Three essential materials — steel, cement and chemicals — fortify and infuse our modern world. Though we may not think about them much, they are everywhere: in the walls that surround us, the roads we travel on and most of the everyday products we use. To meet our insatiable demand, factories and refineries worldwide churn out billions of tons of these building blocks every year.

Steel, cement and chemicals also represent the world’s top three emitting industries, which together are responsible for more than one-quarter of global carbon dioxide emissions. That percentage is expected to climb in coming decades as global demand increases — and with emissions from other sectors, including power generation and transportation, trending downward as they make strides toward replacing fossil fuels with renewable energy.

Unlike power plants and vehicles, however, industrial facilities have few straightforward solutions for slashing planet-warming pollution. There’s no electric-car equivalent for a chemical refinery or rooftop-solar version of steel mills.

Turning raw iron ore into high-strength steel, making the cement that binds together concrete, and ​“cracking” molecules into millions of different kinds of chemicals are all complex multistep processes that involve burning copious amounts of fossil fuels to generate intense heat. That in turn drives chemical reactions that also release carbon dioxide — what are known as ​“process emissions.” Add to this the fact that kilns, mills and crackers are typically large, capital-intensive facilities designed to operate for decades.

For these reasons, climate and energy experts have traditionally described heavy industries as ​“hard-to-abate” or ​“hard-to-decarbonize.” Four other sectors — heavy-duty road transportation, aviation, cargo shipping and aluminum — also fall under that category, but they each represent relatively smaller slices of total CO₂ emissions.

Lately, we at Canary Media have noticed a shift in the way that policy leaders and technology developers characterize these gritty, dirty, vital industries. They point out that labeling these sectors as ​“hard” may be giving companies, investors and governments too much of an excuse to delay decarbonization at a time when global temperatures are reaching unprecedented highs.

To be sure, transforming these industries will be exceedingly difficult. Decarbonizing iron and steel alone is expected to require $1.4 trillion of investment by 2050. But pathways do exist — some of them available today, some further out on the horizon — for curbing emissions, boosting efficiency and slashing energy use.

“There’s no reason not to move,” said Angela Barranco, executive director for North America at Climate Group. The international nonprofit is spearheading initiatives to create global markets for ​“net-zero” concrete and steel.

“Five years ago, it felt like we didn’t know how to tackle these parts of the carbon budget,” she said. ​“Now I feel like in every single piece there’s innovation, there’s implementation.”

The real challenge now is that all of those pieces need to evolve simultaneously and work together harmoniously, a complicated orchestra of interrelated solutions. 

The roadmap for decarbonizing steel, chemicals and, to a lesser extent, cement production relies on ​“green” hydrogen — produced using renewable electricity and water — to lower emissions from industrial processes. First, however, the United States and the rest of the world must install potentially terawatts’ worth of renewable energy capacity, deploy large fleets of hydrogen electrolyzers, and develop networks for storing and moving around the carbon-free gas. 

Shifting away from fossil fuels and toward electricity-driven heating systems will similarly require vast amounts of new renewable capacity, as well as upgraded grid infrastructure to balance the gaps between intermittent energy supplies and around-the-clock industrial demand. Some plant operators may determine that the best way to curb emissions from their existing facilities is to capture CO₂ from flue streams. But they’ll have to figure out how and where to store the CO₂ or transport it to industrial customers.

Replacing carbon-rich limestone in cement production and ditching petrochemicals for making plastics and fertilizers means creating new chemistries and building supply chains around alternative materials. The same goes for the innovative startups that are working to develop breakthrough technologies, including electrochemical methods that could potentially obviate the need to use massive amounts of green hydrogen and electricity.

And that’s just the supply side. Creating demand for greener products, especially if they come at a higher cost, entails navigating a whole different set of policy, regulatory and financial hurdles.

In recent weeks, as I’ve been reporting on these thorny issues, I’ve found myself glancing at the red spine of Anne Lamott’s classic writer’s guide Bird by Bird. In it, she recalls her brother feeling ​“immobilized by the hugeness of the task ahead” — in his case, writing a school report on birds due the next morning. ​“Bird by bird, buddy,” her father counseled him. ​“Just take it bird by bird.”

In a recent conversation, a chemical industry executive expressed a similar sentiment: The energy transition happens through a series of progressively cleaner solutions, not with a single silver bullet. ​“You take a slice of the problem and clean it up,” he told me. ​“And then another technology comes along and takes another 15 percent of emissions, and helps clean that other slice up.”

In Canary Media’s special week of coverage, we’ll illustrate the jaw-dropping enormity that is the world’s consumption of steel, cement and chemicals — and the CO₂ emissions that come with it. We’ll highlight the ​“slices” of solutions that have the potential to transform how the world’s essential building blocks are made. We’ll introduce the startups and manufacturers that are experimenting in labs, scaling demonstration plants and adopting new techniques in their ordinary operations. No doubt our reporting will continue beyond this week. Enormous change is getting underway, and it’s a story the world is only just starting to tell.

Cement, steel and chemicals are some of the most extensively produced materials in the world. They’re also among the largest global sources of carbon emissions — manufacturing them releases more CO₂ into the atmosphere each year than all of the emissions generated by the United States.

These materials are so emissions-intensive not just because of how they’re made, but also because of how much of them the world uses. Here’s how the annual production of cement, steel and chemicals stacks up against one of the most notoriously massive things in the United States, the Grand Canyon: 

(Source: International Energy Agency, RMI)

Concrete — the main end use of cement — is the most abundant manufactured material on the planet. It’s strong, durable and easily molded into different shapes, which is why various forms of it have been used for millennia as a key component of humanity’s built environment. Cement makes up just 10 to 15 percent of concrete by volume, but it is responsible for about 90 percent of concrete’s carbon emissions. In 2022 alone, the world produced more than 4 billion metric tons of cement, a 27 percent increase from 2010. Put that all together, and it would form a cube that measures more than 4,500 feet on each side. 

Steel, an iron alloy, can be found in nearly everything you look at, from kitchen appliances to cars to buildings, bridges and other everyday infrastructure. It’s also instrumental to clean energy technology and can be found in equipment such as wind turbines and solar panel racking. Last year, 1.9 billion metric tons of steel were produced around the world. 

Chemicals span a more diffuse array of end-use applications, but they are just as ubiquitous as steel and cement. The fertilizer that enables global food production, the fabrics used to make clothes and the plastic that goes into countless consumer products all rely on fossil-fuel-derived chemicals. Production of several of the so-called primary chemicals — ammonia, methanol and ​“high-value chemicals” such as ethylene and propylene — amounted to nearly 700 million metric tons last year. Although that’s much less than the amount of cement and steel produced, it still far outpaces most other materials. For example, the production of chemicals surpassed aluminum production by a factor of seven last year in weight.

How much carbon dioxide do cement, steel and chemicals emit?

The staggering production volumes of cement, steel and chemicals are at the core of the calamitous climate problem posed by heavy industry. Over one-quarter of global emissions result from industrial processes — more than from all forms of transportation combined — and that figure is driven mainly by these three materials.

Holcim Group, the largest cement manufacturer outside of China, has a dilemma.

On the one hand, its line of business couldn’t be more solid — cement is, after all, one of the building blocks of the modern world. But producing the material emits enormous amounts of planet-warming carbon dioxide, surpassing the emissions of every country in the world except China and the U.S. These days, the Swiss company, like its handful of global cement manufacturing peers, is feeling increasing pressure to do something about it. 

Holcim has managed to chip away at its emissions in recent years: Its 2022 annual report cited a 21 percent reduction in carbon emissions per unit of net sales from direct production and electricity consumption compared to the year before. The company has made progress largely because of a shift to lower-carbon cement and concrete products that reduce its use of clinker, the precursor material for cement, and by far the most emissions-intensive part of the industry. Crucially, costs have actually dropped along with emissions, the company says. 

Its most recent step came just last week with a $100 million investment in its biggest U.S. cement plant that will increase production capacity by 600,000 metric tons per year while cutting carbon dioxide emissions by 400,000 tons per year. 

“What we’re doing today is based on economics,” Michael LeMonds, Holcim’s U.S. chief sustainability officer, told Canary Media.

But not every solution to cement’s climate problem will present companies with such a clear-cut economic calculus. And while the U.S. Department of Energy estimates that more than a third of the industry’s emissions can be jettisoned using established technologies and processes like clinker substitution, the remainder of the solutions have yet to come into full focus. 

Most uncertain of all is the pathway to eliminating what are called ​“process emissions,” which account for the majority of cement’s climate problem. 

