Tokyo, April 15th (Argus) - On April 14th, Japanese air conditioning giant Daikin and three other companies announced that they will jointly launch an initiative to recover and reuse rare earth magnets from the compressors used in commercial air conditioners.
Daikin, Japanese chemical company Shionogi, manufacturer Hitachi, and recycling company Tokyo Eco Recycle plan to develop automated equipment in 2026 and start full operation in 2027. Daikin stated that the plan aims to reduce the environmental impact of the entire circular economy and supply chain by recovering rare earth magnets.
The company said that its goal is to collect approximately 10,000 compressors per year and eventually recycle several tons of rare earth magnets annually.
Compressors are the core components of air conditioners. They compress and circulate refrigerants. The internal motors of them use rare earth magnets such as neodymium. Daikin initiated this initiative because Japan does not have an established recycling framework for rare earth magnets contained in commercial air conditioner compressors.
According to the plan, Daikin will collect the compressors, while Tokyo Eco Recycle, which is in collaboration with Hitachi, will extract the rare earth magnets. Shionogi will use the recycled magnets as raw materials to produce new rare earth magnets. The entire process from collection to re-manufacturing will be managed through a centralized data system. The two companies will also increase recycling efficiency through automated operations and optimize the disassembly process for different vehicle models using artificial intelligence-based image recognition and robotic technology.
Rare earth magnets are essential materials for air conditioners and electric vehicles. Most of the global supply is concentrated in China, which makes supply chain resilience a key challenge. The Japanese Ministry of the Environment has allocated approximately 37.9 billion yen (equivalent to 238 million US dollars) in its 2026 fiscal year budget to promote the recycling and utilization of rare metals and rare earth metals.
A Japanese environmental ministry official stated that domestic recycling of key minerals such as rare earths not only helps protect the environment but also reduces dependence on specific countries and stabilizes the supply chain. From an economic security perspective, this is extremely important.
