Recently, “meltless” recycling techniques have been presented for the light metals category, targeting both energy and material savings by bypassing the final recycling step of remelting. In this context, the use of spark plasma sintering (SPS) is proposed in this paper as a novel solid-state recycling technique. The objective is two-fold: (I) to prove the technical feasibility of this approach; and (II) to characterize the recycled samples. Aluminum (Al) alloy scrap was selected to demonstrate the SPS effectiveness in producing fully-dense samples. For this purpose, Al alloy scrap in the form of machining chips was cold pre-compacted and sintered bellow the solidus temperature at 490 °C, under elevated pressure of 200 MPa. The dynamic scrap compaction, combined with electric current-based joule heating, achieved partial fracture of the stable surface oxides, desorption of the entrapped gases and activated the metallic surfaces, resulting in efficient solid-state chip welding eliminating residual porosity. The microhardness, the texture, the mechanical properties, the microstructure and the density of the recycled specimens have been investigated. An X-ray computed tomography (CT) analysis confirmed the density measurements, revealing a void-less bulk material with homogeneously distributed intermetallic compounds and oxides. The oxide content of the chips incorporated within the recycled material slightly increases its elastic properties. Finally, a thermal distribution simulation of the process in different segments illustrates the improved energy efficiency of this approach.