Process emissions are an unavoidable part of cement-making’s status quo. The core input of ordinary Portland cement — the product that makes up the vast majority of cement made today — is limestone, a mineral that’s about half calcium and half carbon and oxygen by chemical composition. When that limestone is converted to calcium oxide, the immediate precursor to clinker, the CO₂ trapped inside the mineral is released into the atmosphere. 

Eliminating these emissions means either finding novel, emissions-free ways to create ordinary Portland cement or a safe structural equivalent, or figuring out how to economically use carbon capture, utilization and sequestration (CCUS) technology to keep the CO₂ generated from the manufacturing process from entering the atmosphere. Though plenty of startups, companies and researchers are hard at work on both methods, neither has, at this point, proven to be workable at the necessary scale. For Holcim, CCUS is ​“the No. 1 midterm objective” for the company’s carbon-cutting ambitions, according to LeMonds. 

Holcim’s current situation — publicly touting progress on near-term carbon-cutting tactics like clinker substitution while working toward an uncertain solution for slashing process emissions — provides a snapshot of where many of the world’s biggest cement and concrete companies are today on their path toward decarbonization. The lower-carbon solutions that make economic sense right now, and which are minimally disruptive, are gaining traction, but the progress they offer is incremental; they’re not enough to get to zero emissions.

For Holcim and the industry at large, dealing with process emissions — and eliminating carbon emissions completely — will require nothing short of a full transformation. 

A blueprint for action 

Change at the scale required for the cement industry won’t come cheap, or fast. 

In the U.S., which produces just a fraction of the world’s cement, the industry will need to invest up to a cumulative $20 billion by 2030, and a total of somewhere between $60 billion and $120 billion by midcentury, according to DOE estimates. That’s a lot for an industry that made just under $15 billion in sales last year, and the necessary outlays are made more daunting by the fact that cement companies compete on razor-thin margins. 

But even if the money wasn’t a problem, there would still be the other imperative to deal with: product quality. If cement-makers can’t prove beyond a shadow of a doubt that their newly introduced products are as reliable as what they’re replacing, their customers will reject them, according to Ian Hayton, the senior associate leading materials and chemical research at Cleantech Group. 

All of these factors make the cement industry ​“very slow” to change, Hayton said. ​“There’s lots and lots of infrastructure already deployed. It’s not just about finding the best way. […] You have to start to think about what we already have in place.” 

But as with all major climate problems, moving slowly is a luxury that the world simply does not have. 

“It’s really important for people to be moving fast,” Vanessa Chan, chief commercialization officer and director of DOE’s Office of Technology Transitions, told Canary Media. ​“Oftentimes, people think we can’t do this because the technology isn’t there. I think people should know that 30 to 40 percent of emissions can be abated from technologies that are ready today.” 

What’s more, those near-term technologies will help the cement industry’s bottom line, she said. While they’ll require from $3 billion to $8 billion in capital investment to put in place, they also offer an estimated $1 billion per year in savings by 2030.

This chart from DOE’s recent Liftoff Report on cement decarbonization highlights both the short-term solutions available and the costly and long-term challenge of zeroing out emissions.

One of the first batches of modern cement was cooked up in a kitchen. In 1824, the British bricklayer Joseph Aspdin began experimenting with clay and limestone, mixing the ingredients with water and heating them in a furnace. After grinding the fusion into a fine powder and adding more water, he found he’d created a particularly strong material. 

He called it ​“Portland cement,” after a famous type of stone from England’s Isle of Portland.

Aspdin’s concoction and later iterations have since become an essential ingredient for making concrete — one of the world’s most widely produced materials. Every year, some 4.2 billion metric tons of Portland cement are made, serving to bind together sand, gravel, water and other components that form our concrete infrastructure.

Yet cement has a critical flaw: It’s extremely carbon-intensive to make, contributing around 8 percent of human-caused carbon dioxide emissions every year. About 40 percent of cement’s emissions come from fossil-fueled kilns that can get hotter than molten lava. The other 60 percent comes from the chemical process of calcination. When limestone is heated, it breaks down into its constituent parts of calcium oxide and CO₂, sending planet-warming gases into the atmosphere.

Startups and manufacturers are striving to develop new methods and formulas for making carbon-free cement. Many of these efforts are still early-stage and face major financial and technical hurdles to scaling up. Still, investors have recently poured hundreds of millions of dollars into these companies — reflecting the rising demand from construction firms and government agencies for lower-carbon concrete.

Here are six of the leading startups that are working to transform this foundational building block of modern society. (As a bonus, watch Canary Media’s video on companies capturing carbon dioxide and injecting it into concrete blocks in New York City.)

1. Curbing the Portland cement in concrete

One way to reduce concrete’s massive carbon footprint is to reduce its reliance on Portland cement. Terra CO2 Technology is doing just that by developing a ​“supplementary cementing material” (SCM) made from the world’s most abundant and commonly used minerals. The company plans to start construction next year in Texas on its first full-scale facility.

Major cement and concrete companies already use millions of tons of SCMs every year, both to reduce their concrete’s carbon footprint and to cost-effectively strengthen the material. But most SCMs today are made from fly ash from coal-fired power plants or slag from steel blast furnaces. As coal plants close and steel furnaces shutter, those materials are expected to become less readily available and more expensive to get. 

OSCEOLA, Arkansas — On a hot, dry morning in mid-October, dozens of visitors gathered in a former cotton field turned dusty compound, before a cluster of blue rectangular buildings. In the far distance, an earthen levee snaked along the banks of the drought-stricken Mississippi River.

A fleet of sleek black vans soon ushered the group — a contingent of local and state officials and a few journalists — to the entrance of a cavernous facility. We’d come to mark the opening of a $450 million production line, which just started making a type of paper-thin steel for use in electric-vehicle motors, power generators and transformers — equipment that’s in high demand as the nation transitions to clean energy. A nearby lunch tent drove home the day’s theme, with tables holding lightning-bolt centerpieces and delicately iced sugar cookies spelling ​“emPOWERing the Green Revolution.”

The new plant is part of a multibillion-dollar expansion that U.S. Steel is undertaking at Big River Steel, a sprawling complex on the outskirts of the tiny city of Osceola. The company says the massive undertaking will allow it to supply much more lower-carbon material to automakers, construction firms and other companies looking to clean up their own supply chains.

For nearly a decade, Big River Steel has been producing millions of tons of high-strength metal and using electricity to do it — instead of heating purified coal, like the nation’s oldest and most polluting steel furnaces do. Pittsburgh-based U.S. Steel acquired the site in 2021, in part, it said to help create a more ​“secure, sustainable future” for the 122-year-old industrial giant.

At the steel mill, heaps of recycled metal — from chopped-up cars, washing machines, structural beams and more — are placed inside two enormous ​“electric arc furnaces,” along with small amounts of iron pellets. The furnaces blast a bolt of electricity between internal electrodes, melting the contents into a glowing orange liquid at nearly 3,000 degrees Fahrenheit. Other machines roll the material into sheets and curl it into coils, which are strapped to beds of trains and trucks and hauled across the country.

Producing steel this way can curb carbon dioxide emissions by up to 75 percent, compared to traditional coal-based methods, according to the company and industry reports.

“The future is toward electrification, and we can make some money with this green steel,” David Burritt, U.S. Steel’s president and CEO, told me as giant metal rolling pins droned loudly behind us. 

For the past 150 years, steelmaking has been a big, hot business centered around enormous blast furnaces that burn metallurgical coal to melt iron. Those furnaces are the chief driver of the industry’s enormous carbon footprint; it’s responsible for 7 to 9 percent of human-caused global greenhouse gas emissions. 

But Sandeep Nijhawan and Quoc Pham, co-founders of Electra, see a far different future for the steel industry. Instead of massive blast furnaces, Electra uses electrochemical devices similar to batteries that can produce pure iron at temperatures well below the boiling point. 

These devices can be laid out in modular fashion at many different sites instead of consolidated at a handful of huge ones, giving the industry a new option for making iron for steelmaking without spending billions of dollars on a massive new factory in one go. 

“We are a clean iron company,” said Nijhawan, CEO of the Boulder, Colorado–based startup. ​“We don’t make steel — we make iron to make steel.” But ​“90 percent of emissions from steel are from the refinement process for iron,” he said, ​“and that’s where 90 percent of the energy is consumed.” 

The traditional way to make steel is to use fossil fuels to heat furnaces to 1,600 degrees Celsius to smelt iron; 70 percent of the world’s steel is still produced this way. Most companies working to produce green steel plan to use hydrogen to process iron. 

Electra, instead, dissolves iron ores into an aqueous solution, then zaps that solution with electricity to separate and collect pure iron molecules while removing impurities. No fossil fuels or hydrogen required.

