Daikin Industries Co., Ltd. and Itochu Corporation announced on July 9, 2026 that they have signed a comprehensive business partnership agreement aimed at advancing resource circulation and expanding the closed-loop use of recycled materials in commercial air conditioning equipment.
As the transition to a circular economy accelerates, closed-loop (bottle-to-bottle style) recycling—whereby resources contained in end-of-life equipment are recovered and reused in new products—is becoming increasingly important in the commercial air conditioning sector. At the same time, stably incorporating recycled materials into products requires integrated management across the entire supply chain, including quality assessment and traceability. Establishing a system that covers everything from collection and material recovery through to product application and quality assurance had remained a key challenge.
The two companies will combine the Daikin Group’s product technology and quality assurance capabilities with the Itochu Group’s recycling expertise, networks, and data management capabilities. Together, they aim to drive an integrated approach—from the collection and material recovery of unwanted commercial air conditioners through to product application—with the goal of reducing environmental impact and building a sustainable supply chain.
The initiative comprises four key elements:
- Through collaboration between the two groups, all stages of the resource circulation process will be managed in an integrated manner: collection, dismantling, sorting, refrigerant recovery, quality assessment, material recovery, and product manufacturing.
- The range of reusable materials will be progressively expanded to include metals (iron, copper, aluminium, rare earths, etc.), plastics (exterior and interior resins, fans), electronic components, and fluorocarbons (HFCs/HCFCs).
- A comprehensive framework covering logistics, data management, regulatory compliance, and customer collaboration will be established, and official certification will be obtained.
- Nationwide rollout will proceed in stages, with business expansion carried out in compliance with regulatory and quality requirements.
The immediate priority is to implement the closed-loop recycling business in the domestic market and obtain the relevant legal certification, with a phased nationwide expansion planned as quality and regulatory requirements are met. Target models, volumes, quality standards, and recycled-content ratios will be agreed upon through individual contracts to enable rapid deployment.
According to certification status information published by the Ministry of the Environment, as of April 30, 2026, only two companies had received certification under Category 1 (Advanced Material Recovery Business) of the Act on the Advancement of Recycling and Other Resource Circulation Businesses (再資源化事業等高度化法, Japan’s law to promote higher-grade recycling operations): Ishizaka Sangyo Co., Ltd. and DINS Kansai Co., Ltd. Category 2 (Advanced Separation and Recovery Business) had been granted to just one company, Hamada Co., Ltd. The current partnership has not yet reached the certification stage.
In terms of the division of roles, the Daikin Group will be responsible for assessing the properties and performance of recycled materials, designing production processes, establishing and inspecting acceptance standards, leveraging its collection and maintenance network in collaboration with installation partners, ensuring a stable supply of recycled materials, and planning, selling, and promoting products that incorporate recycled materials.
The Itochu Corporation Group will be responsible for supporting the application for and renewal of Category 1 certification under the Act on the Advancement of Recycling and Other Resource Circulation Businesses, building a nationwide recycling network, arranging waste logistics and collection and transport, establishing a traceability system to manage the origin, processing steps, blending ratios, and compliance records of recycled materials, and building and operating a platform for calculating material recovery rates and CO₂ reduction volumes.
Daikin has previously promoted closed-loop recycling of copper, aluminium, and rare-earth magnets—alongside refrigerant recovery and reclamation—as a key strategic priority. In September 2025, the company announced efforts toward mass production of heat exchangers using recycled aluminium, and in April 2026 it announced the launch of a co-creation initiative for recycling rare-earth magnets from commercial air conditioner compressors.
Participating in this initiative from the Itochu Group are Itochu Metals Co., Ltd. (handling sales of Daikin refrigerated containers and supply of non-ferrous materials) and WingArc1st Inc. (providing “EcoNiPass,” a greenhouse gas emissions aggregation system). From the Daikin Group, participants include Daikin Sunrise Settsu Co., Ltd. (a special-purpose subsidiary responsible for dismantling and sorting end-of-life equipment), Daikin Air Techno Co., Ltd., Daikin Applied Systems Co., Ltd., and ten regional Daikin HVAC Solution companies across Japan.
【Press Release】Comprehensive Business Partnership Agreement Signed with Itochu Corporation for Closed-Loop Recycling of Commercial Air Conditioners
【Press Release】Comprehensive Business Partnership Agreement Signed with Daikin Industries Co., Ltd. for Closed-Loop Recycling of Commercial Air Conditioners
【Reference】Certification Status under the Act on the Advancement of Recycling and Other Resource Circulation Businesses
【Reference】Quick Guide: Certification System under the Act on the Advancement of Recycling and Other Resource Circulation Businesses
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