Startup Electra is building a Colorado demonstration facility that will produce 500 tons of low-carbon iron annually, backed by a $50 million grant from Breakthrough Energy and corporate contracts with Meta, Nucor, Toyota Tsusho and Interfer Edelstahl Group.

The 130,000-square-foot facility in Jefferson County is scheduled to open by mid-2026. It will also benefit from an $8 million state tax credit, the maximum amount available under the Colorado Industrial Tax Credit Offering, which has allocated up to $168 million through 2032 for projects that reduce manufacturing energy loads.

Nucor, the largest U.S. steel producer, which uses largely recycled scrap, will buy some of Electra’s iron. Electra also has contracts with two big steel distributors, Toyota Tsusho and Interfer Edelstahl Group, as well as other companies that Boulder-based Electra declined to name. Social media company Meta will buy the environmental attribute certificates related to Electra’s production, which it can use to claim emissions reductions related to data center construction.  

The corporate contracts were crucial for the $50 million grant commitment by Breakthrough Energy Catalyst, which funds first-of-a-kind manufacturing projects to help early-stage companies build stronger commercial cases.

“We like to fund projects that derisk technology and move it up the curve,” said Mario Fernandez, head of Breakthrough Energy Catalyst.

Tough economics

Electra uses a low-temperature process to refine iron ore — one that relies on chemistry and renewable electricity rather than a blast furnace fired with coke, a carbon-heavy form of coal. The steel industry, where much of this iron is used, contributes almost 8 percent of global emissions. 

Startups such as Electra and established players such as ArcelorMittal are working on low-carbon or near-zero steel, but progress has been slow because of the furious pace of construction in countries such as China and India and an onerous tariff landscape.

Electra has raised $214 million, not counting the recent grant, from investors including Breakthrough Energy’s venture arm and the Amazon Climate Pledge Fund, which has invested in low-carbon cement and steel to help decarbonize data center construction. (The company will be featured in an Oct. 29 session about “Scaling Low-Carbon Steel” at Trellis Impact 25 in San Jose, California.)

Several buyer coalitions have formed to send early buying signals: both General Motors and Ford Motor, for example, h