This process is known as electrowinning, and it’s already being used to produce significant amounts of other critical metals such as copper, nickel and zinc. But Electra says it has developed a system that uses electrowinning to pull pure iron from iron ores, including those that are too impure to cost-effectively process via other commercial-scale means. 

The company’s pilot tests have shown it can produce plates of pure iron. These are ready to be fed into electric arc furnaces — a well-developed alternative to blast furnaces that today are used mostly to turn scrap steel into new steel. Electric arc furnaces already produce steel with far lower carbon emissions than blast furnaces, and emissions would be reduced further by using electricity from zero-carbon sources. Feed iron made via Electra’s carbon-free process into low-carbon electric arc furnaces, and you’ll have a dramatically cleaner way to make steel.

A year ago, Electra raised $85 million to carry out its plans. Its backers include not just climatetech investors like Bill Gates–founded Breakthrough Energy Ventures, Amazon, Temasek and S2G Ventures, but also Nucor, the biggest steelmaker in the U.S., which exclusively uses electric arc furnaces. 

“When paired with Nucor’s [electric arc furnace] technology, Electra’s green iron presents a unique opportunity to dramatically decarbonize our own operations and those of the steelmaking industry at large,” Nucor says.

How Electra stacks up against other pathways to green iron and green steel

There’s good reason to believe that electrowinning offers a viable pathway for green steel, said Dan Steingart, a professor of chemical metallurgy at Columbia University who served as Electra’s chief scientist in 2021–2022 and is now a technical adviser to the company. In particular, it offers key advantages compared to the other methods now being pursued, he said. 

One alternative method, which Steingart described as the ​“heir apparent” to today’s steel industry, is the direct reduction of iron via hydrogen. DRI using fossil gas already produces about 10 to 15 percent of the iron used in steelmaking in the world today, he said. Converting from using fossil gas to using hydrogen is a ​“nontrivial” effort, he said, but ​“it’s the most straightforward drop-in” replacement. DRI is at the core of the biggest green-steel projects in the world, such as the H2 Green Steel and Hybrit plants in Sweden. 

But the hydrogen DRI process poses challenges for the companies investing billions of dollars to bring it to commercial scale. The most obvious is the need for low- or zero-carbon hydrogen, which is currently in short supply and expensive. Using hydrogen in lieu of fossil gas to produce direct reduced iron can more than double the cost, Steingart said. It can also be difficult for a hydrogen-fueled DRI process to effectively use lower-grade iron ores as inputs, he said, which could add to the challenge of supplying the steel industry with the iron it needs. 

The second alternative method for producing green steel is molten oxide electrolysis, or MOE, which involves using electric currents to heat iron ore to around 1,600 degrees Celsius to drive chemical reactions. MOE eliminates the need for hydrogen by electrifying the process of converting iron ore into iron suitable for steelmaking. MIT spinout Boston Metal is pursuing MOE, and it landed $262 million in September to scale up its first projects targeting the niche markets for higher-value metals such as niobium. 

“It’s a very clever process,” Steingart said of MOE — but he cautioned that it also has drawbacks. To be zero-carbon, MOE needs to use 100 percent zero-carbon electricity. But because the electrolytic reaction in MOE requires molten metal to be kept at temperatures at least as high as those reached in blast furnaces, intermittent renewables are not a great fit. ​“If the process freezes, it takes a very long time to restart it,” he said. 

Electrowinning, by contrast, can be done at far lower temperatures — about 60 degrees Celsius for Electra, approximately the temperature of a cup of hot coffee. ​“We needed to set up a process that works at low temperature…because we need to integrate renewables,” Nijhawan said. 

Electra’s process can also be stopped and started, rather than needing to maintain a constant supply of energy to prevent molten metal from hardening, the CEO said. That means that it can run when wind and solar power are available and stop when they aren’t, rather than relying on a source of zero-carbon energy that can be provided continuously.

Cracking the code for electrowinning iron 

Electra is not the only company trying to achieve a scalable and cost-effective approach to electrowinning iron. A research effort in Europe called Siderwin has explored an electrowinning process that uses an alkaline electrolyte, as opposed to Electra’s acid-based process. Fortescue, the Australian iron mining giant that also has a multibillion-dollar clean-energy and green hydrogen business, announced in March that it has successfully produced pure iron using an electrolysis process developed in its labs — and the way the company describes it sounds a lot like electrowinning.

“Electrowinning — the process of reducing metallic ores to the metals — has been around for hundreds of years,” said Travis Lowder, a project manager at the U.S. Department of Energy’s National Renewable Energy Laboratory. 

“We’ve industrialized electrolytic processes, especially for aluminum — but we haven’t done so for iron-making, although there’s been research around this for quite a while,” he said. But now that ​“even steelmakers recognize the need to decarbonize, you’re getting more conversation around, ​‘What can the process do for us?’”

However, iron ores are far harder to process via electrolysis than copper, nickel, zinc and other metals commonly refined via electrowinning. 

There are two primary reasons for this, said Pham, the Electra co-founder who now serves as chief technology officer. The first is that iron oxide — the primary form of iron ore — is ​“very, very slow to dissolve in acid. Even with a concentrated acid, you can spend weeks — or even years — to get a solution.” The second, and related, problem is that once dissolved, the iron ions tend to ​“crash out” of a solution before all the impurities the process is meant to remove are gone.

These barriers almost ended Electra’s work before it began, Pham said. ​“I thought it would be the shortest-lived startup I ever started.” 

The answer that Electra came up with is ​“kind of our secret sauce,” he said, although some details are available via the company’s patents. ​“We found a very simple, elegant way to alter” the matter state of the iron ore by decreasing the amount of time it takes to dissolve it and honing the process to ​“deal with the most difficult impurities.” 

That innovation has also made it possible for Electra to work with far lower-grade iron ores than can be used for steelmaking today, Nijhawan said. ​“We wanted to solve for a very major constraint in the steel industry — that we’ve been running out of high grades of ore that can directly go into steelmaking processes.” Nucor highlighted Electra’s ability to use ​“low-cost, abundant ores, which are commonly treated as waste today” as a factor in its decision to invest in the company. 

The shortage of high-grade iron ores also presents a major hurdle to scaling up hydrogen DRI processes, Nijhawan noted. That’s because, unlike blast furnaces, DRI processes can’t add ​“fluxes” to the mix— materials that interact with iron ore to draw out impurities. Instead, with DRI, the impurities in the iron ore are ​“actually getting concentrated with the iron.” 

A 2022 report from the Institute for Energy Economics and Financial Analysis states that a lack of high-quality ore could hinder ​“a faster switch to DRI technology this decade as well as delaying longer-term targets to significantly ramp up DRI operations to reach net-zero emissions targets by 2050.” 

Electra’s process, by contrast, can use both lower-grade iron ores suitable for blast furnaces and ores with impurities that currently bar them from being used for steelmaking altogether, Nijhawan said. Those include mine tailings and ores mined but left unused. ​“The only reason we call it waste is because they have more impurities than [steelmakers] want for commercial grade,” he noted.

Cutting costs and charging toward commercialization

“It was very clear to us from the beginning that we have to invent a process that’s not only sustainable and green, but can be economic without any subsidies,” Nijhawan said. 

Electra also aims to eliminate the need for the green-steel industry to charge a ​“green premium,” or a higher price than its legacy competitors charge for standard products. 

Nijhawan sees opportunities for Electra to cut not just the cost of making green iron but also the cost of building the facilities to produce it. Today, iron ore and energy are responsible for about three-quarters of steelmaking costs. But the colossal costs of building new large-scale facilities — DRI plants, green hydrogen systems and supply chains, and mining operations that can provide the higher-quality ore required for the hydrogen DRI process — are also a daunting barrier. 

Electra’s technology skirts the need for enormous capital investments — at least in its early stages. It’s ​“an electrochemical system,” Nijhawan said. ​“The way we build capacity and scale is the same way you build capacity of an EV pack.” 

This modular approach could allow the steel industry to avoid sinking gigantic amounts of money into huge, one-off facilities, he said. That’s a vital consideration in a highly cost-competitive global industry. 

Steingart, whose research has focused on battery chemistries, also highlighted the similarity between EV batteries and Electra’s process. ​“The power plant in a classic Corvette is an enormous V8 that you feed gasoline into,” he said. ​“In a modern Tesla, the actual power plant is 10,000 lipstick-container-sized cells that are working in concert to give you more efficient power than what that Corvette could ever give you.” 

“We’re asking to do the same thing with iron,” he said. ​“Today, you have a big blast furnace. How do you beat that with a billion smaller efforts?” 

