed, the steel facility may source hydrogen and carbon directly from Tulum for its operations. Pieri indicated that at full production capacity, a commercial facility could yield up to two tons of hydrogen and 600 tons of carbon daily. Tulum aims to produce hydrogen at a cost of approximately $1.50 per kilogram in the U.S., where electricity and natural gas are relatively inexpensive. This pricing is only slightly above the current market cost for hydrogen derived from natural gas, while also undercutting many leading green hydrogen production methods. This revival of a once-forgotten technology could reshape the landscape of hydrogen production, turning a past oversight into a promising future.