The Finnish Climate Fund: €8 Million Loan to Foundry Sand Recycler Finn Recycling

The Climate Fund has granted an 8 million euro capital loan to Finn Recycling Oy, which has developed a regeneration solution and service model enabling the reuse of waste sand generated by metal foundries. The purpose of the funding is to accelerate the deployment of reclamation equipment and the company’s entry into the international market.The annual global consumption of sand products, that is, sand, gravel and crushed rock, is in the region of 40–50 billion tonnes. The carbon-intensive metal industry uses sand in particular in foundries manufacturing products such as machine parts. Every tonne of metal cast generates roughly one tonne of waste sand, which amounts to nearly 10 million tonnes of waste sand each year in Europe alone.

Finn Recycling’s regeneration solution extends the service life of foundry sand and thus reduces the use of virgin sand and the amount of waste sand and greenhouse gas emissions generated by foundry processes. In addition to its novel technology, the solution features an innovative service model for bringing new technology to market and scaling it up.  

”The foundry industry consumes over 100 million tonnes of sand each year, without recycling the waste sand generated by its processes. This model is unsustainable for both the environment and the industry.  The Climate Fund’s investment makes it possible for the foundry industry to adopt a more sustainable sand management model”, states Kalle Härkki, CEO of Finn Recycling.

“Sand is the world’s most used natural resource right after water, and its consumption is projected to grow due to urbanisation and increased construction activity. In addition to carbon dioxide emissions, sand mining causes a number of detrimental effects on the environment, such as accelerated erosion, groundwater pollution and the degradation of biodiversity. Circular economy solutions, such as Finn Recycling’s foundry sand regeneration equipment and services, are a vital component in our response to these challenges”, says Climate Fund CEO Paula Laine.

Finn Recycling’s Solution

Finn Recycling has developed a foundry sand treatment or regeneration technology and a modular sand reclaimer utilising that technology. The reclaimer treats waste sand thermally and mechanically to increase the recycling rate of foundry sand and reduce the consumption of virgin sand. The company has been treating the waste sands of three Finnish foundries in Nuutajärvi since 2019.

Metal foundries use sand in their moulds and add a binding agent to the sand to keep the moulds together during the casting process. The heat of the molten metal causes the binding agents to adhere to the surface of the sand grains, reducing their reusability. The most common solution to this problem is to replace used sand with virgin sand and the contaminated sand is disposed of in landfills. Mechanical recycling typically achieves a 70–90% recycling rate for used sand. Finn Recycling’s reclaimer is able to regenerate approximately 95% of the used sand.

The ten-year cumulative emissions reduction potential of a single reclaimer is approximately 2.8 kt CO2eq. If the company’s ambitious business plan succeeds, the theoretical ten-year cumulative global emissions reduction potential of the solution is estimated at 1 Mt CO2eq. However, the final emissions reductions will depend on the number and locations of the foundries using the company’s services. The project’s principal markets and emissions reduction potential are found abroad.

The company has collected approximately 26.5 million euro in funding for reclaimer production and the scale-up of operations. In addition to the 8 million euro capital loan from the Climate Fund, the 26.5 million euro total funding consists of a mix of loan and equity funding. The interest on the Climate Fund’s capital loan is priced at the market rate and the capital loan also includes a conversion right.