There are experiments (currently underway in Germany) to extract hydrogen from natural gas without burning the resulting carbon, leaving behind graphite powder which can then be either buried or fed into carbon-composite manufacturing.

Ultimately becomes CO2. Because it's produced centrally, you could collect it and do something with it or store it.

It's possible to just leave it as carbon. The energy needed to convert methane to carbon + H2 is much less (per unit H2) than that needed to convert water to O2 + H2.