Japan's Auto Industry Embraces the Recycled Plastics Wave! An Exclusive Insight into the Market’s Risks and Opportunities

Globally, the utilization of automotive recycled material resources has attracted widespread attention.

Recently, Japan's Ministry of the Environment stated that Japan plans to set a target of at least 15% recycled plastic content in new vehicles. As the EU seeks to mandate the use of recycled plastics in car manufacturing, the ministry has announced goals to promote industry collaboration. Those involved in setting these targets include the Japan Automobile Manufacturers Association (of which Toyota Motor Corporation is a member), the Japan Auto Recycling Promotion Center, the Japan Plastics Industry Federation, the Ministry of Economy, Trade and Industry, the Ministry of the Environment, and academic experts.

The ministry stated that to achieve this goal, 25,000 to 124,000 tons of recycled plastic will be needed annually. From 2036 to 2040, this target will be increased to at least 20%, which is 157,000 to 190,000 tons per year. Starting from 2041, this target will cover all vehicles, requiring 200,000 tons.

Japan initiates the green revolution in the automotive industry

In fact, the Japanese government launched the first automotive recycled plastics industry-academia-government alliance as early as last November, aiming to develop the market for recycled plastics in automotive applications. The alliance brings together 10 organizations from all stages of the supply chain, covering plastic waste management, production of recycled materials, and automobile manufacturing, to jointly analyze supply chain challenges, emphasize industry collaboration, and explore supportive measures to promote transformation.

According to the alliance report, the automotive industry needs 250,000 tons of recycled plastic annually to meet EU directive standards, with 63,000 tons expected to come from end-of-life vehicles and the rest from other sources. However, the limited availability of recycled plastics is a major challenge currently faced by the automotive industry.

Automotive recycled plastic, Image source: Mitsubishi Chemical

The report also highlights seven key challenges in the development of the automotive recycled plastics market, including a lack of incentives for plastic recycling in end-of-life vehicle dismantling, unstable quality of recycled materials, and insufficient promotion of the value of recycled plastics. To address this, a plan is in place to reconvene the alliance meeting by the end of fiscal year 2024 to review government and industry-wide policies aimed at strengthening the supply chain.

Specialized Vision believes that this series of measures shows that the application of recycled plastics in the automotive field is welcoming favorable conditions, and opposition to plastic pollution has become a broad consensus across all sectors in Japan.

Industry Dilemma: The Dual Shackles of Quality and Cost

Plastic is a commonly used material for car parts such as bumpers and engine hoods, with the amount of plastic used in Japanese car production reaching up to 1 million tons per year. However, the utilization of recycled plastic has not made much progress. The Tokyo Plastic Waste Management Institute reported that in 2022, auto parts accounted for only about 3% of the total plastic recycled and used to make new products in Japan.

Plastics Insight believes: There are two core reasons for the slow progress in the application of recycled plastics in Japan's automotive industry, which has long relied on virgin plastics:

1 recycling difficulty

The commonly used plastic varieties in cars mainly include polypropylene (PP), polyamide (PA), acrylonitrile-butadiene-styrene copolymer (ABS), polyoxymethylene (POM), polymethyl methacrylate (PMMA), polyurethane (PU), polyphenylene oxide (PPO), polyethylene (PE), etc. The plastic parts in scrap cars, such as bumpers and headlights, are typically made of their modified composite materials or alloy materials. The process of sorting plastic fragments after a car is scrapped is very time-consuming, which poses difficulties for Japanese car manufacturers in recycling plastics.

2 high price

The cost of recycled plastic is relatively high, making it difficult to widely use auto parts made from recycled plastic. The cost of recycled plastic is estimated to be 50% or even 3 times higher than that of traditional plastic. A significant increase in the use of recycled plastic may have an adverse effect on the profits of automobile manufacturers.

The Way to Break the Deadlock: Full Industry Chain Collaboration and Technological Innovation

To achieve the goal of "Japan plans to set the recycled plastic content in new cars to at least 15%", Japan is building a "design-production-recycling" closed-loop ecosystem.

in the design aspect, it is reported that Honda plans to establish a recycled plastic supply chain by around 2040 through cooperation with recyclers and chemical manufacturers. The types of plastics used in new vehicles will be reduced by about 60%, to six or seven kinds, thereby simplifying the sorting process at recycling stations. Honda's first mass-produced electric vehicle, the Honda E, uses about 25 types of plastics.

on the technical level, the collaboration between Honda and Sumitomo Chemical has yielded significant results, as they jointly developed Noblen Meguri, a polypropylene-based recycled plastic that meets high demands for appearance and durability through advanced compounding technology, and it has been applied to key visual parts of vehicles—the front grille.

At the same time, Honda is also collaborating with Mitsubishi Chemical Group and Toray Industries to process recycled plastics into materials that meet automotive use standards. Given that contaminants may weaken the strength of plastics, these partners are working together to develop and promote new technologies to improve the quality of recycled plastics, bringing them up to a level comparable to existing products.

Other members of the automotive industry are also promoting plastic recycling. Nissan and Renault will launch a program to recycle plastics from discarded electric vehicles and incorporate them into new cars produced in Europe.

Toyota Motor Corporation has set a goal that by 2030, at least 30% (depending on weight) of the plastic used in new vehicles produced in Japan and Europe will be recycled. The interior materials of Toyota's Land Cruiser 250 series sports utility vehicle are made from plastic bottles collected by the automaker. Compared to the previous generation, the amount of recycled plastic used in the C-HR small SUV sold in Europe has almost doubled.

Subaru's goal is to ensure that by 2030, at least 25% of the plastics used in new Subaru models sold globally will be made from recycled materials.

in terms of policy, Japan has demonstrated a forward-looking layout in promoting the use of recycled plastics in the automotive manufacturing sector. The Japanese government and industry partners are working closely together to explore innovative approaches to reduce plastic waste and increase the application of recycled plastics in automotive manufacturing. This collaborative model not only accelerates the adoption process of recycled plastics by the Japanese automotive industry but also sets an example for the global automotive industry, showcasing a viable path for governments and the industrial sector to work together in addressing plastic pollution and promoting green transformation.

conclusion

According to Indian research firm MarketsandMarkets, the automotive recycled materials market, including plastics, is expected to grow by about 60% from $2.2 billion in 2022 to $3.9 billion by 2027. Undoubtedly, recycled plastics are becoming increasingly important in the automotive industry. Against this backdrop, Japan's transition to recycled plastics is only natural.

Editor: Lily

Source: Akesen Environmental Technology, Special Plastics View, Petrochemical Go Global Alliance, etc.