Boston Metal gets big funding boost to make green steel

Green-steel startup Boston Metal closed another major funding round this week as it looks to crack the code on producing fossil-fuel-free steel. The new investment brings its Series C total to $262 million and will allow the MIT spinout to scale its novel steelmaking technology at first-of-a-kind facilities in Boston and southeastern Brazil, the company said on Wednesday.

The news comes after an initial Series C funding announced in January, which was led by global steel giant ArcelorMittal. Boston Metal’s backers also include the venture-capital arms of mining and oil giants BHP and Saudi Aramco, as well as major climatetech funds such as Breakthrough Energy Ventures, Microsoft’s Climate Innovation Fund and Prelude Ventures.

Funding is pouring into the green-steel space as manufacturers work to curb emissions from steelmaking, a heavily polluting and hard-to-decarbonize industry. Automakers, construction companies and government agencies — under pressure themselves to procure low-emission materials — are increasingly leaning on long-standing manufacturers and startups alike to deliver cleanly produced steel, very little of which is available today.

“The timing really seems to be right for bringing the technology to market,” Adam Rauwerdink, senior vice president of business development at Boston Metal, told Canary Media before this week’s announcement. ​“Demand is far outpacing supply at this point.”

Separately, Swedish startup H2 Green Steel on Thursday said it raised €1.5 billion ($1.6 billion) of equity to help finance the world’s first large-scale green steel plant, which will use hydrogen produced from renewable electricity — instead of coal — to process iron needed for steelmaking.

Manufacturers produce nearly 2 billion metric tons of the high-strength material every year, which is used in everything from cars, bridges, railways and roads to household appliances like refrigerators and washing machines.

Globally, about 70 percent of that steel comes out of giant, extremely hot ​“blast furnaces” that use purified coal to drive chemical reactions that turn iron ore into iron. These and other types of steel facilities also rely on coal-fired power plants to deliver the huge amounts of electricity required to heat metal and power their operations.

As a result, steel production accounts for between 7 and 9 percent of anthropomorphic global greenhouse gas emissions, according to the World Steel Association.

While H2 Green Steel and other companies are looking to replace coal with clean hydrogen in conventional steel operations, Boston Metal is trying to rewrite the script entirely. The company’s approach doesn’t directly involve any fossil fuels, and it sidesteps the need for deploying large, energy-hungry electrolyzers to produce hydrogen from water.

Founded in 2012, Boston Metal is developing a process called ​“molten oxide electrolysis,” or MOE, which involves using electric currents to heat iron ore to around 1,600 degrees Celsius — hotter than molten lava — to drive chemical reactions. The resulting material then cools into blocks of steel. The process can also be used to extract high-value metals such as chrome, manganese and niobium from mine-waste ​“tailings,” eliminating the need to mine such metals directly from the earth.

For now, Boston Metal is primarily focusing on building its high-value metals business. The company’s Brazilian subsidiary, Boston Metal do Brasil, is building the first commercial-scale facility to use the MOE technology. The company will sell the extracted metals to steelmakers, which use them as additives in steel furnaces to make steel stronger or corrosion-resistant.

The Brazilian plant, which is slated to start running next year, will produce 10,000 metric tons per year of niobium when it reaches full operations in 2026, Rauwerdink said.

“We’re starting with smaller-volume plants with much higher-value metals and higher margins,” he said. He noted that a kilogram of niobium might sell for $40, while crude steel sells for around 40 cents a kilogram — a price point that makes it harder for emerging startups with novel technologies to compete with global incumbents.

“This lets us get the [MOE] technology into the market at an earlier, smaller scale,” he said of Boston Metal’s strategy. 

Meanwhile, the company is still working to refine and scale its steel-focused operations, with its first demonstration plant expected to come online in the Boston area in 2026.

“Boston Metal has made remarkable progress on the maturation of its MOE technology and business model, which has the potential to decarbonize steelmaking at scale,” Carmichael Roberts, the business lead for Breakthrough Energy’s investment committee, said in a statement following the Series C closing.

“We’re proud to continue our investment in the company, as it’s an example of the high-impact technology we seek to support solving the world’s most pressing climate problems,” Roberts added.