What are the Key Points for Expanding the Use of Recycled Materials in Manufacturing? - The Keys are "Value Creation of Recycled Materials" and "Requirement Implementation in Public Procurement"

Overview

This is a specific proposal by Ryunosuke Funahashi and Jiro Furuki of Mitsubishi Research Institute on how to expand the use of recycled materials in manufacturing, focusing on "value creation of recycled materials" through mixing with virgin materials and "requirement implementation in public procurement." ## Key Points ### 1. Current Status and Challenges of Recycled Material Use - **Success Story of Precious Metals**: - Waste products have higher content rates than ores - High market prices can sufficiently cover recycling costs - Resource recovery and recycling have expanded as business opportunities - **Challenges with Plastics and Others**: - Non-ferrous metals and plastics (excluding precious metals) have high recycling costs - Difficult to establish market value - Usage in manufacturing supply chains is not progressing - **Solution Direction**: Value creation of recycled materials through voluntary corporate initiatives is necessary ### 2. Value Creation Approach for Recycled Materials Through Virgin Material Mixing - **PP (Polypropylene) Case Analysis**: - Recycled PP price through chemical recycling: approximately 600 yen/kg - Virgin PP market price: approximately 200 yen/kg (about 1/3 of recycled PP) - When mixing 20% recycled PP with virgin PP: 280 yen/kg with expected demand of 221,000 tons - **Demand Function Creation**: - Extended data on willingness to pay and demand volume from survey research to domestic total demand - Demand volume increases significantly at willingness to pay of 200 yen/kg threshold - General-purpose PP products tend to have higher demand but lower willingness to pay - **Value Creation Effect**: While recycled material per product decreases, total demand increases due to higher sales volume ### 3. Virtuous Circle Mechanism for Supply and Demand Expansion - **Success Story of Biomass Materials**: - Biomass ink for printing on seasoning bottles - Acceptable even at high prices due to small proportion in final product price - Key point is reducing the monetary proportion of recycled materials in product cost - **Virtuous Circle Creation Process**: 1. Initial demand creation 2. Recycling cost reduction through supply scale expansion 3. Lower pricing of recycled materials 4. Further demand expansion - **Quantitative Effect**: Expected 115,000 tons demand expansion with 40 yen/kg price reduction for chemically recycled PP mixed products ### 4. Initial Demand Creation and Virtuous Circle Acceleration Through Public Procurement - **Initial Demand Shortage Problem**: - Even mixed products with virgin materials are more expensive than virgin materials alone - Applications are limited in early stages - Virtuous circle cannot accelerate without substantial demand - **Need for Government Involvement**: - Proactive utilization in public procurement is key - Promoting through both wheels of "value creation of recycled materials" and "requirement implementation in public procurement" - Creating virtuous circle of supply and demand expansion through substantial initial demand creation - **Path to Realization**: Integrated efforts by manufacturing businesses (arterial industries) and the government are important This analysis presents specific methodologies for expanding recycled material use and shows a feasible path through the combination of voluntary private sector initiatives and public support.