Boston Metal CEO Tadeu Carneiro
Photo courtesy of Boston Metal
In a nondescript office park on the outskirts of Boston, a 10-year-old startup is trying to reshape the core processes of the $1.6 trillion steel industry to reduce carbon emissions and fight climate change.
boston metal Spun out of research developed at MIT in 2013, it has since raised a total of $250 million.The 120-employee company is researching a green method of steel production that is both The backbone of modern infrastructure construction and is a significant contributor to climate change, generating 7% to 9% of global carbon dioxide emissions, according to world steel association.
Boston Metal has yet to start generating revenue and is still iterating on the final technology it will use to produce clean steel at scale.
But recently, it signed a $20 million financing agreement with the World Bank’s private sector investment armInternational Finance Corporation.
This is the first time IFC has invested in a non-revenue generating start-up, illustrating the value of the World Bank in helping low-income countries manufacture carbon-free steel, IFC Director William Thornborn told CNBC.
“I’m in Africa,” Thorneborn said in a video call from Senegal in late May. “There are hundreds of millions of people without homes. At some point, they’re going to need steel. So the incremental steel production in the world won’t happen in the U.S. — the technology may have been invented at MIT, but the increased steel production won’t be in America”
Most crude steel, 59%, produced in developing countries in 2021, according to the International Finance Corporation. IFC said Boston Metal’s process is particularly attractive to developing countries such as Chile, Ethiopia, Malawi, Uruguay and Zambia that also have access to clean electricity.
CNBC visited Boston Metal’s Woburn, Mass. headquarters in late May to learn more about the startup, which has received investments from ArcelorMittal, the world’s second-largest steel producer, among others. nearly hundreds of millions of dollars were raised there, MicrosoftClimate Fund and Bill Gates’ Breakthrough Energy Ventures and the World Bank.
Boston Metal Company offices in Woburn, Massachusetts.
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this The traditional steelmaking process puts iron ore or iron oxide into coal-fired blast furnaces, which generate significant carbon dioxide emissions.Boston Steel executives explain that in conventional steel mills, two tons of carbon dioxide are produced for every ton of steel produced Adam Lauwodinck during a visit to the laboratory.
Instead, Boston Metal uses an electrochemical process called molten oxide electrolysis.
Diagram of the process Boston Metal uses to make green steel.
Image courtesy of Boston Metal
The technique passes electric current through iron oxide mixed with a host of other oxides, which are compounds containing at least one oxygen atom. If the electricity entering the process is clean, the steel coming out of the other side of the pot is also clean.
The process is similar to a battery, with a positively charged anode and a negatively charged cathode directing electrical current through the process.
Boston Metal’s electrolysis work involves converting the grid’s alternating current to direct current.
It is here that Boston Metal converts the electricity from AC to DC. (Some photos have been edited to protect Boston Metal’s intellectual property.)
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The anode in the Boston Metal process is an important development at MIT. It is mainly made of chromium and iron mixed with some other small amounts of other materials that will not be consumed or corroded during the electrolysis process.
“What’s special about it is that it can survive 1,600 degrees Celsius, 3,000 degrees Fahrenheit. When you do electrolysis, you’re using electrons to break down iron and oxygen. So the anode is being hit by oxygen all day at super high temperatures , it has to survive in that environment,” explained Rauwerdink during a tour of the lab. “There are very few elements that can do that. This alloy is one of a kind.”
A by-product of this process is oxygen.
The Boston Metal electrolysis process releases oxygen as a by-product. On the circled screen, you can see that oxygen bubbles are being released. (Writing on the whiteboard has been blurred to protect Boston Metal’s intellectual property.)
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While Boston Metal is still iterating on commercial-scale technology, the science behind the process holds promise.
“It’s no longer a binary of either you will fail or you will succeed,” Boston Metal CEO taducarneiro told CNBC in Woburn. “The question is how long is the life of the anode? Will it last three years or two years? That’s where we are right now, we’re nailing down all the parameters to build the biggest, biggest industrial battery. So that’s where we are.
The steel industry is watching.
“The first thing I did when I joined the company was to visit my friends, the CEOs of all the different steelmaking companies, especially in Asia, and tell them about this idea. That was six years ago,” says Carniero . “It’s interesting for most of them, it seems like it’s too early. Right now, they’re all desperate – because they have to find a solution. And they don’t have a solution.”
Other benefits of the process
Boston Metal’s process can use low-grade iron ore, which is one of the reasons IFC invested in the company.
Boston Metal can make steel from low-grade iron ore, such as that of the Australian miner BHP, which is an investor in the start-up.
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“Many emerging markets have a lot of iron ore, it’s just low quality, so they can’t use blast furnace technology to make steel. They can use Boston Metal technology,” Sonneborn told CNBC.
This means these developing markets can manufacture their own steel, creating self-sufficiency for the economies of these countries, Sonneborn said.
Also, the electrolyzers can get bigger up to a point, but then companies will have to put many pots side by side to produce green steel.
It’s a medium-sized electrolysis setup, somewhere between a lab-scale bench and a full-scale battery. This can run for weeks at a time and collect performance data on the anode. (Writing on the whiteboard has been obscured to protect Boston Metal’s intellectual property.)
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“If you go to a full-scale plant using this technology, you might see several 100s of electrolyzers,” Lauwodinck told CNBC.
This battery modularity is attractive to the World Bank.
“Boston Metal’s modular technology allows a small country like Burkina Faso to build its own steel mills, have its own steel production – rather than importing from India, and actually pay hard currency abroad at home,” Thornborn told CNBC.
Here, a full-scale anode is running the electrolysis process at Boston Metal’s Woburn plant.
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Another Faster Path to Income
Boston Metal is raising what it hopes is $300 million in funding. Rauwerdink told CNBC that it has completed half of that round so far, and that “most of the rest have been negotiated.”
Boston Metal’s main target is green steel, but the company will also use its core electrolysis technology to produce tin, niobium and tantalum metals from waste generated during the mining process. Roughly a third of the $300 million will be used to commercialize the project at its Brazilian subsidiary, where the largest device the company has ever built will be used.
Reporter Cat Clifford stands by Boston Metal’s multi-anode electrolyzer. (Some equipment has been overridden to protect Boston Metal intellectual property.)
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Niobium is mainly used in steelmaking, tin is used in metals and electronics, and tantalum is used in capacitors and other components in the electronics industry, among other uses.
“It’s easier, that’s why we can deploy earlier,” Canelo told CNBC in Woburn. “Anodes have different properties.”
The metal power generation business in Brazil will be the first to generate revenue for the company.
The other two-thirds of the $300 million financing will be used to complete the development of the steelmaking process and its components. Boston Metal plans to produce green steel on a commercial scale by 2026.
These types of batteries will run for years at a time as Boston Metal prepares to commercialize its green steel business. Boston Metal will make money through licensing the technology and making and selling the anodes needed for the green steel process.
Boston Metal hopes to begin licensing the technology in 2026, Carniero told CNBC.
IFC wants Boston Metal to succeed so it can help developing countries build their own steel manufacturing industries while also paying off for other projects. IFC does not pay dividends to investors from its investments – all proceeds go straight back into the coffers.
“When we exit, all of these proceeds will be used to address gender inequality in India or South Asia or different aspects of the climate challenge. So every profit we make is not distributed to our shareholders as a dividend, it is reinvested in our growth goals,” Sonneborn told CNBC.
