A capsule having a hydrogen gas permeable shell with solid-state hydride material, such as hydrogen rich LiAlH4, Li3AlH6, and/or AlH3 encapsulated therein. The hydrogen gas permeable shell has pores that are between about 1 nm to about 150 μm in diameter to allow hydrogen gas to be extracted from the capsule. After passing the capsule through a hydrogen extraction zone, the capsule containing the spent solid-state hydride material is removed and is sent to recycling, wherein the capsule is opened to remove the spent solid-state hydride material, and the spent solid-state hydride material is rehydrogenated and repacked in a hydrogen gas permeable shell. The shell of the spent solid-state hydride material can be recycled and reused to make new shells.