Collaboration Begins for Recycling Rare Earth Magnets from Commercial Air Conditioner Compressors
Daikin, Shin-Etsu Chemical, Hitachi, and Tokyo Eco Recycle have launched a collaboration to create Japan's first circular scheme for recycling rare earth magnets from commercial air conditioner compressors. The project will use AI and robotics to automate the disassembly and demagnetization process, aiming for full-scale operation by 2027. This initiative seeks to promote a circular economy, reduce environmental impact, and eventually expand into a new business model for the entire manufacturing industry.
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- 📰 Published: April 14, 2026 at 21:07
- 🔍 Collected: April 14, 2026 at 12:31
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Overall picture of this collaboration
Daikin Industries, Ltd. (hereinafter, Daikin), a company in the air conditioning business; Shin-Etsu Chemical Co., Ltd. (hereinafter, Shin-Etsu Chemical), which manufactures and recycles rare earth magnets; Hitachi, Ltd. (hereinafter, Hitachi), which possesses technology for resource recovery and recycling; and Tokyo Eco Recycle Co., Ltd. (hereinafter, Tokyo Eco Recycle) have begun an industry-spanning collaboration (hereinafter, this collaboration) to establish Japan's first circular scheme (hereinafter, this scheme) for recovering and recycling rare earth magnets from Daikin's commercial air conditioner compressors that are replaced during repairs and overhauls in Japan. The process of disassembly, demagnetization*1, and removal of rare earth magnets will be automated and made more efficient by utilizing AI image recognition technology and robots. Traceability and optimization will be achieved by managing the data of the collection, disassembly, and quality assessment processes with an integrated system.
The four companies plan to proceed with the development of automated equipment and other technologies by 2026, with the full-scale operation of this scheme scheduled to begin in 2027.
About this scheme
Daikin will collect compressors from its own commercial air conditioners, and Tokyo Eco Recycle will handle the disassembly, demagnetization, and removal of the rare earth magnets. Based on technical information provided by Daikin, Tokyo Eco Recycle, together with Hitachi, will leverage its years of technology and know-how cultivated in recycling household compressors. They will also link AI image recognition technology with robots to improve the efficiency of the disassembly process, which differs for each model type. Furthermore, they will reduce the environmental impact by using resonant damping demagnetization technology*2, which does not directly generate CO2. Shin-Etsu Chemical will then manufacture new rare earth magnets using the extracted rare earth magnets as recycled material.
This scheme is an initiative to promote a circular economy and reduce the environmental impact on the supply chain through the recycling of rare earth magnets. In the future, the aim is to expand this into a new business model by creating partnerships with companies and organizations that share the vision of this collaboration, such as Hitachi Global Life Solutions, Inc., which is also in the commercial air conditioner business. This will contribute to the Green Transformation (GX) not only of the air conditioner industry but of the manufacturing industry as a whole.
Each company's initiatives related to the circular economy
Daikin is promoting initiatives for a circular economy as a key measure. The top priority is the recovery and recycling of refrigerants, which are essential for air conditioners, and the company is developing a system for stable circular use. It is also engaged in initiatives that consider resource circulation from the design and development stages, such as making products smaller and longer-lasting, reducing the materials used, and switching materials. Through these efforts, Daikin aims to reduce its environmental impact and effectively use resources throughout the entire product lifecycle, contributing to the creation of a circular society.
Shin-Etsu Chemical recognizes the circular economy as a critical issue for companies to address. By effectively utilizing resources, the company aims not only to contribute to the global environment but also to enhance its competitiveness and achieve sustainable growth. In resource circulation, it collaborates with customers and related industry groups, using the latest technology to collect used products, extract resources, and reuse them in its group's products. This initiative helps reduce waste for both customers and the Shin-Etsu Chemical Group. Furthermore, reusing resources contributes to environmental conservation.
