Hydrogen producer Vema Hydrogen has signed a hydrogen purchase and sale agreement with Verne, a provider of on-site power and cooling systems for data centers.

Under the terms of the agreement, Verne will use hydrogen supplied by Vema to generate ‘low-emissions’ power for data center customers, with operations slated to begin as early as 2028.

The deal centers on Vema’s Engineered Mineral Hydrogen (EMH), a production method that utilizes subsurface mineral reactions to generate hydrogen. The companies claim the agreement reflects growing interest in alternative energy sources as data center power demand continues to rise.

As part of the ten-year deal, Vema plans to scale production to more than 36,000 tons of hydrogen per year. The hydrogen will be used by Verne to support on-site power generation for data center facilities, reducing reliance on grid capacity in constrained markets.

Ted McKlveen, co-founder and CEO of Verne, said: “Artificial Intelligence is driving unprecedented demand for power, and the industry desperately needs scalable solutions like Vema’s Engineered Mineral Hydrogen. We are excited to partner with Vema to offer our data customers a solution that meets not only their rising power needs, but also their sustainability goals.”

Vema’s technology is designed to produce high-purity hydrogen using geoscience techniques, which the company said can support gigawatt-scale energy demand.

The approach targets iron-rich geological formations where hydrogen can be generated when minerals react with water.

Vema drills into suitable sites and injects water and non-toxic catalysts to accelerate these naturally occurring reactions. As the minerals react, hydrogen gas is released, moves through the subsurface, and is collected via production wells.

The agreement expands Vema’s footprint in California, following its recent designation as a qualified supplier to the First Public Hydrogen Authority, which is currently developing a statewide hydrogen network.

Pierre Levin, CEO of Vema Hydrogen, said the partnership is aimed at addressing growing grid constraints tied to data center expansion. “There is a robust market for baseload power generation across the US, where data centers are straining the grid,” Levin said. “With our Engineered Mineral Hydrogen and Verne’s power solutions, data centers will have access to affordable, clean power that is not dependent on state or federal incentives.”