Japan is shifting its end-of-life vehicle (ELV) recycling strategy from energy recovery to material circularity. Kazunori Kitagawa, Chief of Eco Management at Japan Productivity Center at jpc-consulting.jp, explains how new regulations, industry collaboration, and J-FAR-led innovations are driving efforts to recover plastics, metals, and glass, bringing Japan closer to a sustainable, closed-loop automotive recycling system.
Laying the Groundwork for Material Recovery: J-FAR’s Role in Advancing ELV Plastic Recycling
Under the Japanese Automobile Recycling Law, based on the extended producer responsibility, the automobile manufacturer or importer is given the responsibility to properly collect, process, and recycle the airbags and refrigerants (CFC & HCFC) contained in ELVs, as well as the Automotive Shredder Residue (ASR) generated after shredding.
Under the Japanese Automobile Recycling Law, automobile manufacturers must calculate the weight of ASR generated when each model of automobile they manufacture is shredded based on specific calculation rules. Then, they must determine the corresponding ASR cost and include it in the “recycling fee” when selling the automobile. The weight of ASR must be calculated so that it includes the plastics, glass, rubber, and some non-ferrous metals contained in the automobile.
Under the current law, automobile manufacturers take back the ASR and recover it, with the method of recovery primarily involving energy recovery. For example, it is used as a blast furnace reducing agent in cement kilns and pulp factories, among others.
So far, Japan does not have advanced ASR sorting facilities like the post shredding technology (PST) plants in Europe, so ASR has rarely been recycled as a material and has been used as an alternative energy in industry. The reason for this is that in Japan, energy recovery is also called “thermal recycling”, and there is no clear distinction between energy recovery and material recycling.
However, after a draft of the EU ELV regulation was published, Japanese stakeholders learned that new cars may have to contain recycled plastics from around 2030 and began to work on reforming the way.
The most basic goals of these reforms are broadly twofold: first, to have dismantlers remove plastics, glass, rubber, and non-ferrous metals from ELVs before shredding them and put them on the material recycling supply chains, and second, to recover ASR after shredding by using advanced sorting technology (PST) to make it high enough to be recycled as material.
Therefore, J-FAR supports the following projects (development of equipment, pilot projects, etc.):
- Supporting the development of technology to separate high-purity plastic materials from ASR by type of plastic.
- Standardizing the work method and measuring the work time to remove and separate non-plastic materials from plastic parts & components removed from ELVs during the dismantling process.
- Research and awareness-raising related to the creation of a supply chain that can realize the recycling of glass from ELVs.
- Supporting the development of technology to separate aluminum materials contained in ELVs classified by quality, etc.
Japan’s Thermal Recycling Focus: A Divergent Path from Europe’s Material-Centric Approach
As mentioned above, recycling in Japan, based on the Automobile Recycling Law, has not focused on material recycling. Instead, it has emphasized prioritizing effective use that is in harmony with Japan’s specific industrial structure. The effective means of recovering ASR that were found were using it as a blast furnace reducing agent and as heat in cement plants, etc. These types of use were once practiced in Germany, but they gradually declined due to the emphasis on material recycling and cost concerns.
I believe the paths that Europe and Japan have taken have largely diverged, depending on whether their basic waste management systems prioritise recycling and energy recovery.
However, Japan will need to adopt the European approach from now on, which will require a considerable amount of time and effort.
EU Pressure Sparks Action: Rising Demand and New Opportunities in Japan’s ELV Recycling
Of course, the first driver is the EU regulation. Without that, the current movement in Japan to emphasize material recycling cannot be explained. However, some Japanese dismantlers have been independently collecting and sorting plastic and aluminum parts and selling them to specific customers for the purpose of material recycling, even before the government and automakers initiated this movement.
However, these activities were small in scale, and there was not enough demand in this country. Now, thanks to the EU, the demand for recycled materials is on the rise, including not only plastics but also aluminum, copper, and glass. With the expected increase in demand, there are high expectations for dismantlers and material recyclers in Japan to supply recycled materials, and an increasing number of dismantlers and shredders are actively responding to this kind of situation as a business opportunity.
However, the problem at present is that even if dismantlers remove these materials manually of good quality and hand them over to material manufacturers, the selling price is not enough to fully cover their labor costs. It seems that it will take some more time to solve this problem.
Incentivizing Collaboration: Building a Closed-Loop Recycling System Through Policy Reform
As mentioned above, Japan’s Automobile Recycling Law has been implemented in such a way that ASR is collected from shredder companies, and the automakers themselves entrust the recovery of the ASR to blast furnaces and cement manufacturers, among others. Therefore, the recycling fees received from car buyers have been paid by automakers to blast furnaces, cement plants, etc.
However, from April 2026, a system will be started in which dismantlers will be paid a recycling fee corresponding to the volume of plastic, glass, aluminum, etc. They collect from ELVs and hand them over to certified material recyclers. Because those things are considered to have contributed to the reduction of ASR, the dismantlers can receive some money from a recycling fee fund.
Currently, the average recycling fee for one car is approximately 11,000 yen (around €68), and a portion of this is paid to dismantlers as an incentive. So, in Japan, this method is called the “Incentive System” under the Automobile Recycling Law.
However, some dismantlers are of the opinion that the cost is too low and they are not willing to go to the trouble of manually removing those kinds of parts.
Behind the 99% Rate: How Strong ELV Management Drives Japan’s Recycling Success
It is true that the Japanese Ministry of Economy, Trade and Industry and the Japan Automobile Manufacturers Association have stated that the “recycling rate” (or more precisely, “recovery rate”) for ELVs has reached approximately 99%, but it should not be forgotten that this “recycling” rate includes energy recovery. I believe that Japan’s achievement of such a high recovery rate is due to the high level of management of ELVs, rather than innovation in recycling technology.
In Japan, all new and used cars have “recycling tickets” and are 100% managed by an electronic system operated by JARC (Japan Automobile Recycling Promotion Center: I am in charge of the Auditor). Even after becoming an ELV, the car’s airbags, refrigerants, and ASR are managed in a way that makes it completely clear which processing company processed them or exported them overseas. In Japan, cement companies and steel manufacturers say that they are proud of their ASR desalination technology, so I think they are making such efforts as well, but more than that, I believe that the high level of management of ELVs based on Japan’s Automobile Recycling Law is a major factor in producing such a good result.
Therefore, Europe can learn a lesson from Japan: stronger control over the physical management of ELVs across all EU member states will undoubtedly bring significant benefits to the transition to a circular economy for automobiles in Europe.