Hitachi's Connective Industries (CI) sector has a wide range of products for various industries and extensive experience and knowledge in recycling. In the Hitachi Group Management Plan "Inspire 2027," the circular economy is positioned at the core of future business. By leveraging digital technology, Hitachi aims to create new innovations in resource circulation and maintain the global environment*3. The Industrial Solutions Business Unit within Hitachi's CI sector is focusing on "HMAX Industry," a suite of next-generation solutions that combines data from the extensive installed base of products (digitized assets) with domain knowledge and advanced AI. By providing these core "Industrial Solutions," Hitachi aims to maximize customer lifetime value and transform industries globally, thereby realizing a prosperous society.
Tokyo Eco Recycle views used products as global resources. By ensuring that recovered resources are used efficiently and effectively, the company contributes to building a sustainable, circular society and achieving a carbon-neutral society together with its stakeholders.
*1 Demagnetization: The process of removing residual magnetism (magnetization) from magnets and magnetic components
*2 Resonant damping demagnetization technology: A method that applies an alternating magnetic field to a magnet (magnetic body) and gradually attenuates its amplitude while utilizing the resonance phenomenon of magnetization to ultimately demagnetize it
*3 Hitachi News Release, June 27, 2025 https://www.hitachi.co.jp/New/cnews/month/2025/06/0627.html
Background
With the "Home Appliance Recycling Law (Law for Recycling of Specified Kinds of Home Appliances)" enacted in 2001, the collection and recycling of home appliances have become an established system. However, for commercial equipment, there is no specific legal system or collection scheme in place.
In recent years, the movement to strengthen resource recycling has been accelerating globally to promote GX and realize a resource-circulating society. Amid this, in Japan, based on the "Act on the Promotion of Effective Utilization of Resources"*4 and the "Basic Policy for the Realization of GX"*5, moves to expand the recycling of rare earth magnets are accelerating.
Daikin focused on the rare earth magnets contained in commercial air conditioner compressors and, as a pioneer in the industry, proposed a concept for building a circular scheme for their recovery and recycling. Shin-Etsu Chemical, Hitachi, and Tokyo Eco Recycle, which possess related technologies and know-how, endorsed this, and this cross-industry collaboration began.
*4 Ministry of the Environment "Outline of the Act on the Promotion of Effective Utilization of Resources" https://www.env.go.jp/recycle/recycling/recyclable/gaiyo.html
*5 "Basic Policy for the Realization of GX ~Roadmap for the Next 10 Years~" https://www.cas.go.jp/jp/seisaku/gx_jikkou_kaigi/dai5/index.html
Daikin Industries, Ltd. (hereinafter, Daikin), a company in the air conditioning business; Shin-Etsu Chemical Co., Ltd. (hereinafter, Shin-Etsu Chemical), which manufactures and recycles rare earth magnets; Hitachi, Ltd. (hereinafter, Hitachi), which possesses technology for resource recovery and recycling; and Tokyo Eco Recycle Co., Ltd. (hereinafter, Tokyo Eco Recycle) have begun an industry-spanning collaboration (hereinafter, this collaboration) to establish Japan's first circular scheme (hereinafter, this scheme) for recovering and recycling rare earth magnets from Daikin's commercial air conditioner compressors that are replaced during repairs and overhauls in Japan. The process of disassembly, demagnetization*1, and removal of rare earth magnets will be automated and made more efficient by utilizing AI image recognition technology and robots. Traceability and optimization will be achieved by managing the data of the collection, disassembly, and quality assessment processes with an integrated system.
The four companies plan to proceed with the development of automated equipment and other technologies by 2026, with the full-scale operation of this scheme scheduled to begin in 2027.
About this scheme
Daikin will collect compressors from its own commercial air conditioners, and Tokyo Eco Recycle will handle the disassembly, demagnetization, and removal of the rare earth magnets. Based on technical information provided by Daikin, Tokyo Eco Recycle, together with Hitachi, will leverage its years of technology and know-how cultivated in recycling household compressors. They will also link AI image recognition technology with robots to improve the efficiency of the disassembly process, which differs for each model type. Furthermore, they will reduce the environmental impact by using resonant damping demagnetization technology*2, which does not directly generate CO2. Shin-Etsu Chemical will then manufacture new rare earth magnets using the extracted rare earth magnets as recycled material.