There are certainly technical challenges to scaling up an alternative production method, Steingart acknowledged. ​“But there’s not a fusion-like scientific question,” he said. 

By the end of this year, Electra expects to have built its first module capable of producing what Nijhawan called ​“industrial-scale plates of iron.” That process works almost identically to how copper and zinc electrowinning systems work today, he said. The pure metal ions adhere to a plate. Those plates are removed by cranes, and metal — about 100 kilograms per plate — is stripped and collected for shipment to electric arc furnaces. 

Electra’s total funding to date is enough to move ahead on this plan, according to Nijhawan. In fact, the $85 million capital raise last year was ​“more capital than what we needed,” he said. ​“I had a hunch the capital markets were going to tighten. We took that buffer to be prepared for that eventuality.” 

“This is a capital-intensive business, of course,” he said. ​“As soon as we can reduce the next level of risk, we go get more capital.” 

Nijhawan noted that current government policies meant to drive the decarbonization of the steel industry don’t offer the same support for novel methods like Electra’s as they do for the hydrogen DRI processes now seeing the largest private-sector investment. Namely, both the U.S. and the European Union have created significant incentives for producing low- to zero-carbon hydrogen and capturing carbon from industrial processes. 

“But if I do not use hydrogen, or produce carbon emissions, I do not get a tax credit,” he said. Specifically, Electra is not eligible for the tax credits for clean hydrogen and carbon capture created by last year’s Inflation Reduction Act.

Nijhawan noted that other federal programs, such as the Department of Energy’s industrial-decarbonization demonstration grant program and the low-interest loans on offer from DOE’s Loan Programs Office, could help fill that gap. 

Still, the federal tax credits for hydrogen production and carbon capture will put Electra in the position of ​“competing against steel that doesn’t have any carbon penalty to it,” he said, using ​“an incumbent process that’s 150 years old, with fully depreciated plants.” 

In that light, partnerships like Electra’s work with Nucor may provide the clearest view of how its approach to green iron production will scale up to compete with blast furnaces. 

As Leon Topalian, president and CEO of Nucor, said in a December statement on its investment in Electra, ​“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.”

You’d be hard-pressed to find an object within arm’s reach that didn’t require a carbon-intensive chemical process or oil-refining step on its path to appearing in your home, car or office. 

Petrochemicals are the building blocks of our packaged, coated, molded, lubricated, stretchable, sealed and shipped civilization. They’re used in the production of paints, plastics, clothing, tents, medicines, fertilizer, pharmaceuticals, phones, and the fossil fuels that transport these items around the world. Their production also presents a significant problem for the planet, sending both toxic pollution into local communities and huge amounts of carbon emissions into the atmosphere.

When it comes to carbon emissions, industries such as cement, steel and hydrogen have a reputation for being hard to abate. But cleaning up those materials might be a walk in the park compared to decarbonizing the pervasive, complex and massive petrochemicals and refining industry.

This problem is especially acute for the U.S., which despite its ambitions to be a global leader on decarbonization is also one of the world’s largest producers of chemicals. 

“The chemicals industry enables our modern economy and modern life, but it is one of the leading sources of industrial greenhouse gas emissions in the United States. The good news is there’s opportunity for us to do things to reduce those emissions. There are lots of…options available for companies and consumers,” said Brian Payer, senior principal in the Climate-Aligned Industries practice at clean-energy think tank RMI. (Canary Media is an independent affiliate of RMI.)

With the industry just starting on its decarbonization path, the U.S. Department of Energy issued a blueprint for how to tackle this problem economically and at scale in its Pathways to Commercial Liftoff report. It states that in order to remain on track with national decarbonization goals, the chemicals and refining sector must reduce emissions by 35% through 2030 and more than 90% by 2050. The report identifies the leading emitters in the U.S. chemicals industry and singles out the top strategies to maximize near-term emissions reduction.

Where do chemicals and refining emissions come from?

Approximately 80 percent of U.S. chemicals-related emissions are generated by these subsectors and processes. Here’s a breakdown of how much each process contributes to the chemicals sector’s emissions:

• Oil refining, 45%: These emissions stem from processes that remove impurities from crude oil or upgrade the crude into end products such as transportation fuels, industrial feedstocks and lubricants. The U.S. was both the world’s top oil producer and top oil refiner last year.
• Natural gas processing, 11%: This process entails removing impurities such as sulfur and CO₂ from raw fossil gas and extracting compounds such as ethane for use in ethylene production. The U.S. is also now the world’s largest exporter of liquefied natural gas. 
• Steam methane reforming, 9%: This is used to produce hydrogen. It can be combined with nitrogen in the Haber-Bosch process to make ammonia, which is primarily used in fertilizer.
• Steam cracking, 8%: The ​“cracking” process used to make petrochemicals such as ethylene makes use of giant furnaces brought to red-hot temperatures with fossil fuels in order to break or ​“crack” molecular bonds. It’s this cracking step that’s responsible for most of the CO₂ emissions connected to petrochemical production. 
• Chlor-alkali process, 5%: This produces chlorine and caustic soda by subjecting saltwater brine to electricity and mid-temperature heat. Chlorine is used extensively across industries, notably in plastics production, PVC pipe and disinfectants.
• Other chemicals, 22%: This grab-bag category includes the production of chemicals such as urea, formaldehyde, polyethylene, polypropylene, styrene and ethylene dichloride.

The levers for cutting carbon from chemicals production

Producing chemicals and refining fuels is a complex endeavor that involves hundreds of processes — but two of the primary carbon offenders in this industry are cracking furnaces and steam methane reformers, tried-and-true industrial processes that burn an enormous amount of fossil fuels. Achieving near-term emissions reductions in these two processes is one major near-term goal set forth in the DOE’s report.

For the first task — decarbonizing cracking furnaces — electrification holds some promise. The fossil-fueled energy that drives chemical production today can be replaced with carbon-free sources such as solar, wind or nuclear power.

Development of electric crackers or ​“e-crackers” has already begun. As Canary Media’s Maria Gallucci reports, Shell and Dow, two major chemical manufacturers, are working on an experimental electrically heated steam-cracker furnace. Meanwhile, another chemical consortium comprising Linde, BASF and Sabic is completing construction on a demonstration plant in Germany. In the U.S., LyondellBasell recently announced tentative plans to join these early e-cracker efforts.

Nevertheless, manufacturers are still in the research and development stage and years away from full-scale commercial electric crackers that can produce the extremely high temperatures needed to power these processes.

But the technology to electrify low- and medium-heat applications, using equipment such as heat pumps, e-boilers and electrified compressors, is available today, according to the DOE report. Electrification of these processes with renewables could account for approximately 25 percent emissions reduction for the industry by 2050, but it would require long-duration energy storage or thermal energy storage to help deliver firm power for the 24/7 operational demands of chemical and refining facilities. 

The sheer volume of clean firm power needed to electrify these processes is bound to become a limiting factor. Up to 180 terawatt-hours of clean firm power would be required by 2030 to support the electrification of the chemicals and refining industries, as per the report — for context, the U.S. used 4,050 terawatt-hours of total electricity in 2022.

The second major carbon offender in this sector, steam methane reformation, subjects methane to high-temperature, high-pressure steam and produces hydrogen, along with a concentrated stream of carbon dioxide. The presumed solution is using ​“green” hydrogen made with renewable or nuclear energy as a drop-in replacement feedstock instead of hydrogen produced with fossil gas. But for now, clean hydrogen is found mostly in PowerPoint presentations. Almost all of the hydrogen used today for ammonia production and oil refining is made with fossil gas using the steam methane reformation (SMR) process.

Billions in tax incentives from the Inflation Reduction Act could help shift steam methane reformers to clean hydrogen, which can also be directly combusted in existing equipment or converted to electricity by a fuel cell. (Whether these incentives will actually lead to lower emissions is a question mark at the moment, as the government has yet to finalize guidance on what constitutes genuinely ​“clean” hydrogen. More on that here.)

Refineries switching hydrogen production from SMR to electrolyzers could abate millions of tons of CO₂ by 2030, but just like electrifying the cracking process, that would require significant new clean electricity infrastructure. 

Working out how to cost-effectively electrify crackers with renewable energy and scaling up truly clean hydrogen production are the two most impactful ways to decarbonize chemicals and refining. But the DOE points out a handful of other approaches as well. 

Implementing energy-efficiency and operational upgrades at facilities can simply lower their demand for dirty energy. Carbon capture and storage technology installed on concentrated high-purity streams of CO₂ at fossil gas processors can mitigate hard-to-abate emissions by capturing CO₂ and storing it long-term; the historically dubious economics of CCS are vastly improved by incentives in the Inflation Reduction Act. Using lower-carbon feedstocks such as industrial/​consumer waste products, including plastics, biochemicals and biofuels, to replace fossil fuels for heat sources and materials could reduce emissions in the chemicals and refining industry. 

