In the era of climate change, startups across a majority of industries are actively trying to find ways to reduce global greenhouse gas emissions, thereby rejuvenating the industry approach to production while garnering significant market interest thanks to their green initiatives. Governments and international agencies worldwide have been incentivizing this drive through material investments and subsidies, making it worthwhile for companies to find a greener approach.
In 2020, the worldwide steel industry played a significant role in contributing to greenhouse gas emissions, responsible for approximately 7% of the total global greenhouse gas emissions. This figure rose to $1.95 billion in 2021, accounting for roughly 10% of global greenhouse gas emissions during the year.
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Boston Metal: Changing the Game with Green Production
U.S.-based steel-producing startup Boston Metal is pioneering the shift toward clean steel production by "replacing coal with electrons." Established in 2013, the company originated from research conducted at the Massachusetts Institute of Technology and subsequently secured a cumulative funding of $250 million. Boston Metal has yet to commence revenue generation and remains in the process of refining the ultimate technology for large-scale clean steel production.
The company has garnered significant support from venture capitalists and international organizations alike, recently securing a $20 million investment from the World Bank's International Finance Corporation.
“Boston Metal has the potential to drastically change the way steel is made and in so doing help countries achieve their emissions targets. The company’s plant in Brazil can help put a key segment of the country’s manufacturing sector on a path of sustainable growth with a competitive edge,” said IFC's Managing Director Makhtar Diop.
Notably, this marks the IFC’s inaugural investment in a startup that has not yet generated revenue. This decision underscores the World Bank’s recognition of the importance of aiding low-income nations in producing carbon emissions-free steel.
In 2021, the majority of crude steel production, accounting for 59%, took place in developing countries, as reported by the IFC. The IFC further asserts that Boston Metal’s innovative process holds particular appeal for developing nations that also possess access to clean electricity. This includes countries such as Chile, Ethiopia, Malawi, Uruguay, and Zambia.
The company has also garnered substantial investment from prominent entities, including ArcelorMittal (the world’s second-largest steel producer), Microsoft’s Climate Fund, Bill Gates’ Breakthrough Energy Ventures, and now, the World Bank.
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Clean Steel Production
Traditionally, the steel-making process involves introducing iron ore or iron oxide into a blast furnace powered by coal, resulting in substantial carbon dioxide emissions. In contrast, Boston Metal employs an electro-chemical technique known as molten oxide electrolysis.
While Boston Metal continues to refine the technology for commercial-scale implementation, the company is yet to generate revenues. It is currently in the concluding phases of fine-tuning the technology, as stated by Boston Metal's CEO Tadeu Carneiro.
"It's no longer a binary thing that you will fail or you will succeed," Carneiro said, "It's a question of how long will be the life of the anode? Is it going to last three years or two years? That's where we are now, we are finalizing all the parameters in order to build the biggest, the largest industrial cell. So that's where we are."
While Boston Metal’s primary objective revolves around the production of environmentally friendly steel, the company is also leveraging its core electrolysis technology to extract tin, niobium, and tantalum metals from materials typically considered mining waste. The Brazilian metal-generation venture is poised to be the initial revenue generator for Boston Metal.
Licensing Business
Boston Metal's business is designed to generate revenues from two sources – production and sale of anodes used in producing green steel, as well as licensing the technology for low and middle income countries.
"The modular technology of Boston Metal allows a small country like Burkina Faso to build their own steel plant, to have their own steel production — as opposed to importing it from India and paying hard currency outside of the country when it could actually do it internally," said IFC Director William Sonneborn.
The company is currently in the process of securing funding, aiming to reach a total of $300 million. To date, they have successfully completed half of this fundraising effort. Roughly one-third of the $300 million will be allocated to advancing this initiative within their Brazilian subsidiary, where they will utilize their most substantial device constructed to date.
The remaining two-thirds of the $300 million funding is slated be allocated towards completing the refinement of the steel manufacturing process and its associated components. Boston Metal’s objective is to achieve commercial-scale production of environmentally friendly steel by 2026. The company also aims to commence technology licensing to steel producers around the world by 2026.
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