This story was originally published by Canary Media.

When rockets blast off Earth, they rely on tiny metal powders to help propel them into space. Now, an emerging group of startups and scientists is hoping to harness these particles for something more terrestrial: producing carbon-free energy for factories.

Powdered iron can be combusted in industrial boilers to supply the hot water and steam needed to produce everything from beer and baby formula to paper and plastic resins—without directly emitting carbon dioxide. The concept is about a decade old, but companies are just starting to make serious inroads to put the technology into practice.

In early March, the Dutch startup Renewable Iron Fuel Technology, or Rift, said it raised almost 114 million euros (US$131 million) in private financing and public grants to develop its first commercial project, making it a front-runner in the space. Rift already operates two pilot units in the Netherlands. With the new investment, the firm plans to build a fuel-production plant and deploy its boilers in about 10 industrial facilities in Europe, the first of which is set to fire up in 2029.

“This represents a concrete step toward decarbonizing industrial heat at scale,” said Mark Verhagen, CEO of the Eindhoven-based Rift.

Around the world, most factories burn fossil fuels to get the heat they need for industrial processes, which is why the sector accounts for more than one-third of energy-related carbon dioxide pollution globally. Rift estimates that its current system can reduce emissions by almost 80%, on a life-cycle basis, when compared with those of a fossil-gas-fired boiler.

The startup is seeking to scale at a pressing time in the European Union, where manufacturers are facing tighter restrictions on emissions and new policies aimed at shifting factories toward cleaner heat sources. The region is also grappling with ballooning gas prices caused by Russia’s 2022 invasion of Ukraine—and now the U.S. and Israel’s war on Iran.

Rift’s approach replaces gas with iron, a highly energy-dense and abundant element that is ground down to resemble sand.

The startup begins by putting iron powder in a specialized boiler, then injecting air and making a little spark that yields a big flame. As the iron burns, it produces heat that can be used directly for manufacturing or district-heating networks. To start, Rift is focused on supplying medium-temperature heat, of around 250°C.

“The only product that remains are the ashes,” Verhagen said.

Rift will initially use a small amount of virgin iron powder, sourced from industrial suppliers. But the goal is to continually recycle the ashes—which are pure iron oxide—to make new fuel. When combined with low-carbon hydrogen, iron oxide splits into water and iron powder, the latter of which will be returned to the boiler.

As a technology, iron fuel has plenty of hurdles to overcome before it can replace gas in factories. Researchers are still improving the iron-combustion process and the techniques for collecting iron oxide. Companies need to build up supply chains for sourcing and recycling iron powder. And using green hydrogen—the kind made with renewable energy—for fuel production remains challenging, given that supplies are limited and costly.

Developers also need to bring down their production costs in order to compete with the incumbent fossil fuels. Rift, for its part, is working to improve its economic performance with the buildout of its first commercial project, Verhagen noted. The company says it can currently deliver iron fuel for a price of 140 euros per tonne.

The investment round announced on March 3 includes more than 83 million euros in Series B funding, led by the Dutch pension fund PGGM, as well as a grant of nearly 31 million euros from the EU’s Innovation Fund. Rift had previously raised 11 million euros from investors in 2024, which enabled it to conduct durability tests at its two pilot projects.

“We have closely followed Rift’s development and see strong potential for tangible industrial impact,” Tim van den Brule, investment director at PGGM Infrastructure, said in a press release. ​“Many industrial innovations stall in the transition from demonstration to realization,” he added, which is why the firm is providing Rift with capital ​“through to execution.”

Rift is not alone in this fledgling field. Other players include the Dutch startup Iron+ and the Canadian firms Altiro Energy, FeX Energy, and GH Power, along with Ferron Energy in Australia and Fenix Energy in France.

The companies can all trace their roots to early research efforts led by Philip de Goey from Eindhoven University of Technology and Jeff Bergthorson from Montreal’s McGill University. The professors were inspired to pursue metal fuels for energy purposes after observing how powders burned at the European Space Research and Technology Centre in the Netherlands. In particular, they saw iron powder as an appealing alternative to gaseous hydrogen fuel—which has been held up as a more direct replacement for fossil gas but is difficult to store and transport.

In 2020, Eindhoven researchers and students, including Verhagen, built their first 100-kilowatt iron fuel boiler at a nearby brewery. That year, Rift spun out of the student team, with support from the Bill Gates–led Breakthrough Energy Fellows program. The startup later launched a 1-megawatt system that provides heating to some 500 homes in the Dutch city of Helmond; it operates another pilot unit at a cleantech park in Arnhem.

In 2025, Rift signed its first customer contract with the Dutch firm Kingspan Unidek, which makes building insulation and plans to install an iron-fueled boiler at one of its plants.

Verhagen said that, as well as with slotting into existing operations like Kingspan’s, the technology could also work alongside other types of clean-heat solutions that are gaining momentum globally, such as thermal batteries, which store electricity to provide on-demand heat, and highly efficient industrial heat pumps.

Iron fuel could serve as the ​“baseload” source that supplements electrified technologies, or that kicks in when electricity prices are high or otherwise constrained. ​“We see that there’s a unique fit” for Rift’s system, he said.