It has been understood that production of hydrogen from fossil and carbonaceous fuels with reduced CO2 emission to the atmosphere is key to the production of hydrogen-rich fuels for mitigating the CO2 greenhouse gas climate change problem. The conventional methods of hydrogen production from fossil fuels (coal, oil, gas and biomass) include steam reforming and water gas shift mainly of natural gas (SRM). In order to suppress CO2 emission from the steam reforming process, CO2 must be concentrated and sequestered either in or under the ocean or in or underground tin aquifers, or depleted oil or gas wells). Up to about 40% of the energy is lost in this process. An alternative process is the pyrolysis or the thermal decomposition of methane, natural gas (TDM) to hydrogen and carbon. The carbon can either be sequestered or sold on the market as a materials commodity or used as a fuel at a later date under less severe CO2 restraints. The energy sequestered in the carbon amounts to about 42% of the energy in the natural gas resource which is stored and not destroyed. A comparison is made between the well developed conventional SRM and the less developed TDM process including technological status, efficiency, carbon management and cost. The TDM process appears to have advantages over the well developed SRM process. It is much easier to sequester carbon as a stable solid than CO2 as a reactive gas or low temperature liquid. It is also possible to reduce cost by marketing the carbon as a filler or construction material, The potential benefits of the TDM process justifies its further efficient development. The hydrogen can be used as a transportation fuel or converted to methanol by reaction with CO2 from fossil fuel fired power plant stack gases, thus allowing reuse of the carbon in conventional IC automobile engines or in advanced fuel cell vehicles. (C) 1999 International Association for Hydrogen Energy. Published by Elsevier Science Ltd. All rights reserved.