Hydrogen production plants are among major sources of CO2 emissions into the atmosphere. The objective of this paper is to explore new routes to hydrogen production from natural gas (or methane) with drastically reduced CO2 emissions. One approach analyzed in this paper is based on thermocatalytic decomposition (or pyrolysis) of methane into hydrogen gas and elemental carbon over carbon-based catalysts. Several heat input options to the endothermic process are discussed in the paper. The authors conduct thermodynamic analysis of methane decomposition in the presence of small amounts of oxygen in an autothermal (or thermo-neutral) regime using AspenPlus(TM) chemical process simulator. Methane conversion, products yield, effluent gas composition, process enthalpy flows as a function of temperature, pressure and O-2/CH4 ratio has been determined. CO2 emissions (per m(3) of H-2 produced) from the process could potentially be a factor of 3-5 less than from conventional hydrogen production processes. Oxygen-assisted decomposition of methane over activated carbon (AC) and AC-supported iron catalysts over wide range of temperatures and O-2/CH4 ratios was experimentally verified. Problems associated with the catalyst deactivation and the effect of iron doping on the catalyst stability are discussed. (C) 2006 Elsevier B.V. All rights reserved.