Nucor Corporation (NYSE: NUE), the largest steel producer in the United States, is partnering with a Boulder-based startup that developed a method to refine iron without the use of coal or greenhouse gas emissions — technology that Nucor's president said could "change the steel industry as we know it."
Nucor invested an undisclosed amount of equity in Electra, which is the brainchild of Sandeep Nijhawan, a serial founder in green technology. By working with Nucor, Nijhawan aims to demonstrate how his method of refining iron ore could be widely adopted by the steelmaking industry.
"By leveraging the knowledge and expertise of partners like Nucor, Electra will scale its novel process ... with a keen understanding of industry needs and constraints," Nijhawan told the Denver Business Journal.
At Electra's lab in Boulder, Nijhawan and his team developed an electrochemical process to refine iron ore into pure iron at just 140 degrees Fahrenheit using renewable electricity. Iron is the substance that makes up 98% of steel, and the United States uses about 110 million tons of steel each year.
Traditional steelmaking is done using coal, which heats to 2,912 degrees and emits about two tons of carbon dioxide for every ton of steel produced. The industry is responsible for about 10% of carbon emissions globally each year, making it one of the world's dirtiest industries.
Electra's iron is ideal for steelmaking that relies on electric arc furnaces, rather than blast furnaces, Nijhawan said. Nucor uses electric arc furnaces to recycle scrap metal into new steel products.
"We are excited to partner with Electra and its revolutionary process to produce emission-free iron," Nucor President and CEO Leon Topalian said in a statement. "Just as Nucor changed the face of the steel industry 53 years ago with our first electric arc furnace, successfully developing and scaling up a zero-carbon iron product is the type of transformative technology that could change the steel industry as we know it."
Nucor, based in Charlotte, North Carolina, said its investment in Electra is one of several the company is making to help further its status as a leader in sustainability in the steelmaking industry and help mitigate steel's carbon-intensive production process.
"We are focused on investing our capital on opportunities like these that have the potential to take our company and the entire industry to the next level," Doug Jellison, Nucor's executive vice president of raw materials, said in a statement. "We will continue to look to the future for new and innovative ways to help our customers achieve their sustainability goals."
With the partnership, Jellison joined Electra's market advisory board. The deal comes just two months after Electra raised $85 million from several venture-capital firms, including Bill Gates' venture capital fund, Breakthrough Energy Ventures, as well as Amazon's Climate Pledge Fund and other investors.
Going forward, Nijhawan is looking to enter into more partnerships with steelmakers that could help advance the use of green steel throughout the industry, he said.
In addition to cutting the carbon emissions associated with refining iron, Electra says its technology can solve another huge problem facing the industry: the worldwide shortage of high-quality iron ore. Many environmentally-friendly solutions to steelmaking require ore with an iron content of 67% or above, of which there's an "insufficient supply," according to a report by the Institute for Energy Economics and Financial Analysis.
Electra's process allows for the use of lower-grade ores with iron content as low as 35%, the company said. That kind of ore is treated as waste in today's steelmaking.
This year, Electra is working to complete a pilot production plant at its Boulder headquarters. It also opened a new development facility in Boston, where it's recruiting more engineers and scientists.
