Dive Brief:
- Low-carbon iron startup Electra announced Tuesday that it has secured advance purchase agreements for its iron product from U.S. steelmaker Nucor and steel trader Toyota Tsusho, and its first environmental attribute credits will be purchased by Meta.
- Electra said it will build a 130,000 square foot demonstration facility in Jefferson County, Colorado, that is being supported by a $50 million grant from the Bill Gates-backed Breakthrough Energy Ventures.
- The green ironmaker said the facility is expected to be operational in mid-2026 and will be able to produce up to 500 tons of low-carbon iron using the company’s technology annually, according to the press release. The steel produced at the facility has already been contracted for use in iron sheet mills, specialty steel applications and auto manufacturing, the release said.
Dive Insight:
Meta’s environmental attribute credit purchase is a first for Electra. The agreement will give the social media and tech conglomerate credits connected to reduced emissions from Electra’s iron, the release said. The agreement also gives Meta, which has a goal to reach net-zero emissions across its supply chain by 2030, the option to purchase credits for emissions reductions from future Electra commercial facilities.
In addition to looking to advance the low-carbon iron and steel sector Meta has also experimented with utilizing other low-carbon materials like mass timber to lower its facilities’ embodied emissions. Meta announced in August that it had built an administrative building on an in-construction data center campus using mass timber and would be piloting its use in other similar buildings, warehouses and data halls at sites in Wyoming and Alabama.
Electra, founded in 2020, uses a low-temperature process that dissolves iron ore in an acidic solution before running electricity through the solution, according to the company’s website. The low-temperature method allows Electra’s technology to be compatible with intermittent renewable energy resources, like wind and solar, and used in electric arc furnaces to create steel.
Breakthrough Energy’s grant will come from its Breakthrough Energy Catalyst program, focused on scaling early commercial projects. The facility is also being supported by an $8 million Colorado industrial tax credit it received in May and a $186 million funding round Electra closed in April led by sustainable investment firm Capricorn Investment Group and Singapore-based investment firm Temasek.
“Steel production is one of the largest sources of emissions, driven primarily by the energy-intensive step of refining iron,” Breakthrough Energy Catalyst Head Marlo Fernandez said in the release. “Electra is reimagining the fundamentals of ironmaking, enabling a scalable, cost-effective pathway to low-carbon steel.”
The steel industry relies heavily on coal, due to its use in extracting iron from iron ore, and emissions from the iron and steel industries have risen due to a rise in steel demand, according to the International Energy Agency. Steel production accounts for 11% of global emissions, according to Global Energy Monitor.
The U.S. Department of Energy found that 67% of steel produced in the U.S. in 2018 utilized electric arc furnaces — compatible with Electra’s iron byproduct — while Global Energy Monitor found that, globally, these furnaces are used in 32% of steel production. Meanwhile, 68% of global steel production relies on the more emissions-intensive and higher-temperature blast furnace method. Both methods of production typically rely on fossil fuels like coal, natural gas or gasified coal, according to the Institute for Energy Economics and Financial Analysis.
“With binding commitments and support from strategic partners, we are proving that pure iron can be made resourcefully and scaled quickly to meet global demand,” Electra CEO and Co-founder Sandeep Nijhawan said in the release.
Nucor — the largest steel manufacturer in the U.S. — will use its purchased iron from the facility in its sheet mills. The company participated in the April funding round, and Al Behr, Nucor’s executive vice president of raw materials, said in Tuesday’s release that the facility “lays the groundwork for a new era of low-carbon materials.”
Toyota Tsusho America, a steel trading company within the broader Toyota Group portfolio, said it will distribute its purchased green iron to steelmakers and auto manufacturers. European steel and metals distributor Interfer Edelstahl Group — who also participated in the April funding round — was the final advance purchaser of the facility’s iron announced, and Interfer will distribute it to its customers for specialty steel applications.
