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Another milestone for green steel production

Green steelmaker Boston Metal gets $120 million to decarbonize steel and metals production.

Boston Metal

A molten oxide electrolysis cell. Courtesy of Boston Metal

For every ton of steel produced, close to 2 metric tons of carbon dioxide is released into the atmosphere. Indeed, North America’s largest steel mill in East Chicago, Indiana, coughs up 2 billion pounds of CO2 annually — while producing roughly 50 pounds of steel per year for every person in the United States.

Those were two of the more sobering revelations shared by Rebecca Dell, program director for the industry initiative at ClimateWorks Foundation, as part of her stat-packed, stand-and-deliver presentation during VERGE Electrify last year. The numbers are going in the wrong direction, Dell pointed out, with industrial emissions rising at twice the rate of overall "climate-changing" emissions. 

That number is comprehensive: It includes the impact of cement, fertilizer, chemicals and more, which collectively account for close to 40 percent of GHG emissions produced on an annual basis. But since steel is one of the most widely used materials in our economy — the sector produces more than 1.8 billion metric tons each year — it deserves far more attention

"While we all know the importance of energy efficiency, most businesses haven’t put much thought into material efficiency," Dell noted. Alongside the discipline that will take, it’s the responsibility of steel buyers to prioritize procuring materials that are made in the least harmful way possible. "The industries that drive climate change damage need partnership from their customers and supply chains if they are going to make the switch," she said during VERGE Electrify. "That partnership means sharing information, sharing risk, developing solutions together, committing in advance to purchasing clean materials, and advocating together for public policies that will make our low-carbon transition possible."



That’s the spirit of the $120 million Series C round disclosed in late January for green steel venture Boston Metal, led by multinational steel company ArcelorMittal. Boston Metal is working on a number of applications for emissions-free steel and metals production that build off its molten oxide electrolysis process, which uses renewable electricity to convert iron ore or other feedstocks into high-purity liquid metal. ArcelorMittal sees the approach as another tool in its XCarb Innovation Fund portfolio, which invests in "breakthrough" technologies for decarbonizing steel production. Its contribution to this transaction was $36 million, its single-largest climate tech investment to date. 

"In Boston Metal, we are investing in a team that has made impressive progress over a relatively short period of time, developing a technology that has exciting potential to revolutionize steelmaking," noted Aditya Mittal, CEO of ArcelorMittal, in a statement.  

Boston Metal has raised a total of $220 million including this latest fundraise, according to Adam Rauwerdink, senior vice president of business development at Boston Metal. The infusion will be used to expand the startup’s capacity in Boston, and to help support the design and selection of a new commercial-scale site. Boston Metal’s approach is modular, with each electrolysis "cell" capable of producing 5,000 to 10,000 tons of steel annually, Rauwerdink told me. (A large facility would include several hundred of the modules, so do the math.) The new facility will likely be in the Northeast, where there is available clean energy on the grid, he said, but other details haven’t been disclosed. 

In addition to the new plant, the money will underwrite the construction and commission of a separate manufacturing facility in Brazil focused on recovering high-value materials from mining slag, starting with tin and niobium. That facility is expected to post its first revenue sometime this year, Rauwerdink said.

ArcelorMittal isn’t Boston Metal’s only publicly declared high-profile potential customer. The company is also allied with mining giant BHP and automaker BMW, both of which invested through their corporate venture arms in 2021. BMW’s plants in Europe process more than a half-million metric tons of steel annually, the company disclosed at the time of its investment. 

Steel yourself

Both ArcelorMittal and Boston Metal are members of ResponsibleSteel, a program that is independently auditing and rating steel production sites not just for their emissions and pollution impacts but also on water use, labor rights, source materials and so forth. Many stakeholders contributed to the creation of the standard, including the aforementioned companies along with Tata Steel, U.S. Steel and Thyssenkrupp, and NGOs including Ceres, Clean Air Task Force, Climate Group and Mighty Earth. 

Just last week, ArcelorMittal earned its latest ResponsibleSteel certification for its facility in Warsaw, Poland. First opened in 1957, the factory includes the eighth electric arc furnace certified under the program. The technology uses electric currents to melt scrap and recycled steel. Globally, close to three-quarters of virgin steel is produced in blast furnaces fueled by coke (cooked coal!), limestone and iron ore, but the dominant method in the U.S. is arc furnaces, according to the American Iron and Steel Institute. The largest U.S. steelmaker, U.S. Steel, is making a big bet on electric arc furnaces, and it is selling a product line called VerdeX that it says is produced using "one quarter of the carbon intensity required for comparable products."

Alongside the ResponsibleSteel work, Climate Group is managing a SteelZero campaign, recognizing companies that have committed to "procuring, specifying or stock 100 percent net-zero steel by 2050 at the latest." As of Feb. 6, there were 31 pledgers on that list, including a number of big construction companies such as Skanska and maritime shipping giant A.P. Moller-Maersk. 

High-profile ventures tackling the green steel challenge include H2 Green Steel, which is using hydrogen created by renewable energy to fuel its process and was one of the first three companies to snarf up some money from Just Climate, the new climate tech fund set up by Al Gore’s Generation Investment Management. You should also watch Electra, which has the backing of Amazon and Breakthrough Energy Ventures. One of Electra’s most notable industrial investors is Nucor, the largest user of electric arc furnaces and a major steel scrap recycler. Nucor is also a founding member of the Global Steel Climate Council, an industry group that is advocating for a single global standard for green steel that considers total emissions generated, regardless of the production method.   

When it comes to buying commitments, the initiative to watch is the First Movers Coalition, organized by the World Economic Forum. As of this writing, 20 companies have agreed to shift at least 10 percent of their steel purchases to sources that use "near zero" emissions technologies by 2030. Among the companies that have signed up are renewable energy developers Enel, Engie and Iberdrola, and vehicle manufacturers Ford, Scania and Volvo. To Dell’s point above: Steel buyers need to buy green steel, and these are companies that have promised to do just that. 

And when it comes to financing, keep your eyes on the Sustainable Steel Principles, managed by nonprofit RMI. The framework provides a way for financial institutions to ensure that the money they are lending to steel companies is used to support the net-zero transition. The initial signatories — Citi, Credit Agricole, CIB, ING, Societe Generale, Standard Chartered and UniCredit — represented more than $23 billion in commitments to the industry, about 11 percent of private sector lending, according to RMI. 

One last resource to offer: The Green Steel Tracker from nonprofit Leadership Group for Industry Transition, which lists projects, status and potential production capacity.  

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