One of the largest obstacles facing climate activists is decarbonizing the steel industry, but solutions are starting to materialize. Recent developments include the US startup Electra emerging from stealth status with a revolutionary green steel recipe and a $84 million financial boost from a consortium of A-list clean tech investors, including Breakthrough Energy Ventures.
A NEW GREEN STEEL PROCESS TO FIX THE PROBLEM OF LAX IRON ORE We need to do some catching up because Electra is new to CleanTechnica.
About 70% of the steel produced in the US is done so using electric arc furnaces, which is a good start. Unlike blast furnaces powered by fossil fuels, electricity allows for the production of green steel using wind, solar, and other renewable energy sources.
That’s all well and good, but higher grades of iron ore are needed for the production of steel. According to Electra, commercial grade iron ores must contain at least 62% iron, while furnaces powered by natural gas or hydrogen must have at least 67% iron concentration.
For steelmakers, this reliance on high-grade iron ore is a double whammy. It can increase prices and restrict the supply of domestic goods.
Electra came up with a solution that, well, includes a solution. The plan is to extract the iron by dissolving less expensive, low-grade iron ore in a solution. According to the business, their technique may be used on ores with as little as 35% iron concentration.
Under normal circumstances, the process of dissolving iron ores is “excruciatingly slow,” as stated by Electra. Additionally, pure iron is more unstable than other substances floating in a solution, making it challenging to remove.
By reconfiguring common electrochemical and hydrometallurgical processes, Electra’s method gets rid of those barriers.
According to Electra CEO Sandeep Nijhawan in an press release , “Our team, beginning from a clean sheet of paper, devised an electrochemical technique to purify iron ore to high quality iron by significantly lowering the process temperature from 1,600 to 60 degrees Celsius.”
The low-temperature process can run continuously or intermittently, allowing it to utilize available wind or solar energy without necessarily requiring a substantial investment in energy storage.
Additionally, the utilization of lower-grade ores may help the US move up the list of top steel producers.
Additionally, Nijhawan remarked, “We have a historic chance to reshore manufacturing and mining jobs and to decentralize the world’s iron and steel supply chain.
Issue resolved! The bottleneck in the supply chain for green steel is already present. Last June, our friends at SP Global pointed out that a “ shortage of high-quality iron ore in the marketplace offers a considerable challenge for steelmakers that are trying to cut their carbon emissions.” They cited a recent analysis from the Institute for Energy Economics and Financial Analysis.
Green hydrogen-based technologies require less carbon than conventional blast furnaces to create steel, but they also demand higher-grade iron ore.
Direct Reduced Iron (DRI) ironmaking methods were highlighted in IEEFA’s a report on decarbonizing the Steel Industry, which was published in August of last year, as a “critical aspect of steelmaking’s lower-emissions future.”
IEEFA highlighted that investment in DRI is anticipated to increase significantly going forward because the process can use green hydrogen as a reducing agent rather than metallurgical coal, but the group also cautioned that the procedure required high grade ore with an iron content of at least 67%.
For good measure, they continued, “DR-grade iron ore now accounts for only around 4% of the supply of iron ore worldwide.
What a waste of the bad news. IEEFA also took note of a number of important players in the steel sector who are creating innovative procedures appropriate for ore of lower grade.
$85,000,000,000 FOR GREEN STEEL At the Boulder, Colorado, headquarters of Electra, a green steel pilot plant is already under development. The company intends to complete the pilot plant next year and prepare ready for the following phase, which is a commercial-scale demonstration facility, with the additional $85 million in its bank account. The demonstration plant will begin producing green steel if everything goes as planned somewhere in the second part of this decade.
Several people contributed to the $85 million investment, including:
Breakthrough Energy Ventures — Following the 2015 Paris Climate Agreement, Breakthrough, backed by Bill Gates, debuted in 2016. It appeared to be centered on nuclear energy at first, but it has now diversified to include sustainable hydrogen and concentrated solar power.
Amazon Climate Pledge Fund : This fund was established in 2020, just a few years ago, with a $2 billion starting platform. It has supported well-known businesses like ZeroAvia, a manufacturer of hydrogen-powered aircraft, as well as less well-known startups like Turntide, which has created a new, energy-efficient electric motor.
BHP Ventures , Temasek, S2G Ventures, Capricorn Investment Group, Lowercarbon Capital, Valor Equity Partners, and Baruch Future Ventures are a few additional companies that make up the list.
If BHP sounds a bell, it’s not by chance. There is just not enough high-quality iron ore appropriate for effective DRI/EAF production to satisfy the world steel demand, according to BHP, which IEEFA quoted in its iron ore analysis. It appears that BHP is not waiting for the ground to fill with grass before moving.
YOUR FREEDOMS ARE UNDER ATTACK BY WOKE CAPITALISM It’s not surprising that Republican office holders, candidates, and allies have been touting the specter of “woke capitalism” as the newest thing to get their people to the polls as Electra is a strong example of the rising wave of investor interest in clean innovation.
Their main grievance centers on the ESG (environmental, social, and governance) movement, which encourages businesses to adopt, at least on paper, socially responsible business practices. The details matter, but the gist is that businesses that incorporate ethical concepts into their decision-making would perform better and draw in more investors.
The “awakened capitalism” myth has gotten ingrained in Republican rhetoric, despite the fact that ESG supporters have been presenting a strong argument for the bottom-line advantages of ESG investing, which puts the climate issue and human rights at the forefront.
It’s not simply talk without action. A new law called SB13, which targets financial institutions that “discriminate” against fossil energy, was passed by Texas lawmakers last year. Theoretically, SB13 forbade a large number of financial institutions from working with the state’s pension funds. In actual use, it focused attention exclusively on the high profile ESG investor BlackRock .
Last July, a number of Republican state attorneys general joined the attack on BlackRock. BlackRock was criticized by the organization in a letter dated August 4 for CEO, chair, and co-founder Larry Fink’s declarations in favor of climate action, despite the company’s continued involvement in the fossil fuel sector.
Arizona AG Mark Brnovich organized the letter and got 18 other state AGs to sign it, including Texas AG Ken Paxton. “Some states work with BlackRock for retirement plans, pension funds, and investments, but the company seems to be more interested in environmental, social, and governance (ESG) factors,” complained Brnovich.
The letter seems less inclined to make the case for fiscal recklessness and more inclined to draw Republican voters’ attention to a strong, high-flying global financier in light of the torrent of clean tech investment flowing into both Texas and Arizona. Please leave a comment in the comment section if you have any thoughts about that.
As Election Day in 2022 approaches, it’s likely that you’ll hear more about the negative effects of ESG investing, but when there is money to be earned, investors aren’t likely to be deterred.
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Green steel schematic Electra 1 in picture.
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