This industry could lower its emissions by about 20 percent through the mid-2030s ​“without further government support” by applying a mix of these solutions, according to the DOE report.

Innovation will shine through

It’s been almost 200 years since the first oil well was successfully drilled, setting the stage for refined petroleum fuel and byproducts to fill our lives with both technological wonders and ecological tumult. Confronting the carbon content of this deeply embedded and integral industry is going to require a concentrated effort by private, public and consumer forces — and the stakes couldn’t be higher. DOE points out in its report that ​“reducing emissions in the chemicals and refining sectors is critical to bolstering American competitiveness, retaining the ability to sell in global markets, and achieving U.S. emission reduction targets in the decades to come.”

It’s still early days for decarbonization in the chemicals and refinery world. Most firms are currently focused on efficiency measures and circular economies, with a few instances of market pioneers investing in decarbonization pilots such as electric crackers.

Many large chemical companies have made good-faith decarbonization commitments, but absent a regulatory mandate, these firms are more responsive to market forces like incentives, price premiums and consumer preferences than carbon accounting.

And though the DOE report focuses mostly on the carbon impact of the chemicals production and refining processes, these are not even the most carbon-intensive part of the industry’s value chain. That distinction goes to end-market use — largely from the burning of fossil fuels. On the other end of the chain, upstream extraction, transport and storage are notorious leakers of methane, a gas more climatically threatening than CO₂.

In other words, the more we decrease reliance on fossil fuels, the easier it will be to cut the carbon footprint of chemicals and refining, too. 

RMI’s Payer foresees economic solutions developing rapidly over the years and decades to come, boosting the market incentives for companies to decarbonize.

“What I think gets missed here is people just constantly miss the pace of technological change and innovation. We completely whiffed on solar and wind. It’s expensive, it’s more expensive, more expensive, more expensive, and then all of a sudden it’s a market winner.” He thinks it’s likely that technology breakthroughs will follow a similarly surprising trajectory in the chemicals and refining space.

“These are the types of manufacturing processes that can benefit from learning curves and economies of scale. Innovations in the heavy-process industries happen at a different pace and different scale than software. It may look slow relative to the product cycle of your iPhone — but innovations will come through.”

Chemelot is a vast industrial park of petrochemical plants and research labs in the Netherlands. Inside one of its facilities, a group of companies is working to solve a thorny problem vexing the global chemicals industry: how to make one of the world’s most important compounds — ethylene — without pumping copious amounts of carbon dioxide into the atmosphere.

Ethylene is a key building block for many of the chemicals that go into everyday items, including diapers and detergent, fabrics and foams, mattresses and milk jugs, plastic bags, PVC pipes and even airplane wings. It is the most-used primary petrochemical in the world, accounting for about one-third of the industry’s global consumption.

Today, making ethylene involves ​“cracking” apart the molecules in ethane or other hydrocarbons, which is done by burning huge amounts of fossil gas to heat giant furnaces to scorching temperatures. This step alone is responsible for 90 percent of the CO₂ emissions associated with ethylene plants. 

At Chemelot, near the city of Geleen, the engineering firm Coolbrook is piloting a new kind of technology — one that uses only electricity to crack ethane. The European company recently began testing its electric-driven ethylene reactor, as part of a broader 12-million-euro ($12.7 million) initiative for decarbonizing industrial emissions. In September, Coolbrook successfully completed its first phase of large-scale testing at the site, using an electric heater that makes high-temperature process heat for chemical, cement and steel manufacturing.

“We think this [electrified] technology can be one of the big game-changers in industrial decarbonization, especially in the sectors that have been considered ​‘hard-to-abate,’” Joonas Rauramo, CEO of Coolbrook, told Canary Media. 

He said the company plans to connect its first ​“commercial demonstration” ethylene reactors to existing chemical plants in 2025, and to deliver its first industrial-scale heaters starting late next year.

You can’t build something out of nothing, and this immutable fact poses a challenge for the essential heavy industries whose decarbonization plans depend on cleanly produced hydrogen.

The steel industry is betting on clean hydrogen to replace coal in the making of its key input, iron. Fertilizer suppliers want to replace fossil gas with hydrogen as the feedstock for synthesizing ammonia. Cement manufacturers hope to rely on hydrogen as a clean heat source. Chemical refineries already use fossil-derived hydrogen and need to clean it up to make their operations compatible with a livable planet.

As detailed in Canary Media’s The Tough Stuff series, the current best bets to decarbonize the building blocks of modern society depend on a steady supply of clean hydrogen readily accessible to industrial centers around the country. This simply does not exist today in the U.S.; in other countries, it’s only happening on a small scale. 

“The projects in service now [globally] — we’re talking 10 megawatts, 20 megawatts,” said Claire Behar, chief commercial officer at an integrated green-hydrogen venture called Hy Stor. ​“We need to be breaking ground today with these gigawatt-scale projects in order to even come close to meeting our climate goals.” 

The success of the industrial decarbonization project, then, requires not just reorienting massive incumbent industries around novel low-carbon processes, but simultaneously inventing a whole new clean-hydrogen supply chain capable of feeding these enormous beasts.

Hydrogen itself is not difficult to make. It’s already produced at scale using steam methane reforming, a highly carbon-emitting process. People have synthesized it without fossil fuels for over a century as a byproduct of the chlor-alkali process, used to make chlorine gas. Hydrogen can also be produced more directly through electrolysis, which involves running an electric current through water. 

For hydrogen to be green, though, the electricity tapped for either of those last two processes needs to be verifiably carbon-free. Gold-standard green hydrogen would plug off-grid renewables straight into electrolyzers. If a producer runs electrolyzers from the grid and buys credits for renewable power equal to consumption, that process can actually emit more carbon than dirty methane-based production; this counterintuitive fact animates the debate on whether federal tax credits should require ​“time-matching” renewable generation with hydrogen production. 

Other techniques can be clean without being ​“green.” Nuclear-powered electrolysis is not renewable but is carbon-free. Methane reforming that effectively catches its emissions forever technically could be carbon-free, though this remains to be proven both practically and financially.

Even if the industry were to embrace the highest standard of green hydrogen, there are plenty of hurdles to overcome. The vital hydrogen electrolyzer equipment itself is still maturing; it needs to improve in efficiency, production scale and cost, just like solar panels and batteries needed to a decade ago. And nobody has much experience hooking electrolyzers up into large-scale hydrogen production sites — the equivalent of turning a pile of solar panels into a functioning power plant.

To make green steel, cement and chemicals, then, the U.S. needs to figure out how to super-size carbon-free hydrogen production, posthaste. Several groups are already vying for position in this emerging, not-yet-extant market. Their plans will take U.S. green hydrogen production from zero to something in the coming year.

Legacy industrial gas providers — Air Liquide, Air Products, Linde, Messer — are scoping out green-hydrogen facilities to complement their existing carbon-based operations. Separately, cleantech innovators are applying lessons from the solar boom to green-hydrogen project development, in some cases bundling electrolyzers and clean electricity generation at the same site. Legacy oil and gas majors are talking about leveraging their immense engineering capabilities to produce hydrogen while capturing emissions from dirty methane-based processes.

Congress greased the wheels by passing the most enticing green-hydrogen production tax credits ever in the Inflation Reduction Act of 2022. If the unexpectedly public jockeying over the fine print on those tax credits is any indication, a lot of well-resourced corporations are itching to jump into the fray and collect those benefits. And earlier this month, President Biden announced the much-anticipated winners of $7 billion for seven regional hydrogen hubs, intended to jump-start the U.S. hydrogen economy by creating supply and demand in close proximity.

In other words, a hazy American green-hydrogen economy is starting to come into view. Here’s the uncertain path from the state of play today to a future with enough green hydrogen to clean up steel, cement and more.

Tending the green shoots of green hydrogen 

I spent weeks asking leading figures in the emerging green hydrogen industry where commercial-scale production is currently taking place in the U.S. The consensus was that it doesn’t exist — yet.

Some green-hydrogen production can be found nearby, though, at a hydro-powered facility in Bécancour, Quebec, owned by legacy industrial gas supplier Air Liquide. The plant debuted in 2021 as the largest green-hydrogen producer in the world: It contains all of 20 megawatts of proton exchange membrane electrolyzers supplied by Cummins. There are several different ways to produce clean hydrogen, but that type — PEM for short — has the most commercial momentum right now.

