Can Clean Iron Reshape How Data Centres Are Built?

Electra, a startup based in Colorado, believes it has a viable alternative to the high-emission processes traditionally used in steelmaking.

With support from industry giants like Meta, Nucor and Toyota Tsusho America, the company sets out to prove that clean iron can be scaled to meet demand from sectors such as automotive and data centre construction.

A lower-carbon path for data centre steel

As digital infrastructure continues to grow globally, data centres consume ever larger volumes of steel, a material responsible for around 9% of global greenhouse gas emissions, primarily from coal-fuelled blast furnaces.

Electra proposes a cleaner route. Instead of using heat and coal, the company’s process, known as electrowinning, uses electricity from renewable sources to extract iron from ore.

This electrochemical method operates at a temperature roughly equal to that of a cup of coffee, avoiding the high heat and fossil fuels that drive emissions in conventional steelmaking.

The company plans to open a 130,000-square-foot demonstration plant in Jefferson County, Colorado, by mid-2026.

The facility will have the capacity to produce up to 500 metric tonnes of iron each year. Funding includes US$50m from Breakthrough Energy Catalyst, US$186m in private investment and an US$8m tax credit through the Colorado Energy Office.

“We started Electra to fundamentally reinvent the way the world makes iron and tackle one of the biggest sources of industrial emissions, but we’ve always known we could not do it alone,” says Sandeep Nijhawan, Co-Founder and CEO of Electra.

The site will play a key role in showing that the technology works beyond the lab. While 500 tonnes is small in comparison to the 1.4bn tonnes of iron produced globally in 2023, Electra believes this step is crucial to demonstrating that clean iron can be commercially viable.

Strategic partners test the model

Electra's partners bring both industrial reach and financial backing. Nucor, the largest steel producer in the United States, has already invested in Electra and commits to using its iron in electric arc furnaces, which already produce lower-carbon steel compared with traditional methods.

“The advanced purchase commitments with Electra are a clear demonstration of Nucor’s belief in their clean iron technology and our dedication to accelerating the adoption of sustainable steelmaking,” says Al Behr, Executive Vice President of Raw Materials at Nucor.

Toyota Tsusho America, a trading company connected to the Toyota Group, will distribute the clean iron to steelmakers serving the automotive industry. Germany’s Interfer Edelstahl Group plans to use it in its speciality steel manufacturing.

Meta, meanwhile, approaches the partnership differently. Rather than buying the iron directly, the technology firm signs an agreement to acquire environmental attribute certificates from Electra. These certificates allow Meta to account for the emissions reductions from clean iron production in its sustainability reporting.

“Meta is excited to partner with Electra to drive the development of low-carbon iron and steel – essential materials for building data centres – manufactured right here in the US,” writes Devon Lake, Head of Net Zero Strategy at Meta.

The agreement also includes an offtake deal, which enables Meta to support the commercial scaling of the clean iron solution.

“Meta is working towards demonstrating a pathway for these innovative materials to scale,” says John DeAngelis, Head of Clean Technology Innovation at Meta.

Reinventing the process without hydrogen

While much of the steel industry focuses on green hydrogen to reduce emissions, Electra’s method avoids hydrogen entirely.

Its process dissolves lower-grade iron ore into a water-based solution and then uses renewable electricity to deposit pure iron onto sheets.

This ability to use lower-quality ores that are typically uneconomical adds flexibility to the supply chain. It also enables the process to align with renewable energy availability, making it suitable for companies like Meta that operate on intermittent clean power.

Electra sources 100% of its electricity from renewable energy for its Boulder pilot facilities and plans to do the same for the new Jefferson County plant.

Founded in 2020 by Sandeep Nijhawan and Quoc Pham, Electra already runs two pilot sites and is now looking for a location for its first commercial-scale manufacturing plant, which it aims to bring online by 2029.

Challenges remain. Developers in the green steel sector face fluctuating funding, policy shifts and variable energy costs. In the US, updates to hydrogen subsidy programmes have delayed progress for some companies trying to scale lower-carbon steel solutions.

Sandeep remains confident. He believes the solution is no longer a technical hurdle but a question of scaling.

“I believe the solutions are in hand, and it’s a matter of scaling to drive those economics as fast as we can,” he says.

For the data centre industry, where sustainability goals increasingly guide decisions, Electra’s partnerships with Meta and others show how material sourcing is evolving.

Clean manufacturing and low-carbon materials are becoming as vital to data infrastructure as compute and cooling, shaping a new model for responsible digital growth.