Japanese automakers to utilise recycled plastic to manufacture new models

Japanese automakers Honda Motor and Nissan Motor are spearheading efforts to establish supply chains for recycled plastic in the automotive industry, according to information obtained by Nikkei. This initiative is driven by the dual goals of enhancing vehicle sustainability and preparing for anticipated European regulations.

Plastic plays a crucial role in automobile manufacturing, being utilized in various components such as bumpers and interior parts. The European Commission proposed in 2023 that at least 25 per cent of the plastic used in new vehicles should be recycled. This regulation could come into full effect as early as 2031, potentially barring non-compliant vehicles from being sold in the European Union.

Currently, the automotive sector's use of recycled plastic is relatively low. According to 2022 data from the Tokyo-based Plastic Waste Management Institute, auto parts accounted for only about 3 per cent of all plastic recycled into new products in Japan. The time-consuming process of sorting plastic pieces from scrapped vehicles has been a significant barrier to increased recycling in the automotive industry.

Honda is taking a proactive approach by aiming to establish a recycled plastic supply chain by around 2040. The company plans to collaborate with chemical manufacturers and recycling companies to achieve this goal. As part of this strategy, Honda intends to reduce the types of plastic used in new cars by approximately 60 per cent, limiting it to six or seven types. This reduction will simplify the sorting process at recycling facilities. For context, Honda's first mass-produced electric vehicle, the Honda-e, utilised around 25 different types of plastic.

To ensure the quality of recycled plastic meets automotive standards, Honda will work with Mitsubishi Chemical Group and Toray Industries. These partnerships aim to develop and commercialise technologies that can improve recycled plastic quality to match that of existing products, addressing concerns about impurities affecting material strength.

Nissan is also making strides in this area, partnering with Renault to launch an initiative for recycling plastic from scrapped electric vehicles. This recycled material will be used in new vehicles assembled in Europe. Nissan is considering investing in a Renault recycling unit, with details such as investment size yet to be determined.

Toyota Motor has set an ambitious target of having recycled plastic constitute 30 per centor more of the plastic used in new vehicles manufactured in Japan and Europe by 2030, measured by weight. The company has already incorporated recycled materials in some of its models. For instance, the Land Cruiser 250 series SUVs feature seats made from plastic bottles collected in-house, while the European version of the C-HR small SUV has roughly doubled its use of recycled plastic compared to its predecessor.

Subaru has also joined this trend, aiming for recycled materials to make up at least 25 per cent of the plastic used in new in-house models sold worldwide by 2030.

However, the adoption of recycled plastic in auto parts faces a significant challenge in the form of higher costs. Recycled plastic is generally estimated to be between 50 per cent more expensive to triple the cost of conventional plastic. A substantial increase in recycled plastic usage could potentially impact automakers' profitability.

To support this industry-wide effort, the Japanese government plans to launch a public-private entity as early as September. Coordinated by the Environment Ministry, this group is expected to include about 10 organisations, such as the Japan Automobile Manufacturers Association and the Plastic Waste Management Institute. This entity will facilitate cooperation on various aspects of recycled plastic supply, with the ministry considering providing necessary investments.

The push towards increased use of recycled plastic is not limited to Japanese automakers. European brands like Mercedes-Benz and BMW are also moving in this direction, driven by the anticipated tightening of regulations in Europe. According to data from the India-based research company Markets and Markets, the market for recycled materials in the automotive industry, including plastic, is projected to grow by about 60 per cent from its 2022 level, reaching USD 3.9 billion by 2027.

This comprehensive shift towards recycled plastic in the automotive industry reflects a growing awareness of environmental concerns and regulatory pressures, potentially reshaping supply chains and manufacturing processes in the coming years.