If it’s one thing the United States is good at, it’s recycling metals. While the country’s plastic recycling may not be the best, according to the Rocky Mountain Institute, roughly 70% of the steel made in the U.S. comes from this recycled scrap, with collecting, sorting, and recycling of the scrap done at a rate between 80 and 90%.
Metal can be infinitely recycled, however, the usage of recycled steel, known as secondary steel, is lower than the U.S. in much of the world. In the European Union, for example, secondary steel is used at a rate of 56%, and in China, only 22%. When primary steel production is a carbon-intensive endeavor — accounting for 95% of its emissions and notoriously hard to decarbonize — metal recycling is a game-changer.
According to the World Economic Forum, the secondary steel process reduces steel’s energy intensity by 2.5 times, because melting scrap steel requires much less energy than creating new steel.
While less carbon-reliant methods for both production and recycling are needed for a truly net-zero and fossil fuel-free world, globalizing metal recycling is essential to creating an international secondary steel market, especially in the world’s fastest industrializing and urbanizing places.
And Cologne, Germany-based Metycle is doing just that.
Last month, the startup announced a $5 million seed funding round for its global, digital metal recycling and trading marketplace. The round was led by Project A with the participation of Partech, and its existing investors, Market One Capital and Dutch Founders Fund (DFF), as well as industry angels.
This is how the platform works. Buyers and sellers can trade any metals and mixed metals, from steel to aluminum to copper, and through Metycle, a trusted German third party monitors the payments and logistics of the trading. The startup also conducts quality control and takes care of the shipping process which buyers and sellers can track live. Essentially, Metycle is operating as a global middleman for metal recycling, and working to become the Amazon of the industry.
“Metal recycles forever without quality loss. It’s a key reusable commodity for infrastructure and investment goods production and the key material for the green energy transition towards a carbon-neutral world,” Rafael Suchan, co-founder of Metycle said in a statement. His co-founder, Sebastian Brenner, adds: “We want to make sure that the highest amount of metals possible are recycled properly, safely, and beneficial to the environment. With Metycle we aim to be the world’s most efficient and trusted marketplace for secondary metals.”
On top of reducing the emissions of steel by 60-95%, increasing scrap metal usage also decreases the amount of minerals mined for metal production. If that isn’t enough, secondary steel is also expected to play a big role in the energy transition, as more steel and other metals are needed to build electric vehicles, solar systems, long-duration batteries, and wind turbines.
With its new capital, the startup aims to enhance its platform, using artificial intelligence to measure the quality of scrap metals, as well as expand into new geographies. With the round, the company also signed a partnership with finmid, a financial service firm for software companies, for trade financing.
“We’re thrilled to be partnering with Metycle to help make transactions simpler and more secure for their customers, helping to facilitate more efficient trading of secondary metals,” Max Schertel, a cofounder at finmid said in a statement. “By combining finmid technology with Metycle ambition to digitize the metal recycling industry, together we are improving transparency and trust in trade within the industry globally.”