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The green steel movement has been zeroing in on electric arc furnaces to clean up carbon emissions from steel making, setting the stage for significant sustainability improvements in the auto industry as well as construction and practically every other major economic sector on the planet. However, there’s a catch. Electric arc furnaces require high-purity iron ore, which is in short supply — oh, wait….
The Green Steel Movement Needs Green Iron
CleanTechnica caught wind of an emerging green steel solution back in 2022, when the US startup Electra emerged from stealth mode. By that time, the majority of steel in the US — about 70% — was already produced by electric arc furnaces, providing new opportunities for introducing wind, solar, and other renewables into the process.
That’s all well and good if the task of the furnace is to melt scrap metal. However, for steel makers that are starting from scratch with iron ore, kicking fossil energy out of the process is more than a matter of generating the same level of heat. The carbon-enabled reduction of iron ore also needs to be replicated somehow. Green hydrogen has emerged as one workaround, but that requires iron ore of at least 67% purity.
With that in mind, it’s no surprise that one leading green steel stakeholder, Arcelor Mittal, recently announced a pause in its green hydrogen plans due to uncertainty over costs and policies. Still, other stakeholders are moving forward, one example being the Swedish startup Stegra (formerly H2 Green Steel), which has secured high quality iron ore supply agreements with the leading producers Vale and Rio Tinto for its new green steel facility in Boden.
Even if a new wave of policies (and subsidies) rises up to support green steel stakeholders, the global supply of high-purity ore could throw a monkey wrench into the works. The Institute for Energy Economics and Financial Analysis, for example, has noted that only about 4% of the global iron ore supply currently makes the 67% purity cut.
Sustainable, High Purity Iron For Green Steel
Electra’s solution to the green steel problem is to leverage renewable energy and electrochemistry in a modular system that dissolves low-purity iron ore, including ores under 55%, and holds it in a solution state while removing impurities. The purity angle enables Electra to apply its process to millions of tons of “stranded” low-grade coal that has already been mined.
In addition to cutting energy-related carbon emissions, the electrochemical process speeds up the dissolution step. The result is a high-purity ore suitable for use in electric arc furnaces. To gild the green lily, Electra notes that its ore can also contribute to the steel recycling chain.
“As a high-quality ore-based metal, Electra’s clean iron also allows EAFs to recycle a broader range of scrap in their steel production processes, paving the way for a cleaner, more sustainable and circular steel industry,” the company notes, with EAFs referring to electric arc furnaces.
Big Thumbs-Up For Green Steel From A-List Investors
When Electra broke out of stealth mode, it already had the backing of high profile clean tech investors including Breakthrough Energy Ventures along with, S2G Ventures, Capricorn Investment Group, Temasek, Lowercarbon Capital, Nucor, BHP Ventures, Climate Pledge Fund, Valor, and Baruch Future Ventures.
All that hard work is about to pay off. Last spring, Electra announced the launch of a pilot-scale iron ore facility in Colorado. “Electra’s pure iron metal is uniquely positioned to allow the upcycling of a broader range of steel scrap into higher-value sustainable steel products, improving the circularity and sustainability of the steel industry,” enthused Nucor EVP of Raw Materials Noah Hanners in a press statement.
The Nucor angle is particularly interesting because it adds public-sector investors to the green steel movement. Nucor has set up a green steel shop in Kentucky featuring electric arc furnaces, with the double-whammy aim of producing low carbon steel for offshore wind turbines. The venture received a substantial leg up from the Kentucky Economic Development Finance Authority, with a preliminary agreement from 2019 listing up to $30 million in job-related state tax incentives plus another $10 million in incentives related to construction costs and other expenses, among other goodies.
More High Purity Iron Ore Is On The Way
In the latest development, Electra has just entered into a collaborative agreement with the global steel trader Interfer Edelstahl Group. The German firm is positioning itself as a leading advocate for green steel in the European market.
“With access to a reliable supply of high purity, clean iron from Electra, Interfer will support customers in reaching their decarbonization goals,” Intefer explained in a press statement, noting that Electra’s ore is 99% pure. Interfer also expects the relationship to a contribute to an impressive 42% cut in its own greenhouse gas emissions across Scopes 1, 2, and 3, compared to a 2022 baseline.
Electra is counting on its modular system to facilitate rapid deployment, so keep an eye on both Interfer and Nucor for upcoming developments.
Green Steel Movement And The Sustainable EV Of The Future
Adding to the motivation is the sustainability think tank RMI (Rocky Mountain Institute), which points out that steel users are clamoring for a decarbonization makeover. “Consumer companies have made ambitious commitments to procure cleanly-produced steel through initiatives like the First Mover’s Coalition and SteelZero,” RMI notes.
RMI estimates that the demand for green steel — meaning near-zero emissions — will total 6.7 million tons by 2030. To help motivate steel makers in the North American market, last year the nonprofit launched a new initiative called the Sustainable Steel Buyers Platform, aimed at aggregating demand among steel users into one powerful, coordinated message.
“By convening steel purchasers and coordinating collective low-emissions steel procurement in North America, the SSBP is giving steelmakers the offtake agreements they need to spur project investment and accelerate the energy transition across this vital sector,” RMI explains.
The leading solar hardware firm Nextracker was among the steel-dependent manufacturers to join SSBP at its launch. Other high profile members include Microsoft, Invenergy, and Meta. Electric vehicle manufactures should be jumping all over the green steel movement, too. RMI estimates that green steel can cut almost 30% of lifecycle emissions from cars.
SSBP got a big helping hand from the Biden administration earlier this year, which announced $1.5 billion in funding for a group of six new iron and steel decarbonization projects. The projects represent a range of electrification pathways along with a hydrogen-ready system under the wing of Cleveland-Cliffs Steel Corporation, and an energy efficient briquette-based venture spearheaded by Vale.
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Image (cropped): The green steel movement is gaining momentum, as demonstrated by a new collaboration between the US startup Electra and the leading global steel trader Interfer Edelstahl Group (courtesy of Electra).
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