Steel manufacturer Nucor and clean energy startup Helion announced an agreement to develop a 500 MW fusion power plant at a U.S.-based Nucor steel manufacturing facility, providing the facility with zero-carbon electricity.

According to the companies, the collaboration marks the first fusion energy agreement of this scale, and a significant milestone towards industrial decarbonization.

Nucor also announced a $35 million investment in Helion, aimed at accelerating fusion deployment in the U.S.

Nucor CEO Leon Topalian said:

“This project marks a tremendous milestone in the potential for the use of nearly limitless clean electricity for industrial manufacturing. By entering this agreement, we are demonstrating our commitment to be the cleanest steel producer in the world, while setting an example for all manufacturing companies.”

Fusion, the process of combining two atoms to form a single atom to release energy, has been long referred to as the “Holy Grail” of clean and abundant energy production, given its potential to produce power from hydrogen – the most common element in the universe – without producing carbon emissions associated with fossil-fuel based power, and without the highly radioactive output of nuclear fission processes. Large scale fusion energy generation has been elusive, however, given the need to create extremely high temperatures and pressure.

Founded in 2013, Helion’s approach to fusion generation includes technologies such as the use of a pulsed non-ignition fusion system to overcome some of the physics challenges of fusion and the use of deuterium and helium-3 as fuel. Helium-3’s properties enable smaller and more efficient systems, but the element has historically been very difficult to produce. Helion can produce Helium-3 utilizing a patented process that fuses deuterium in its plasma accelerator.

Helion is currently working on its seventh fusion prototype, which it expects to demonstrate the ability to produce electricity next year.

Steelmaking is one of the biggest emitters of CO2 globally, and one of the more challenging sectors to abate, with total greenhouse gas emissions (GHG) from the sector accounting for 7% – 9% of direct emissions from the global use of fossil fuels.

Nucor produces steel using recycled scrap metal in an electric arc furnace, enabling the company to operate with GHG intensity more than 60% below the global average. The company has committed to reducing its emissions intensity by 35% by 2030. One of the key methods to decarbonize its facilities is to increase the use of clean electricity. Currently, approximately 40% of the company’s electricity use comes from clean or renewable sources. The company estimated that deploying fusion at one of its largest mills could reduce emissions by 500,000 metric tons annually.

The companies said that they are committed to begin operation of the new fusion plant as soon as possible, with a target of 2030.

Helion CEO David Kirtley said:

“We’re passionate about helping the world reduce its dependence on carbon-based energy sources with abundant, clean fusion power. We are excited to partner with Nucor, a leader in decarbonization in the steel industry. A project like this is only made possible by working with a forward-looking company like Nucor which is committed to decreasing its carbon emissions.”