This scheme is an initiative to promote a circular economy and reduce the environmental impact on the supply chain through the recycling of rare earth magnets. In the future, the aim is to expand this into a new business model by creating partnerships with companies and organizations that share the vision of this collaboration, such as Hitachi Global Life Solutions, Inc., which is also in the commercial air conditioner business. This will contribute to the Green Transformation (GX) not only of the air conditioner industry but of the manufacturing industry as a whole.
Each company's initiatives related to the circular economy
Daikin is promoting initiatives for a circular economy as a key measure. The top priority is the recovery and recycling of refrigerants, which are essential for air conditioners, and the company is developing a system for stable circular use. It is also engaged in initiatives that consider resource circulation from the design and development stages, such as making products smaller and longer-lasting, reducing the materials used, and switching materials. Through these efforts, Daikin aims to reduce its environmental impact and effectively use resources throughout the entire product lifecycle, contributing to the creation of a circular society.
Shin-Etsu Chemical recognizes the circular economy as a critical issue for companies to address. By effectively utilizing resources, the company aims not only to contribute to the global environment but also to enhance its competitiveness and achieve sustainable growth. In resource circulation, it collaborates with customers and related industry groups, using the latest technology to collect used products, extract resources, and reuse them in its group's products. This initiative helps reduce waste for both customers and the Shin-Etsu Chemical Group. Furthermore, reusing resources contributes to environmental conservation.
Hitachi's Connective Industries (CI) sector has a wide range of products for various industries and extensive experience and knowledge in recycling. In the Hitachi Group Management Plan "Inspire 2027," the circular economy is positioned at the core of future business. By leveraging digital technology, Hitachi aims to create new innovations in resource circulation and maintain the global environment*3. The Industrial Solutions Business Unit within Hitachi's CI sector is focusing on "HMAX Industry," a suite of next-generation solutions that combines data from the extensive installed base of products (digitized assets) with domain knowledge and advanced AI. By providing these core "Industrial Solutions," Hitachi aims to maximize customer lifetime value and transform industries globally, thereby realizing a prosperous society.
Tokyo Eco Recycle views used products as global resources. By ensuring that recovered resources are used efficiently and effectively, the company contributes to building a sustainable, circular society and achieving a carbon-neutral society together with its stakeholders.
*1 Demagnetization: The process of removing residual magnetism (magnetization) from magnets and magnetic components
*2 Resonant damping demagnetization technology: A method that applies an alternating magnetic field to a magnet (magnetic body) and gradually attenuates its amplitude while utilizing the resonance phenomenon of magnetization to ultimately demagnetize it
*3 Hitachi News Release, June 27, 2025 https://www.hitachi.co.jp/New/cnews/month/2025/06/0627.html
Background
With the "Home Appliance Recycling Law (Law for Recycling of Specified Kinds of Home Appliances)" enacted in 2001, the collection and recycling of home appliances have become an established system. However, for commercial equipment, there is no specific legal system or collection scheme in place.
In recent years, the movement to strengthen resource recycling has been accelerating globally to promote GX and realize a resource-circulating society. Amid this, in Japan, based on the "Act on the Promotion of Effective Utilization of Resources"*4 and the "Basic Policy for the Realization of GX"*5, moves to expand the recycling of rare earth magnets are accelerating.
Daikin focused on the rare earth magnets contained in commercial air conditioner compressors and, as a pioneer in the industry, proposed a concept for building a circular scheme for their recovery and recycling. Shin-Etsu Chemical, Hitachi, and Tokyo Eco Recycle, which possess related technologies and know-how, endorsed this, and this cross-industry collaboration began.
*4 Ministry of the Environment "Outline of the Act on the Promotion of Effective Utilization of Resources" https://www.env.go.jp/recycle/recycling/recyclable/gaiyo.html
*5 "Basic Policy for the Realization of GX ~Roadmap for the Next 10 Years~" https://www.cas.go.jp/jp/seisaku/gx_jikkou_kaigi/dai5/index.html