Hydrogen operatives quantify production capacity by how much electricity the electrolyzers consume. The 20-megawatt Bécancour plant takes in that much hydropower from Quebec’s utility and pumps out 8 metric tons of hydrogen a day, which the company liquefies and ships to customers in the Eastern U.S. and Canada. 

“It may be the largest [plant] operating today, but lots of bigger ones are coming,” said Dave Edwards, Air Liquide’s officially designated ​“advocate for hydrogen energy.”

A 20-megawatt solar plant, or a 20-megawatt grid battery, seemed large once. This facility will soon be outclassed by a wave of increasingly potent hydrogen factories, some of which are already under construction. But it offers a few insights about how hydrogen producers can grow their capacity.

According to Edwards, the key questions to ask when planning a hydrogen production site are, ​“What energy is available to produce the hydrogen, who are the offtakers, and what do they need?”

To ensure greenness, Air Liquide opted to locate the facility in Quebec’s famous hub of renewable hydropower. The gold standard for green hydrogen will always be producing the invisible gas straight from a dedicated carbon-free power source, one that ideally delivers 24/7, allowing maximum runtime for the facility. Hydropower can check all of these boxes, as can geothermal and nuclear. Producers banking on cheap wind and solar will need to figure out how to get the most out of that inexpensive but intermittent supply.

As for the offtakers, producing in Quebec allowed Air Liquide to market green hydrogen to customers on the East Coast. The company previously produced out west for the early hydrogen market in California, which threw generous subsidies at the fuel. But demand has finally emerged in the East, and it’s best to localize hydrogen distribution within 500 to 1,000 miles of customers, according to Edwards.

To be clear, nobody in North America is buying green hydrogen today for steel or cement manufacturing. Startups and incumbents in those industries still have to figure out how to make green steel at scale, secure buyers, and then prepare those techniques for mass investment. For now, the minimal demand for clean hydrogen comes from customers who can actually use it.

“We see transportation as one of the first early adopters of this new low-carbon molecule,” Edwards noted.

That means Toyota Mirai sedans, heavy-duty trucks, and in the case of green-hydrogen startup Plug Power, a fleet of fuel-cell-powered forklifts for use inside warehouses and distribution centers. Vehicles need hydrogen in liquid form to keep their fuel cells running. Limited though it is, this liquid-hydrogen market provides a foothold for green-hydrogen companies to build out their electrolyzer capacity.

Riding forklifts to a green hydrogen payday

Right now, a common perception is that green hydrogen can’t compete on cost against dirty hydrogen, which is produced by ​“reforming” methane. The Department of Energy wants to reduce the cost of hydrogen made with renewables from around $5 per kilogram today to $1 per kilogram by 2031 by improving electrolyzers and ramping up cheaper clean energy. The federal incentives of up to $3 per kilogram of clean hydrogen included in the IRA were designed to close the cost gap while green-hydrogen production matures. 

That cost reduction is vital to long-term, widespread adoption of carbon-free hydrogen. But the fact is even now green producers don’t have to compete with that scary-cheap $1 per kilogram fossil hydrogen. If they’re selling liquid hydrogen for vehicles, they just need to beat out diesel, or the specialty liquid-hydrogen market, where prices have been inflated for a long time.

The legacy liquid-hydrogen market is dominated by a handful of industrial gas companies. Production grew in the 1950s to supply NASA with rocket fuel; then intercontinental ballistic missiles and a smattering of niche industrial uses kept these facilities in business. Hardly anyone outside these incumbents even has access to equipment capable of liquefying hydrogen, which involves chilling the substance remarkably close to absolute zero, the point at which molecular motion grinds to a halt. 

Consequently, customers cannot simply buy liquid hydrogen on an open market; they must sign a deal directly with one of the few incumbents, which wield considerable leverage. These arrangements typically lock in customers for extended periods of time. Legacy producers in the U.S. were charging upward of $10 per kilogram for liquid hydrogen this year, according to an August earnings report from Plug Power.

“There is really no price, there is no market, there is no index,” said Mark Hutchinson, CEO of Australian green hydrogen company Fortescue Energy, in a recent virtual event with Plug Power. In other words, it’s up to hydrogen entrepreneurs to turn this specialty product into a readily available commodity.

Publicly traded company Plug Power ran right into this problem when it signed a landmark deal in 2017 to supply Amazon warehouses with hydrogen-powered forklifts, which promised more uptime and better performance than existing battery-powered models. Soon afterward, Plug Power executives determined that making their own liquid hydrogen would save money for the company and its customers.

Three years ago, Plug Power acquired an existing hydrogen plant in Charleston, Tennessee, which now yields 10 tons a day using the well-established chlor-alkali process. The hydrogen emerges through a pipe from a neighboring chemical plant as a byproduct of making chlorine gas, and Plug liquefies it. Plug also acquired a PEM electrolyzer company called Giner ELX, giving it the intellectual property to generate green hydrogen for itself. 

From there, Plug ​“dove into building full plants,” said Brenor Brophy, vice president of project development at Plug Power. First up is a 40-megawatt PEM electrolyzer plant in Georgia, expected online later this year, which will double the capacity of the current world leader, the Air Liquide plant in Quebec. Plug is constructing a chlor-alkali facility in Louisiana and PEM electrolysis facilities in New York and Texas that will bring a whole new level of size: 120 megawatts in Texas and 200 in New York. Company leadership told shareholders they will produce 500 tons a day of liquid green hydrogen by 2025, roughly double the current U.S. market for the liquefied product.

“Nobody is actually building plants except Plug,” Brophy said. ​“We now have a very good idea what it costs to build a green hydrogen plant.”

This isn’t just an American phenomenon: At its corporate symposium in October, Plug leaders announced they are going to supply Fortescue with 550 megawatts of electrolyzers for its Gibson Island development in Australia, and the companies plan to invest in each others’ hydrogen production sites in the U.S. and elsewhere.

Air Liquide, for its part, hasn’t announced any specific plans to construct U.S. green hydrogen plants. But Edwards, the company’s advocate for green hydrogen, described a flurry of planning and development underway, with many companies holding back on announcements while the Department of Energy is still deliberating on its much-anticipated hydrogen hub grants. Air Liquide is involved in six of the seven hubs that DOE picked on October 13 to receive a collective $7 billion.

Gaseous expansion

Groups like Air Liquide and Plug Power hope to scale green hydrogen by selling it in liquid form to propel clean vehicles. The benefit of that approach is that customers are buying clean hydrogen for vehicles today — success does not depend on a nonexistent market springing to life. 

But the big, still theoretical, industrial users — makers of low-carbon steel, cement, chemicals — need gaseous hydrogen to decarbonize their processes. A different set of entrepreneurs is betting that if they get to work building green-hydrogen gas production now, industrial customers will materialize to buy it.

Developing hydrogen production can look a lot like developing competitive renewables projects, said Jacob Susman, a longtime wind developer who launched hydrogen company Ambient Fuels in 2021. You need to ​“pick a spot on the map where it makes sense,” then invest money to gain rights to the land and file for permits and grid connection. Once the key ingredients are secure, you can attract customers, and that’s when you spend the big dollars to build out the site. 

Ambient hasn’t completed any hydrogen production projects yet, but in May it raised $250 million from climatetech financier Generate Capital to support its buildout. Susman’s earliest projects could start producing in 2026, and the sector should reach ​“escape velocity” in 2028, he added.

Hy Stor, a company developing an integrated green-hydrogen production and storage facility, is working to deliver green-hydrogen gas in 2026 to industrial customers that will set up shop in the company’s 70,000-acre complex in coastal Mississippi. Now it just needs to move as fast as possible to build sufficient hydrogen production in time.

“We’re really going from zero to 180 miles per hour,” said Hy Stor CCO Claire Behar. ​“We are going to be on the gigawatt scale. We will be the largest.”

Behar declined to specify who exactly the industrial customers are, or whose electrolyzers the firm will install to produce the hydrogen. But she did say the company is breaking ground early next year on the renewables installations that will power electrolysis, and the salt domes that will store the gaseous hydrogen thousands of feet below ground. 

Speed dictates Hy Stor’s design choices. Simply waiting for permission to interconnect a major renewable power plant to the grid could blow the 2026 deadline, so Hy Stor is building a mix of off-grid wind, solar and geothermal generation at the site that will pump power directly into the facility’s electrolyzers. Given the tight turnaround, Hy Stor will focus on mature alkaline electrolyzers as well as PEM electrolyzers for carbon-free hydrogen. The company plans to stow the gas in 10 purpose-built underground salt domes and sell it to customers that build facilities in the new industrial park to make things like green steel and fertilizer.

