Japan's air conditioning major Daikin Industries and three other firms will jointly launch an initiative to recover and recycle rare earth magnets from compressors used in commercial air conditioners, the companies said on 14 April.
Daikin, Japanese chemical firm Shin-Etsu Chemical, manufacturer Hitachi, and recycling firm Tokyo Eco Recycle plan to develop automated equipment in 2026 and start full-scale operations in 2027. The initiative aims to reduce environmental impact across the circular economy and supply chains through rare earth magnet recycling, Daikin said.
Daikin aims to collect around 10,000 compressors a year and eventually recycle several tonnes of rare earth magnets annually, the company said.
Compressors are a core component of air conditioners. They compress and circulate refrigerant. Their internal motors use rare earth magnets such as neodymium. Daikin launched the initiative because no established recycling framework existed in Japan for rare earth magnets contained in compressors for commercial air conditioners.
Under the scheme, Daikin will collect compressors, while Tokyo Eco Recycle, in collaboration with Hitachi, will extract the rare earth magnets. Shin-Etsu Chemical will use the recovered magnets as raw materials to produce new rare earth magnets. The entire process from collection to remanufacturing will be managed through a centralised data system. The companies will also improve recovery efficiency by automating operations, while optimising disassembly processes for different models using AI-based image recognition and robotics.
Rare earth magnets are essential materials used in air conditioners and electric vehicles. Much of the global supply is concentrated in China, making supply chain resilience a key challenge. Japan's environment ministry has allocated about ¥37.9bn ($238mn) in its fiscal 2026 budget to promote recycling of metal resources such as rare metals and rare earths.
Domestic recycling of critical minerals such as rare earths contributes not only to environmental protection but also to reducing dependence on specific countries and stabilising supply chains, making it highly significant from an economic security perspective, an environment ministry official said.
