Japan expands critical metals recycling as Middle East supply chain concerns grow

As Japan seeks to reduce its reliance on imported critical resources, two of the country's largest companies are joining forces to recover aluminum from used commercial air conditioners.

Trading house Itochu and air conditioner manufacturer Daikin Industries are launching a joint venture to recycle aluminum from decommissioned commercial cooling systems, as Japanese media reports.

The move that has gained added significance amid global supply chain disruptions linked to the recent US-Iran conflict.

Japan depends heavily on overseas suppliers for aluminum, with nearly one-third of its imports coming from the Middle East. The new venture, which will operate under Tokyo-based Itochu Metals, an Itochu subsidiary, is expected to begin operations by the end of the year.

The company will collect used Daikin air conditioners from commercial buildings and office facilities before dismantling them and separating components such as heat exchangers and motors. Specialized scrap processors will then recover aluminum alongside other valuable metals, including copper and iron.

Unlike residential air conditioners, which are covered by Japan's home appliance recycling law, commercial units are generally treated as industrial waste. Although waste processors recover materials from discarded equipment, they typically sort them into broad categories such as nonferrous metals or plastics, resulting in lower-purity recycled metals that are difficult to reuse in products with strict quality requirements, including automobiles and new air conditioners.

Itochu and its partners plan to introduce more precise sorting and processing methods to recover high-purity aluminum and other metals suitable for reuse in Daikin products.

According to Daikin, a standard commercial air conditioner contains about 63 kilograms of recyclable metals and plastics, including roughly 7 kilograms of aluminum and 8 kilograms of copper.

Around 850,000 commercial air conditioners were shipped in Japan during fiscal 2025, according to the Japan Refrigeration and Air Conditioning Industry Association, with Daikin estimated to account for between 40% and 50% of the domestic market. If 300,000 units are recycled annually, the initiative could recover approximately 2,000 metric tons of aluminum and 2,300 metric tons of copper.

Itochu Metals already operates recycling and maintenance businesses for equipment such as convenience store shelving and refrigerated display cabinets. The company eventually plans to expand the program beyond Daikin products to include commercial air conditioners from other manufacturers.

The initiative aligns with Japan's broader push to strengthen its circular economy. In April, the government introduced new targets for recycled materials, calling for 40% of wrought aluminum used in domestically manufactured products, including automobiles, to come from recycled sources. The target for copper is 30%.

According to Japan's Ministry of Finance, the country imported 2.11 million metric tons of aluminum in 2025, with 580,000 tons—around 28% of the total—coming from the Middle East, underscoring Tokyo's efforts to diversify supply and boost domestic recycling.

By Nazrin Sadigova