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Bill Gates-Funded Startup Develops Cheap Green Steel That Could Retire Coal in Steel Plants. Innovative Technology Promises Lower Costs and 50% Less Emissions.
The green steel — long pointed out as a vital solution to decarbonize one of the most polluting industries in the world — may have found its turning point. The startup Hertha Metals, funded by Bill Gates and other heavyweight investors from the tech sector, claims to have successfully produced cheap green steel at a pilot scale around Houston, Texas. This is a breakthrough that, if confirmed at an industrial scale, could signal the end of coal use in steel plants and change the economic logic of global steel production.
Hertha’s innovation not only reduced emissions by over 50% during tests but also kept costs competitive with traditional steel. This is crucial, as high costs have always been the biggest obstacle to mass adoption of green steel — even in the face of global pressure to lower carbon emissions. With technology that simplifies the entire process into a single step and promises profit within the first few years, Hertha offers the global steel industry a new path toward sustainability.
Hertha Metals Opens a New Era in Steelmaking with Cheap Green Steel
Hertha’s proposal is bold: to revolutionize steel manufacturing with an unprecedented, cleaner, and economically viable approach. The startup developed a patented technology that allows for the conversion of iron ore directly into steel, skipping traditional stages and eliminating the need for coal.
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While cities suffocate with smoke and fields burn worthless straw, India transforms sugarcane bagasse, non-recyclable plastic, and agricultural residue into bricks to build cheaper rural housing.
This process occurs in an electric furnace at about 1,600°C, where natural gas is introduced and broken down into carbon and hydrogen.
This controlled reaction, according to the company, can influence the chemical interactions inside the furnace, something that has historically represented one of the greatest challenges in metallurgy.
Conventional plants often refer to their blast furnaces as “black boxes” due to the complexity of the reactions that occur inside. By mastering this process in a single step, Hertha believes it has overcome one of the historical barriers in the industry.
Bill Gates’ Funding Boosts Climate Solution with a Focus on Scale
Support from figures like Bill Gates and Vinod Khosla to Hertha Metals reinforces the tech sector’s confidence in scalable climate solutions.
The startup has already raised over US$ 17 million and plans to launch a Series A funding round later this year to build a demonstration plant with a capacity of 9,000 tons annually.
Although the current production volume is still symbolic — only one ton per day — it represents an important milestone in the journey toward cleaner steel production.
Hertha’s plan is ambitious: to reach commercial production by 2031 and make green steel cheaper than conventional steel, something never before achieved credibly in the sector.
Bill Gates-Funded Green Steel Could Eliminate Coal Use in Plants
The use of coal is currently the backbone of the global steel industry — and also its largest source of emissions. Conventional steel production releases more CO₂ than maritime and air transport combined, according to data from BloombergNEF.
This makes decarbonization of steelmaking an urgent priority to mitigate the effects of climate change.
Hertha proposes an alternative to coal use, and unlike other startups that rely solely on green hydrogen (which is expensive and scarce), it bets on a hybrid process that can utilize natural gas or renewable electric energy. When powered by clean sources, this process can nearly eliminate emissions. Even with natural gas, the reduction reaches 50%, which would already represent a revolution.
Existing Solutions for Green Steel Face Cost and Scale Barriers
So far, companies like the Swedish H2 Green Steel and the American Electra invest in alternative routes, such as using green hydrogen or electricity to produce green iron in multiple stages. However, these processes are still expensive and difficult to scale. An emblematic example is Thyssenkrupp, which recently warned of the risk of economic infeasibility of its hydrogen-powered steel plant.
Another case is Cleveland-Cliffs, which canceled a US$ 500 million project in the U.S. due to high costs.
According to RMI and BloombergNEF, methods that eliminate carbon in steel production are expected to remain more expensive than traditional processes even until 2050 — unless disruptive innovations emerge. That’s where Hertha’s proposal comes in: to break this paradigm with a clean, efficient, and financially viable solution.
Betting on Techno-Economics: The Key is Cost and Simplicity
Hertha Metals CEO Laureen Meroueh is direct: “Creating something based only on the fact that it is beneficial for the climate is not enough in these commodity industries.” To transform the sector, it is necessary to deliver performance, scale, and competitive pricing.
This vision is shared by Rajesh Swaminathan, a partner at Khosla Ventures, who emphasizes: “Techno-economics is the most critical aspect.”
Hertha’s demonstration plant will be built in Texas and will use 30% of its capacity to produce green steel. The remaining 70% will be dedicated to supplying high-purity iron — essential for producing rare earth magnets used in electronics, electric vehicles, and medical equipment. This provides the company with a strategic diversification that can accelerate its financial sustainability.
The Challenge of Scalability and the Promise of Global Impact
Like all emerging technologies, Hertha’s innovation still needs to prove its scalability. Allen Tom Abraham, a sustainable materials specialist at BloombergNEF, warns that success in a pilot plant does not guarantee viability at scale. However, he acknowledges Hertha’s proposal as one of the most promising seen in the sector.
If the startup can achieve mass production while maintaining its pricing and efficiency proposal, it could redefine the energy matrix of global steelmaking. In a scenario where investment in green steel dropped more than half in 2024 — reaching US$ 17 billion — the bet on solutions like Hertha’s gains even more importance.
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