Hy Stor is far from alone in moving quickly to raise America’s green-hydrogen production capacity. Would-be green steelmakers don’t need to bank on a new supply chain magically appearing. Rather, they need the new crop of hydrogen developers to secure land and electrolyzers, line up clean power — and get building as soon as possible.

This article has been updated to correct an earlier description of Hy Stor’s hydrogen production plans.

BROOKLYN, New York — Jeff Hansen climbs up onto a narrow metal platform and stands beside three towering mixers, which are stirring up concrete with the texture of wet sand. In the bustling warehouse below, tall machines press the concrete into molds like giant Play-Doh sets, churning out thousands of building blocks per day at the Glenwood Mason Supply facility in East Flatbush, Brooklyn.

To make the concrete in these jumbo mixers, Glenwood Mason dumps in Portland cement, sand, crushed aggregates and one final key ingredient: carbon dioxide.

Using a novel technique, the company takes planet-warming CO₂ and renders it into dry ice, as Hansen explains over the deafening noise of hissing, clanking machinery. When that dry ice is mixed with the cement, a chemical reaction occurs, transforming CO₂ into calcium carbonate. In its mineral form, the carbon won’t escape back into the atmosphere.

“It’s in the blocks forever,” Hansen, the firm’s vice president of architectural sales and marketing, says on a toasty October afternoon.

Injecting CO₂ into concrete is one of many approaches that companies are taking to address the construction industry’s outsize climate impact. Cement and concrete production are responsible for roughly 8 percent of total human-caused CO₂ emissions every year, more than the aviation and cargo-shipping sectors combined.

The majority of concrete-related emissions come from making Portland cement — the glue that binds other ingredients together. A growing number of startups and manufacturers worldwide are developing low-carbon formulas and new techniques to prevent those emissions from being created in the first place.

The Brooklyn project takes a different tack. Instead of directly reducing emissions, it uses the blocks to lock away CO₂ pollution that otherwise would have escaped into the air. This helps to compensate for the carbon emissions released in the production process. All told, this method can curb the overall carbon footprint of concrete by roughly 5 percent, according to the company CarbonCure, which developed the CO₂-injection technology that Glenwood Mason uses.

American consumers are used to making informed purchasing choices. We like to compare our options before opening our wallets. We want to know what ingredients are in our shampoo and how many calories are in our ice cream. It took many years of work to establish the federal consumer protection laws and programs that make conscious consumption of household goods a part of everyday life. Businesses benefit from these laws and programs as well; they can more directly respond to the public’s diverse needs and discerning tastes, changing formulations and developing differentiated product lines to meet evolving demands. 

Today a similar transformation is underway, but this time the goods are common building materials, and the consumers are state and federal government agencies.

Many building materials are made through carbon-intensive processes that are contributing to climate change. Cement, aluminum, and steel and iron together account for 15 percent of global greenhouse gas emissions. Getting better data on these materials will help buyers — in this case, government entities — set standards for purchasing products that have fewer associated carbon emissions, and that, in turn, will drive innovation to further reduce emissions. 

Federal and state green public-procurement programs — also known as Buy Clean programs — are designed around this objective. The idea is to leverage the vast purchasing power of public agencies to spur decarbonization of dirty heavy industry. The U.S. government, for example, is the largest consumer in the world, spending more than $650 billion on products and services each year. The U.S. General Services Administration by itself is one of the largest landlords in the U.S., owning or leasing 9,624 assets and maintaining more than 375 million square feet of workspace.

Harnessing this purchasing power will reduce carbon in the atmosphere, send strong signals to the private sector and support clean, domestic manufacturing jobs. North American suppliers have cleaner, less carbon-intensive manufacturing operations than many of their international counterparts, whose manufacturing facilities may be subject to less environmental regulation. Buy Clean offers these domestic suppliers a competitive advantage against imports that tend to undercut them on price. 

The burgeoning Buy Clean movement 

The Buy Clean movement originated in California. In 2017, the state passed the Buy Clean California Act, which sets maximum emissions limits for steel, glass and mineral wool insulation purchased for public works projects. The first few years of implementation focused on gathering data, before emissions standards went into effect in 2022. 

Since then, two additional states — Colorado and Oregon — have passed Buy Clean policies, while Minnesota and Washington state are set to launch pilot programs. Though these Buy Clean policies were enacted through legislation, other jurisdictions have established them via executive authority. New York Governor Kathy Hochul (D), for example, established low-carbon concrete purchasing criteria for the New York State Department of General Services and Department of Transportation, modeling the standards around the Buy Clean framework.

Notably, the Biden administration made Buy Clean a cornerstone of its executive order to achieve zero carbon emissions from the federal government by 2050. The Federal Buy Clean Initiative received a significant boost from the Inflation Reduction Act, which contains $4 billion in funding for the General Services Administration and the Federal Highway Administration to procure low-carbon steel, concrete, asphalt and flat glass. This staggering investment will create market competition and push manufacturers to reduce emissions at their facilities. 

In 2023, the Biden administration also launched the Federal-State Buy Clean Partnership with 12 states to exchange best practices and develop cohesive policies. 

In other words, Buy Clean is growing up. It’s no longer a nascent policy idea limited to wonky circles but has matured into a robust demonstration of collective public-sector action that can move markets. This is a once-in-a-generation business opportunity for building material suppliers. They can choose to take up the charge and institutionalize decarbonization as part of their business strategy, or they can risk losing market share to competitors. 

The nitty-gritty of Buy Clean 

A simple way to think about the status of Buy Clean policy today is through the lens of an age-old business adage: ​“You can’t manage what you don’t measure.”

To develop rigorous emissions standards that will drive investment to cleaner suppliers, we first need improved and widespread data reporting by industry. That is why the near-term priority of the Buy Clean movement is requiring manufacturers of building materials to accurately report on their environmental impact. 

The effort to improve data quality has put significant emphasis on the emissions data reports used to implement Buy Clean policies. These are called environmental product declarations, and serve as the ​“nutrition label” for a range of environmental impacts, including greenhouse gas emissions. For many years, industrial emitters have complained that generating these EPDs is a time-intensive and costly process that they can’t afford. However, with new IRA-funded grant programs that financially support manufacturers to disclose their emissions, manufacturers have more incentives than ever before to report environmental impacts. 

Alongside reporting requirements, agencies deploying Buy Clean policies have initially set emissions standards that are feasible for the average manufacturer to meet, giving them an opportunity to acclimate to expectations for increasingly lower-carbon production. 

Buy Clean’s next phase 

So Buy Clean is gaining momentum, providing manufacturers with a huge incentive to report their emissions and start their decarbonization journey. But what happens next? How does this lead to transformational change in the way materials are made?

Over the next few years, the U.S. Environmental Protection Agency, which received significant funding to develop low-carbon building product programs as part of the IRA, will establish national standards to define low-carbon building materials, starting with steel, concrete, asphalt and glass. Once these standards are established, manufacturers of building materials will have a better sense of where they stand amongst their competitors, and buyers will be able to make better choices.

But EPA’s efforts will require a nuanced understanding of each of the target industries to ensure that emissions standards are designed to achieve their desired outcome. For example, a major risk of poorly designed Buy Clean standards is that they shift demand away from domestic producers in the short term, compromising these facilities’ ability to invest in decarbonization while not meaningfully changing the emissions profile of the industry. 

This is particularly true in the steel industry. RMI, the Natural Resources Defense Council and the Center for American Progress undertook a lengthy analysis of the steel industry to provide recommendations for high-impact Buy Clean standards for steel that will fairly accelerate decarbonization across steelmaking facilities. 

While there is complexity and risk involved in developing effective standards for low-carbon building materials, this foundational work will unlock the true promise of Buy Clean policies. With more and better data, and nuanced understanding of the supply chains in play, governments can set long-term emissions-reduction pathways for their Buy Clean policies. These target trajectories will provide manufacturers with the confidence to invest in decarbonizing their facilities in anticipation of increasingly stringent public purchasing requirements.

Given these developments on the horizon, manufacturers who do not invest in decarbonization will face multiple risks and missed opportunities. Many producers are already leveraging IRA grant funding to demonstrate innovative industrial decarbonization technologies and seed the next generation of clean, low-carbon manufacturing facilities. 

Editor’s note: Canary Media is an independent affiliate of RMI.

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

Steelmaking is the most carbon-intensive heavy industry in the world; it alone accounts for as much as 9 percent of all human-caused CO₂ emissions each year. 

And while this is the definition of a global problem — every country uses steel — production is concentrated in a handful of countries, most notably China. 

