Photo by Arian Fernandez
Steel Plant Next to a Daycare
In Woburn, Massachusetts, a small industrial and retail estate houses an unusual mix of businesses: a children’s daycare, a gym, a tax advisor – and a pilot steel plant. This unusual setting highlights how steel production might evolve in the future, according to Adam Rauwerdink, vice president of business development at Boston Metal, a US-based green steel start-up. “People are dropping off their kids. That kind of shows you an extreme example of what the future of steel looks like,” he said. “You can be making steel and sharing a parking lot with a daycare.”
Boston Metal’s Electrolysis Innovation
Boston Metal has pioneered a new method of using electricity to strip oxides and other impurities from iron ore – the key raw material for steelmaking. Their process distributes the ore within an electrolyte and then heats the mixture to 1,600C using electrical power. The result: molten iron separates cleanly from waste materials and can be tapped for further use.
Traditional Steel’s Climate Burden
Conventional steelmaking relies heavily on blast furnaces powered by fossil fuels, a process that significantly contributes to climate change. The iron and steel industry is responsible for 11% of global carbon emissions – equivalent to the combined emissions of every private car and van worldwide. The urgency to decarbonise steelmaking has accelerated efforts to develop greener alternatives, with the US leading some of these initiatives.
America’s Edge in Greener Steel
The US steel sector is already cleaner than many of its global counterparts thanks to the widespread adoption of electric arc furnaces. These furnaces rely on electricity rather than coal to melt down scrap steel for recycling. Emerging start-ups such as Boston Metal believe they can go further, using electricity not just for recycling but for the iron-making process itself – the crucial first step in creating brand new, or virgin, steel.
Political Uncertainty and Green Energy Projects
Yet, political headwinds remain. The Trump administration has been reluctant to embrace renewable energy and decarbonisation projects, raising doubts about whether these innovative start-ups can make a meaningful impact on the steel industry soon.
Benefits of Electric Arc Furnaces
Switching from traditional blast furnaces to electric arc furnaces can slash emissions significantly – from 2.32 tonnes of CO2 per tonne of steel to just 0.67 tonnes. Other options for ironmaking involve green hydrogen, produced using 100% renewable electricity. According to Simon Nicholas, lead steel analyst at the Institute for Energy Economics and Financial Analysis, hydrogen offers potential, but its rollout has been rocky.
Stalled Hydrogen Ambitions
For instance, in June, US steel giant Cleveland-Cliffs appeared to retreat from a planned $500m (£375m) hydrogen-powered steel plant in Ohio. Although contacted, the company has yet to comment. Nicholas notes, “We’re seeing projects cancelled, proponents pulling out of projects all over the place,” particularly concerning green hydrogen ventures.
Scrap Steel Limitations
Despite the promise of electric arc furnaces, their reliance on scrap steel supply poses challenges. In China, a shortfall of scrap relative to soaring demand has slowed the expansion of arc furnace technology. This bottleneck suggests opportunities exist for firms like Boston Metal to introduce alternative steelmaking methods.
Electrochemical Approaches Show Promise
Paul Kempler, an electrochemistry expert at the University of Oregon, observes that Boston Metal’s process “looks a lot like how we make iron and steel today – it’s a lot easier to conceive how that would get to scale [as a result].” Still, he warns of potential issues with corrosion in electrolysis systems over long periods. Boston Metal is aiming to open its first demonstration-scale steel facility by 2028.
Meanwhile, Colorado-based start-up Electra is developing a lower-temperature method to purify iron from ore. Their process operates at just 60–100C: iron ore is dissolved in an acidic solution and then subjected to an electrical charge, causing pure iron to collect onto metal plates, much like copper or zinc production today.
Electra’s Low-Temperature Model
“Plates are extracted automatically out of the solution and the iron is harvested,” explained Sandeep Nijhawan, Electra’s co-founder and CEO. A demonstration plant in Colorado, expected to produce 500 tonnes of iron annually, is scheduled to open next year.
Although initial production costs will be higher than conventional methods, Nijhawan believes the “green premium” will diminish as the company scales up. Nicholas, however, stressed that time is critical: “We’re running short of time for addressing carbon emissions.”
Market Entry Challenges and the Role of Investment
For firms like Boston Metal and Electra, the biggest hurdles remain scaling up and securing market acceptance. Without substantial investment and customers willing to pay for greener steel, progress could stall.
Tariffs and Policy Complications
At the same time, President Trump’s steel tariffs, designed to protect domestic producers, could backfire by raising steel costs for US buyers. Asked for his view, Rauwerdink said Boston Metal welcomed the policy, describing tariffs as “beneficial” for the company given the emphasis on critical metals.
Yet, he also acknowledged challenges stemming from fluctuating government attitudes toward renewable energy. For Boston Metal and similar innovators, access to cheap renewable electricity is vital to electrifying industries historically dominated by fossil fuels. “The industry has growing pains there, for sure,” Rauwerdink admitted.
