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BASF, the world’s largest chemical producer based in Ludwigshafen, Germany, has partnered with ExxonMobil to develop low-emission hydrogen using methane pyrolysis technology. This collaboration aims to accelerate the production of cost-effective, clean hydrogen for industrial use. The companies have signed a joint development agreement and plan to build a demonstration plant in Baytown, Texas, to test the technology at scale.

BASF has been researching methane pyrolysis for several years with funding from Germany’s Federal Ministry of Research, Technology, and Space (BMFTR). By teaming up with ExxonMobil, the companies hope to combine expertise and bring this promising hydrogen solution closer to commercial reality.

BASF methane pyrolysis test facility at Ludwigshafen site

exxonmobil basf
Source: Exxon

Methane Pyrolysis: Fueling a Low-Carbon Future

Methane pyrolysis is a process that splits methane—a major component of natural gas—into hydrogen and solid carbon using electricity. Unlike traditional hydrogen production methods, such as steam-methane reforming (SMR), methane pyrolysis does not produce CO2 during the reaction.

The process uses about five times less energy than water electrolysis and doesn’t require water, making it more efficient in many situations. Methane pyrolysis also benefits from existing natural gas infrastructure, so it can be deployed in multiple locations without major modifications.

Product costs and CO2 footprint of different hydrogen production technologies

methane pyrolysis carbon emissions
Source: Royal Society of Chemistry https://pubs.rsc.org/en/content/articlehtml/2025/ee/d4ee06191h

Key Benefits and Challenges 

Methane pyrolysis can play an important role in the transition to a low-carbon economy. Hydrogen demand is expected to grow across industries, from chemicals and steel to transportation and energy storage. By producing hydrogen without direct CO2 emissions, methane pyrolysis can help industries meet decarbonization targets.

Hydrogen is a critical energy carrier and feedstock for the chemical industry. Solid carbon, the byproduct of methane pyrolysis, is also valuable. It can be used in steel and aluminum production, construction materials, and advanced carbon products like battery components.

Key advantages of methane pyrolysis include:

  • No direct CO2 emissions during hydrogen production.

  • High-purity solid carbon that can be stored or used commercially.

  • Lower energy demand compared to electrolysis.

  • Compatibility with existing natural gas systems makes deployment easier.

However, the technology isn’t completely emissions-free. Upstream methane leaks—from extraction, processing, or transportation—can significantly increase greenhouse gas emissions. Methane has a global warming potential many times higher than CO2, so minimizing leaks is critical for keeping emissions low.

Thus, the process requires careful management of upstream methane leaks to ensure true low emissions. Also, methane supply chains must be monitored and controlled. Additionally, energy inputs must be optimized to maximize efficiency and minimize lifecycle CO2 emissions.

If successfully deployed, this technology could complement renewable-based hydrogen solutions and provide a scalable, industrial-ready pathway to cleaner hydrogen production. The Baytown demonstration plant will provide critical insights into operational efficiency, emissions management, and the commercial viability of methane pyrolysis.

Methane Pyrolysis vs. Other Hydrogen Methods

Energy Efficiency: Methane pyrolysis requires about 37.5 kJ of energy per mole of hydrogen, compared to 63.4 kJ for SMR and 285.8 kJ for water electrolysis. This shows methane pyrolysis is highly energy-efficient.

Lifecycle Emissions: Studies estimate methane pyrolysis produces 9–12 tons of CO2 equivalent per ton of hydrogen, depending on methane management and energy sources. SMR with carbon capture (CCS) has slightly higher emissions, while electrolysis emissions depend entirely on the electricity source. If powered by renewable electricity, electrolysis can achieve near-zero CO2 emissions, but grid electricity with fossil fuels increases emissions.

Full Lifecycle Benefits: Methane pyrolysis may also avoid some emissions linked to manufacturing and resource use for electrolyzers. Its efficiency and carbon byproduct make it a competitive low-carbon solution.

In summary, methane pyrolysis offers a balance between low emissions, energy efficiency, and economic feasibility. It competes well with SMR + CCS and is generally less energy-intensive than full electrolysis, though renewable-powered electrolysis has the lowest emissions if electricity is green.

BASF and Exxon’s Demonstration Plant to Validate Technology

BASF and ExxonMobil plan to build a demonstration plant at ExxonMobil’s Baytown Complex. This facility will produce up to 2,000 tons of low-carbon hydrogen and 6,000 tons of solid carbon annually. The project will validate the technology at scale and prepare it for commercial deployment.

This plant represents a key step toward making methane pyrolysis a practical solution for industrial hydrogen demand. By combining BASF’s chemical expertise with ExxonMobil’s experience in energy infrastructure, the companies aim to accelerate the global adoption of low-emission hydrogen.

A Strategic Leap for Clean Hydrogen Innovation

Moreover, ExxonMobil brings additional strengths to the partnership. The company owns the largest CO2 pipeline network in the U.S. and has extensive experience in fuels, chemicals, and low-carbon solutions. Combining this with BASF’s innovation in chemical processes makes the collaboration a powerful step forward for sustainable hydrogen production.

Overall, this partnership represents a major step in advancing low-emission hydrogen.

IEA predicts that low-emissions hydrogen production is set to grow significantly by 2030. Projects that are already operational or have reached final investment decisions (FID) are expected to produce 4.2 million tons per year (Mtpa) by 2030. It’s a fivefold increase compared with 2024.

IEA Green hydrogen
Source; IEA

Although this is still below the ambitious targets set by governments and industry earlier in the decade, it would raise the share of low-emissions hydrogen from less than 1% today to around 4% of total hydrogen production by 2030.

This growth is similar to the rapid expansion seen in other clean energy technologies, such as solar PV. In addition, a new assessment of announced projects suggests that another 6 million tons of low-emissions hydrogen could become operational by 2030, provided effective policies are in place to support demand and secure offtake agreements.

As industrial hydrogen demand rises and decarbonization becomes urgent, methane pyrolysis is set to play a key role in the energy transition. By combining their expertise, BASF and ExxonMobil are positioning themselves at the forefront of low-emission hydrogen innovation.

The post BASF and ExxonMobil Team Up to Boost Low-Emission Hydrogen with Methane Pyrolysis appeared first on Carbon Credits.

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Carbon Footprint

The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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