MIT spinout Boston Metal raises $120M from Microsoft and ArcelorMittal to decarbonize the $1.6 trillion steel industry

Steel is the backbone of today’s industrialized world. An average of 1.9 billion tonnes of steel are produced every year to build infrastructure including bridges and rails, skyscrapers, and infrastructure. The steel industry also brings in a revenue of about $1.6 trillion each year, according to the World Steel Association.

However, the steel industry is one of the biggest polluters accounting for a staggering  7% and 9% (two billion tons) of global carbon dioxide emissions each year. That’s not all. Steel production also accounts for a significant amount of contaminated wastewater and other hazardous solid wastes. The dirty coal-dependent process has not changed that much over the centuries. Until now.

Enter Boston Metal, an MIT spinout startup on a mission to decarbonize steelmaking and alloys with efficient, lower-cost production with zero emissions. Founded in 2012 by MIT professors Donald Sadoway and Antoine Allanore, and Dr. Jim Yurko, the core of Boston Metal’s technology was invented at MIT in Donald Sadoway’s lab with support from NASA and the American Iron and Steel Institute.

Unlike the conventional steelmaking process, Boston Metal has invented a coal-free, emissions-free, modular method of industrial steel production using electricity called molten oxide electrolysis (MOE). The MOE combines transformative materials engineering and novel systems engineering with elements from industrial aluminum production, traditional blast furnaces, and arc furnaces to produce steel more efficiently, at lower costs than traditional methods, and with zero greenhouse gas emissions.

Boston Metal recently raised a $120 million Series C round to position the company to accelerate industrial-scale deployments of its molten oxide electrolysis (MOE) technology towards emissions-free steel. The round was led by multinational steel giant ArcelorMittal, with funding from Microsoft’s Climate Innovation Fund as well.

“Boston Metal is ushering in a new era of metallurgy,” said Tadeu Carneiro, Chairman and CEO of Boston Metal. “Steel production has relied on the same basic formula for millennia, and revolutionizing such an industry requires a rare combination of team, technology, and partners. With this new round of funding, Boston Metal has brought together all of these elements and is positioned to deliver a future where steel production is efficient, modular, and clean.”

Boston Metal’s MOE technology uses electricity to transform metals from a raw oxide form into high-purity molten metal products, facilitating CO₂ emissions-free steel production from a wide array of iron ores in a potentially more efficient, less costly and more sustainable approach.

Building on the momentum of its Series A in 2018, this new funding round will allow Boston Metal to validate its patented inert anode technology at an industrial scale, further expand its world-class team, and begin to deploy its MOE technology with customers, starting with high-value ferroalloy production as it advances toward steel applications.

“There is no economy, there is no infrastructure without steel,” Boston Metal CEO Tadeu Carneiro told CNBC in a video call on Wednesday. So when it comes to decarbonizing industry to fight climate change, “it’s a big piece of the puzzle. I don’t think this is obvious to everybody,” Carneiro said.

“Steel is the backbone of the industrialized world, with 1.9 billion tonnes produced each year to build transportation systems, skyscrapers, and infrastructure,” said Bennett Cohen, Partner at Piva Capital. “Unfortunately, the production of steel is responsible for more than eight percent of global carbon dioxide emissions, and the time is now to identify a more sustainable and cost-effective solution. Boston Metal’s team of remarkable entrepreneurs, scientists, and engineers will completely transform the steel industry by delivering a truly world-changing technology for producing emissions-free steel. We look forward to partnering with Tadeu and his team to bring this technology to market and make green steel a reality.”

“Our investment in Boston Metal complements the initiatives and partnerships we have underway to support decarbonization options across our value chain and help drive long-term growth and profitability for BHP and its customers,” said Mark Frayman, Head of BHP Ventures.

“Innovation is at the heart of Boston Metal, but we also benefit greatly from MOE’s unique ability to leverage proven principles from both the steel and aluminum industries,” added Carneiro. “We are building a technology and a company that can scale to meet the immense challenge of decarbonizing steelmaking, and that new era of metallurgy is coming soon. We intend to deploy pilot plants globally within a few years’ time.”

Boston Meta Team