By Kari Lydersen
This story was originally published by Canary Media.
A Chicago-area startup says its technology could shave emissions from the global metal industry by allowing companies to recycle grimy metal slivers and sludge left over from steel and aluminum production.
Steel and aluminum production account for about 7% of the world’s carbon emissions, according to the International Energy Agency. Decarbonizing the sector is expected to be a huge and costly undertaking, involving the overhaul of industrial processes more than a century old and the retrofitting of sprawling mills.
Sun Metalon aims to take smaller bites of the steel-decarbonization apple with an oven-sized box that promises to extract recyclable metal from a waste stream that would otherwise be sent to a landfill.
“You’ve got a company throwing something away, in some cases paying to throw it away because it’s contaminated with toxic materials. [Sun Metalon is] offering a way to create value from that,” said Nick Yavorsky, senior associate for the climate-aligned industries program at the clean energy nonprofit RMI, which is providing Sun Metalon 18 months of mentorship as part of its Third Derivative cleantech business accelerator.
On May 21, the company announced it had raised a total of $9.1 million in second-round startup funding from four investors, including Japanese steelmaking giant Nippon Steel.
The great majority of steel and aluminum in the U.S. is made from recycled metal, not raw ore. That’s fortunate, since creating this recycled metal emits much less carbon emissions than forging it from scratch. And that means increasing the amount of metal that can be recycled is one means of decarbonizing the industry.
“Some companies are looking at making steel in a new way, fully electrified,” as opposed to powered by coke, an energy-dense substance derived from coal, Yavorsky said. “Maybe there is not as much sexiness around folks reducing demand [for new steel], thinking about alternative materials. Yet these often are the fastest and most direct way to reduce emissions.”
Hot boxes: How Sun Metalon’s tech works
Sun Metalon CEO and co-founder Kazuhiko Nishioka said he got the idea for the technology while working at Nippon Steel and studying for a PhD at Northwestern University near Chicago with Nippon’s support. In 2021, he and two colleagues at Nippon founded the company as they did DIY experiments to clean up tiny scraps too contaminated with oil or other substances to be recycled.
They received two patents on the heating technology in 2024. Sun Metalon’s units are modular “ovens” that can be placed on a factory or foundry floor; the metal waste fed into them is basically cleaned with intense heat and turned into “pucks” or “coins” that can be recycled in metal-making processes.
“We apply our heating, evaporate fluids, condense [impurities] back to liquid, and collect it,” explained Nishioka, noting the process involves reaching the boiling point of oil. The whole thing is powered by electricity, making it carbon-free if renewable energy is available.
“Sometimes scrap has a negative value, especially for sludges — no one can recycle it, so they have to pay for disposal,” he said. “We can bring it up to best or second best” in the value chain of recycled metal feedstock. “Then the profit can be shared among customers.”
The pucks can be sold to electric arc furnaces — essentially steel mills making recycled steel — or other metal recycling operations. Or they can be used onsite; for example, a car factory could channel metal waste from one part of the production line back into making new engine blocks.
“We are reducing new metal, and secondly, we are reducing logistics — nobody has to come pick it up” in diesel-burning trucks, said Nishioka.
Iulian Bobe joined Sun Metalon as chief strategy officer after co-founding a textile recycling company called Circ. He said steel and aluminum manufacturers are very eager to reduce their waste streams and their emissions; meanwhile, in Europe, decarbonization mandates drive demand.
“They’re really trying to get to a situation where they have zero landfill,” Bobe said. “They’re looking for solutions that can be implemented in the factories. You really don’t want to haul all that waste to another location. Our solution is very modular — we can put it on the site, achieving the circularity.”
Major companies get on board for testing
Sun Metalon says it has received a total of $40 million from investors. Both Toyota Motor Co. and the construction equipment manufacturer Komatsu have purchased its equipment, tested it in their facilities, and promised to work with Sun Metalon to scale up the technology.
A 2024 press release from Komatsu explains that making the high-chromium cast-iron sealing rings used on undercarriages of its equipment produces a lot of polishing sludge — “a difficult-to-handle mixture of fine metal particles, oil, and water.”
Each year, Komatsu produces 150 tons of the sludge, which is hard to safely melt and recycle, according to the release — but Sun Metalon could change that.
“This endeavor not only promises significant resource conservation and waste treatment cost reductions but also aligns with broader decarbonization efforts in metal processing,” says the press release.
Toyota Motor Co. and Sun Metalon presented results of their tests at a May 2023 conference of the Japan Foundry Engineering Society, according to a Sun Metalon press release. (Nishioka declined to put Canary Media in contact with representatives of those companies, other investors, or potential customers.)
The Round A funding announced recently included Airbus Ventures, a Japanese bank, and an innovation fund, along with Nippon Steel, which is seeking to acquire U.S. Steel, including its Gary Works mill in Northwest Indiana. In recent weeks, President Donald Trump has expressed his support for an acquisition that would include decision-making power for the federal government — a sharp turn from promises he made on the campaign trail to block the move.
The Recycled Materials Association, a trade group that represents metal recycling, noted that over 70% of steel and 80% of aluminum in the U.S. is made from recycled material.
“Compared to the processing and transportation needed for mining, drilling, harvesting, or other methods of extracting natural resources for manufacturing, the use of recycled materials typically produces fewer greenhouse gas emissions,” Rachel Bookman, a spokesperson for the organization, said by email.
The trade association declined to comment specifically about Sun Metalon, which is one of its members.
A CEO’s vision for the future of metals
Nishioka said the technology could be useful for “automotive and aerospace, construction machinery, any product using metal,” adding that he plans to pitch to steel mills and foundries in the Midwest and South.
“Any process melting metal can benefit,” he continued, “either companies that are melting metal or companies purchasing from those companies.”
Nishioka imagines that with more innovation, the modular technology could be used not only to prepare metal for recycling but to actually create metal products.
He’s also hopeful that new industrial processes could spur manufacturing in developing nations, an idea inspired by his time volunteering in Kenya as an undergraduate student.
“My original vision was to bring compact steelmaking processes into a couple different boxes,” he said. “We can bring those boxes wherever we want. It could be in Africa, or on Mars.”
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Featured image: Metal scrap outside a foundry to be recycled. (Photo Credit: iStock)