Last year, China made more than half of the nearly 1.9 billion metric tons of steel produced worldwide. India is the second-largest producer of the material in the world, followed by Japan, the United States and Russia. Taken together, these five countries produce 73 percent of all steel. 

The majority of the world’s steel — about 70 percent — is produced using coal-fired blast furnaces. That makes steel and iron production the second-largest use of coal around the world, behind only electricity generation. 

One way to produce steel more cleanly is by recycling scrap steel in electric arc furnaces — a process that emits roughly three-quarters less carbon than blast furnaces. In the U.S., about 70 percent of steel is made this way, but in China just 10 percent is. Broader adoption of electric arc furnaces, especially in China, could help curb emissions from the sector. But given the long lifespan of steel products, there’s a limited supply of scrap steel, so this won’t be a complete solution to the industry’s climate problem. 

Canary Media has reported this week on potential solutions for decarbonizing the steel industry, like using clean hydrogen to process iron ore for steelmaking or embracing other innovative approaches like electrowinning. But these technologies will only solve the industry’s climate problem if they are adopted everywhere — and in particular by the steelmaking giant that is China.

To that end, Chinese steelmakers are facing pressure to clean up their operations. Steel is responsible for around 15 percent of China’s total carbon emissions, and the country has pledged that its emissions will peak before 2030. Several steelmakers in China have also already announced plans to invest in hydrogen-fueled blast furnaces and direct-reduction technologies, and according to the International Energy Agency’s latest World Energy Outlook, China is also on track to become a leader in clean hydrogen production, which could be crucial to cleaning up its steel production. 

But at the same time, China and India are building dozens of new coal-based blast furnaces — and both countries have plans to build many more. These plans, which are at this point much more concrete than far-off commitments to still-developing green-steel technologies, will hamper the global steel industry’s ability to get its emissions down to zero.

The industries that produce the building blocks of modern society — steel, cement and chemicals — are incredibly carbon-intensive. And since we’ll always be dependent on at least some amount of these materials, we need to figure out how to produce them without sending staggering quantities of planet-warming CO₂ into the atmosphere. 

That’s why Canary Media published an in-depth series examining this exact question: How can we cut carbon emissions from the production of steel, cement and chemicals? For the long, comprehensive answer, check out our series content. For the short version, keep reading — here are five key takeaways about the accelerating effort to decarbonize these foundational substances. 

1) Industry — driven largely by these three materials — could become the biggest source of carbon emissions in the U.S. by 2035 if nothing changes. 

Thanks in part to a little law you may have heard of called the Inflation Reduction Act, the U.S. is on pace to slash emissions from two of its most carbon-intensive sectors: transportation and power generation. 

But emissions from industry, which stem primarily from steel, cement and chemicals production, might not even budge over the next decade. That’s why Rhodium Group expects industrial emissions to be the single largest source of U.S. carbon emissions by 2035.

This may sound like a can we can kick down the road; after all, we’ve got our hands full decarbonizing the power grid and passenger vehicles. But we need action now: Many of the technologies required to eliminate emissions from steel, cement and chemicals production will require years to perfect, scale up and popularize. ​“Next decade” might as well be tomorrow when it comes to big industrial timescales.

For more:

• Check out our data-driven piece showing the scale of the climate problem posed by cement, steel and chemicals production.

2) Across all three of the most carbon-intensive industries — steel, cement and chemicals — there are near-term steps that can result in big emissions reductions. 

These industries, along with others like cargo shipping, are often called ​“hard-to-abate” or ​“hard-to-decarbonize.” We’re not here to debate whether cutting carbon from these industries is hard (no one said the energy transition would be easy), but as many experts have pointed out, this terminology can give the impression that these industries pose an intractable problem. Not so. 

There’s lots of carbon-cutting that can happen right now across heavy industry. For cement, the Department of Energy estimates that near-term solutions like replacing portions of cement with other lower-carbon ingredients can cut emissions by one-third. As for steel, switching from blast coal furnaces to melting scrap metal in electric arc furnaces — a practice already widely embraced in the U.S., but not elsewhere — can cut emissions by up to 75 percent. For chemicals production, technology like heat pumps and thermal energy storage could offer a path to near-term decarbonization. And across the board, energy-efficiency improvements are an underrated tool. 

The path to zero emissions definitely remains foggier for these materials than for, say, the grid. But how to start down the path is comparatively clear.

For more:

• Maria Gallucci explains that while decarbonizing these industries is certainly hard, it’s necessary — and doable.
• Gallucci also examines the trillion-dollar quest to produce carbon-free steel in an in-depth feature.
• Eric Wesoff reports on the Department of Energy’s roadmap for reducing the emissions of the chemicals production and refining processes.

3) Long-term prospects for industry decarbonization rest largely on emerging technologies. 

If the previous takeaway offered the good news on decarbonizing ​“the tough stuff,” here’s the less-good news: Completely eliminating emissions from cement, steel and chemicals will require us to crack the code on multiple as-yet-unproven technologies. 

To succeed, we’ll need to do some combination of the following: figure out how to generate extremely high temperatures without burning fossil fuels; make a staggering amount of green hydrogen, a fuel that no one can even agree on how to define; and invent new, viable forms of cement — or new production processes that yield conventional cement. And then there’s tech for carbon capture, utilization and sequestration, which, depending on who you ask, is either a silver bullet for the entire energy transition or a catastrophic red herring. 

But scores of companies, universities, research organizations and government groups are working on making these technologies feasible at the necessary scale — and many of these solutions show genuine promise. What’s needed now is even more investment and policy support so the industry can deploy the best possible solutions as fast as possible. 

For more:

• Julian Spector attempts to square heavy industry’s massive theoretical appetite for green hydrogen with the scarce actual supply of the fuel.
• Maria Gallucci explains evolving plans to clean up the superhot furnaces used in one of the most ubiquitous chemical production processes.
• Jeff St. John and Gallucci spotlight six of the most innovative companies working to tackle cement’s CO₂ problem.
• St. John profiles a company at the forefront of an under-the-radar approach to producing green steel called ​“electrowinning.”

4) Government action is needed not just to nudge producers of these materials, but to move buyers as well. 

Cement, steel and chemicals are commodities. Producers typically compete on price and price alone. That’s an inconvenient fact for efforts to cut carbon from the manufacturing processes of these materials, which are almost certain to increase prices as companies try to recoup the major upfront investments that will be necessary. 

Most bulk buyers of these materials are not going to pay more money for a product that is lower-carbon unless the government steps in and institutes either punitive measures like a carbon tax or incentives tied to the procurement of low-carbon materials. 

The government also has a role to play as a buyer: The U.S. government, for example, purchases enormous amounts of cement. Experts say it should act as an eager initial customer for more expensive low-carbon materials, helping the industry begin to grow such that it can scale up and drive prices down. 

For more:

• Jeff St. John breaks down the need to transform the cement industry, both from the supply side and the demand side.
• In a guest essay, Anish Tilak of RMI’s Carbon-Free Buildings program explains the powerful role governments can play as buyers of low-carbon cement, steel and aluminum.

5) Cleaning up these dirty, vital, globe-spanning industries is going to be messy.

While it’s absolutely necessary to do, cutting carbon from the production of cement, steel and chemicals will not solve every problem these industries present. Take petrochemicals — making them with lower-carbon methods won’t change the fact that they are derived from fossil fuels and that their production pollutes nearby communities.

In some cases, decarbonization efforts might even introduce new problems. That’s a concern for labor groups, who fear that transitioning to green steel might mean a shift away from a historically unionized workforce, too. And here’s something that keeps industry experts awake at night: What if green products cost too much and buyers simply choose to import cheaper, dirtier products from countries with laxer rules?

Like any large-scale transformation, decarbonizing cement, steel and chemicals will mean grappling with tradeoffs and unintended consequences. How policymakers, companies, investors and communities navigate those challenges could make or break the efficacy and equity of the transition. 

For more:

• In her feature story, Maria Gallucci spotlights the tradeoffs inherent to producing green steel.

This webinar brought together experts on the world’s three highest-emitting industries — steel, cement and chemicals — to explore why these sectors are so difficult to decarbonize and what types of policy solutions and technical innovations are needed to curb emissions from producing these essential materials.

Panelists:

• Vanessa Z. Chan, Chief Commercialization Officer, Director, Office of Technology Transitions, U.S. Department of Energy
• Chathurika Gamage, Principal, Climate-Aligned Industries, RMI
• Selene Law, Senior Associate, Lead Energy & Power, Cleantech Group
• Hilary Lewis, Steel Director, Industrious Labs 

This panel was moderated by Canary Media’s Maria Gallucci and was part of our special series ​“The Tough Stuff: Decarbonizing steel, cement and chemicals.”