Hydrogen is the simplest and most common molecule known to exist, and because of that it is a part of almost every other substance, such as water and hydrocarbons. Hydrogen is also found in biomass, which includes all plants and animals.
There are several methods for creating hydrogen fuel, but the most common nowadays is via steam-methane reformation, a process by which high-temperature steam (1,000 degrees Celsius) creates a reaction with methane gas in the presence of a catalyst to produce hydrogen, carbon monoxide, and a relatively small amount of carbon dioxide. The carbon dioxide and other impurities are then removed through a process called "pressure-swing adsorption," leaving essentially pure hydrogen. Steam reformation can also be used with ethanol, propane, or even gasoline to produce hydrogen.
Steam-methane reformation is most commonly used by oil refineries, which then use the remaining hydrogen to remove impurities, such as sulfur, from petroleum and diesel fuels.