Moving hot metal to a basic oxygen furnace to make steel.
Seong Joon Cho/Worldsteel—Getty Images

The basic process for making steel hasn’t changed a whole lot in the past few hundred years. Into the top of a big, lava lamp-shaped blast furnace goes iron ore and coking coal, and out comes waste slag, pig iron (later refined into steel), and a whole lot of CO2. For every ton of steel those furnaces end up making, close to two tons of CO2 gets emitted into the atmosphere. All told, the sector is responsible for a massive 7-9% of global carbon emissions.

And it’s not just that massive carbon footprint that keeps environmentalists up at night. Green energy and electric vehicles are at least making headway in displacing fossil fuels, but there isn’t a no-brainer green alternative able to decarbonize steel production on a large scale. All the while, yet more heavily polluting new blast furnaces are being commissioned every year.

The most important part of this question is public policy; very little is likely to happen without governments stepping in and telling steel producers that they need to stop emitting. In terms of technology the companies can turn to, there are a few options on the table, though none of them have yet been carried out on a large scale. Carbon capture systems can be retrofitted onto existing steel plants—though the cost is high, and in many cases involves building extensive pipelines to transport carbon dioxide to suitable places for it to be stored underground. Companies could also abandon their traditional blast furnaces and start using an alternate steelmaking process that uses green hydrogen to convert ore into usable iron. That technique is already being trialed by companies in Europe, though the process is mostly limited to the highest grade iron ores, which only account for a small segment of the global supply.

Then there’s really new processes like what U.S.-based Boston Metal is trying to scale up. The company is working to develop a new way to make zero-emission steel using renewable electrical power and some interesting chemistry. The process, known as molten oxide electrolysis, involves passing gargantuan amounts of electricity through iron ore, melting it into metallic soup. The electrical current also splits the iron ore into elemental iron and oxygen, and the iron sinks to the bottom of the furnace, leaving all the impurities—silica, calcium, magnesium—on top. 

The company has been in operation for about 10 years—that’s how long it takes to bring something like this to market. And it just passed a major milestone, raising $262 million in venture capital funding last week. That big check, says the company’s CEO Tadeu Carneiro, could be the last bit of venture capital it needs before it is able to start licensing the technology for mass production of steel in the next few years.

Carneiro spoke with TIME about what that money means for a new player in an old industry, how mine waste in Brazil is helping to fund the company (the company’s process also works for extracting valuable metals like niobium and tantalum from low-grade ore), and the world’s prospects of decarbonizing the steel industry. 

This interview has been edited for length and clarity. 

TIME: Steelmaking is an incredibly old industry, and it really hasn’t changed much in the past century. Why is the technology of molten oxide electrolysis only being developed now?

Carneiro: It's two things. One is we didn't have the environmental awareness that we have today. So you know, the problem of eliminating CO2 emissions is something that became clearer more recently. The other thing is the availability of electricity from renewable sources. Molten oxide electrolysis is something that has been talked about since Michael Faraday's day [in the 1800s]. It's not something new. But to think that you would be able to produce two billion tons of steel per year using electricity 15 years ago, people would say that you had completely lost your mind. The decision to generate [huge amounts of renewable] electricity the way it is being generated today, and will be in the future, was not there.

I can’t even imagine how much electricity it must take to melt iron ore in the way you’re describing. I imagine the economics of your company depend on access to a lot of cheap power. How are you going to get it?

So here's the thing. If you don't believe that electricity will be plentiful, reliable, available, green, and cheap, forget about it. But then you have to forget about lots of other things. We, as a society, decided that we will have green electricity available in the future. So today there are some geographic areas where you can deploy the system today because you have abundant green and cheap electricity. Quebec is one place. Scandinavia is another place. So we have to believe that the electricity will be available. You [already] have a bunch of investments in renewable electricity generation, and also in electrical storage to stabilize the use of that electricity. So you have to believe that this will happen. We have to have that happen in order to get global warming under control. So that's one point. The other point is if you want to get to green steel, then the blast furnaces have to go. If the steel-making companies are serious about being carbon neutral by 2050, they will have to phase out blast furnaces by the mid ‘30s. There is no other way. 

Have you gotten more interest from steelmakers lately? (Boston Metal’s business model is to license their technology to steelmakers).

It’s totally changed. Six years ago, it was too early for them. A couple of years [ago], it totally changed. The whole steel industry is really engaged and trying to solve the problem. All the big ones have already made pledges to be carbon neutral by 2050. They all understand that you can't solve the problem overnight, there will be a transition. And in this transition, you will try several different things to see what is going to be the most efficient. 

You’ve gotten a lot of funding recently. What are you planning to do with it?

The use of these funds is mainly broken into two main fronts. One is funding and scaling up what is already a commercial application of the technology in Brazil to get value from mineral wastes, and that should consume around $100 million from the funding. The reason why that is very important is because we will start generating revenues to help fund the balance of the program, which is scaling up the technology for green steel. 

Do you have any plans for a larger green steel plant?

The next milestone is a semi-industrial cell. It's not called “industrial” just because it doesn't produce enough to make sense for what the steel industry uses. It will run here in Woburn, Mass., from the second part of next year onward. We will have our first industrial demonstration unit sometime in 2025. And we want to become commercial with the technology in 2026. I would say the first million-ton or 2 million tons-size plants would be running in something like 2028. But now the most important thing is getting this semi-industrial cell running in Woburn, Mass., next year. Once we do that, you are in business, because the pressure to solve [this] is so big that it's only a question of the time to build a big plant.

Correction, Sept. 15

The original version of this story misstated Boston Metal's near term goal. The company will be licensing the technology for mass production of steel, not mass producing steel itself.

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