The Finnish Climate Fund has decided to award a €4.5 million capital loan to Magsort Oy’s circular economy solution to utilise steel industry side streams
Steel and concrete production are significant sources of emissions, which is why major steps are being taken in industrial manufacturing processes to reach emissions reductions. Circular economy contributes to strengthening these climate actions by recovering valuable raw materials from steel slag for re-use.
With Magsort’s solution, almost all metal can be recovered from the waste slag – and in the future the remaining slag could even be ground into cement. The more efficient utilisation of steel slag in the industry not only creates considerable export potential but also major cumulative emissions reduction potential over the next decade, as much as 7.5 MtCO2e.
“Carbon emissions can be rapidly reduced by improving the efficiency of the global circular economy. Funding from the Finnish Climate Fund will help us tremendously to speed up our commercialisation processes and so contribute to the global circular economy,” Magsort Oy’s CEO Niklas Törnkvist describes the importance of the funding for the company. Magsort published a larger financing package, where in addition to the Climate Fund loan, the company has raised € 5,2 million in equity, from e.g. Fortum’s start-up accelerator Valkea.
The Climate Fund’s CEO Paula Laine is pleased with their fundings possibility to speed up broader deployment of Magsort’s solution towards greater emissions reductions: “All our investment decisions are based on impacts, including emissions reduction potential, in accordance with our funding criteria. For the first time our funding has a profit component where we share the risk with the customer and the interest payable on the loan in addition to the basic interest rate is linked to project profitability.”
Magsort’s solution enables the metal contained in the steel slag to be extracted in a thorough, profitable and environmentally friendly way. Magsort’s solution is based on an efficient crusher and magnet technology, and the dry process means that in the future the remaining slag after the metal extraction could be able to be ground into cement. With Magsort’s solution, almost all re-sellable metal can be recovered from the waste slag. The solution could also be utilised in the processing of existing slag piles so that side streams created earlier could be re-used as raw materials.
Should the company’s plans be realised, the solution has a significant appr. 7.5MtCO2e cumulative emissions reduction potential in the steel industry. The solution also has considerable export potential as the solution mainly targets global steel production markets outside Finland. Funding from the Climate Fund has initially been assessed based on the business and emissions reduction potential in the steel industry. However, in the longer term, the use of the solution in cement manufacturing could lead to additional emissions reduction of up to millions of tonnes of CO2e.
The €4.5 million funding from the Climate Fund is aimed at strengthening the working capital i.e. financing equipment investments. The Climate Fund loan is drawn down one unit at a time against the validation of investment-specific emissions reduction potential.
The interest on the Climate Fund’s capital loan has been priced in accordance with the reference interest rate table published by the EU, i.e. the Climate Fund is entitled to interest on its capital loan on market terms. In addition, the Climate Fund receives an additional interest rate tied to the profitability of the projects.
Saara Mattero, Communications Director, the Finnish Climate Fund, tel. +358 400 114 777, email@example.com
Niklas Törnkvist, CEO, Magsort, tel. +358 50 514 9797, firstname.lastname@example.org www.magsort.fi
The Finnish Climate Fund is a Finnish state-owned special-assignment company. Its operations focus on combating climate change, boosting low-carbon industry and promoting digitalisation. The Climate Fund invests in large-scale projects in which the fund’s investment is crucial to enable the project’s realisation in the first place, on a larger scale or earlier than it would with funding from elsewhere.
Magsort is a Finnish circular economy start-up company, which is revolutionising the recycling of bottom ash and steel slag, thereby significantly contributing to the global reduction in carbon emissions.