Like many materials, steel has a dual impact on the environment. Because it’s 100% recyclable, it can be reused and repurposed over and over again, which is a positive. The problem comes during the manufacturing phase. According to a 2021 report from Ernst & Young, steel production accounts for about 8% of the world’s carbon emissions and is a major contributor to climate change.
The rise of government-sponsored climate initiatives has put steel producers under increasing pressure to reduce their emissions. This new era will require a commitment to technologies that can speed the sustainable transition — including making greater use of renewable energy sources to power steel plants.
That’s the focus at Hybar, a startup launched in 2023 by Miami-based investment firm Global Principal Partners (GPP).
In August 2023, Hybar announced that it raised $700 million of debt and equity financing to build and operate a sustainable scrap metal recycling steel rebar mill powered partly by solar energy. The financing was led by GPP and TPG Rise Climate, the climate investing subsidiary of TPG’s global impact investing platform.
Photo Courtesy Global Principal Partners
The mill is being built in Osceola, Arkansas. It will be adjacent to the Mississippi River and a Class One railroad mainline track. The sustainability part comes from being directly connected to an adjacent solar facility, which means that during certain periods of the day, electricity used to run the facility will be generated from 100% renewable sources.
According to a news release on Aug. 2, 2023, Hybar’s mill will be the only one in North America directly connected to a solar field that can supply 100% of its energy needs. As a bonus, Hybar was granted a special rate contract with Entergy Arkansas to let the mill buy electrical power to supplement the adjacent solar-generated power when needed.
Photo Courtesy Global Principal Partners
Hybar expects its greenhouse gas (GHG) emissions to be the lowest among all steel producers in North America and “likely” the lowest in the world. Company leaders are so certain of the mill’s ability to reduce energy use and limit GHG emissions that Hybar became the world’s first steel company to get certification to issue climate bonds. Goldman Sachs served as the lead underwriter for the bond offering. Truist Securities and Crews & Associates acted as co-managers.
“The Climate Bond certification aligns perfectly with Hybar’s plan to offer our customers competitively priced rebar that is also the greenest rebar in the market,” Dave Stickler, Hybar CEO, said in a statement.
Stickler also serves as a senior managing partner at GPP, which has been investing in steel projects for nearly 17 years. Its first, SeverCorr, launched in 2007 and is now an $880 million scrap metal recycling and steel production facility owned by Steel Dynamics.
Photo Courtesy Global Principal Partners
Other GPP projects include Mississippi Silicon, a silicon metal producer formed in 2015, and Big River Steel, a $1.6 billion scrap metal recycling and flat-rolled steel mini-mill launched in 2017 and was later sold to U.S. Steel.
The Hybar plant gives GPP a chance to move the ball forward, not just in terms of steel production but also in sustainability.
“The global steel industry accounts for 7–9% of global CO2 emissions today, which creates a massive opportunity for Hybar to drive decarbonization at scale,” Mike Stone, partner at TPG, said in a statement following Hybar’s financing round.
