Japan’s Circular Economy Gains Momentum as REFINVERSE Group Advances New Recycling Technologies

Japan is widely regarded as a global leader in recycling, supported by its commitment to the SDGs and its goal of achieving carbon neutrality by 2050. However, the country has also faced some criticism—fair or not—regarding the lack of a cohesive framework and limited collaboration between government and industry. As the president of a company that plays a key role in bridging these gaps and advancing recycling technologies, how do you assess the current state of Japan’s recycling sector? What do you see as the main challenges that must be addressed to drive further improvement?

Japan’s recycling sector is still in a very primitive stage. At REFINVERSE Group, we focus on industrial waste, which we recycle and transform into new materials. Currently, much of the industry’s attention is centered on how to utilize industrial waste more effectively. However, the broader framework guiding Japan’s waste management practices dates back to the 1960s and 1970s, when the primary concerns were reducing industrial pollution and preventing illegal dumping. Today’s recycling infrastructure was built on that outdated understanding.

Attempting to promote a modern recycling system within this old framework presents serious limitations. It’s inefficient and, in some cases, even contradictory to current local regulations. There’s a structural mismatch between the historical purpose of waste management—which was primarily about safe disposal—and the emerging goal of recycling: to transform waste into valuable new materials. These two objectives require entirely different approaches, and the system needs to evolve to reflect that shift.

Since the Kyoto Protocol in 1997 and the Circular Economy Promotion Act in the early 2000s, there has been a gradual push toward reform. But even though it’s been over 25 years since these policies were introduced, I believe we are still only at the beginning of a new era.

To put it into perspective, it took over 300 years—beginning with the Industrial Revolution—to fully build the linear economy based on fossil fuel consumption and mass production. Transitioning to a circular economy represents a fundamental shift that will require significant social reform, and it cannot happen overnight. In this context, the progress we’ve made in the last two decades is still very much part of the early stages.

Naturally, with such a slow-moving transformation, there have been both fair and unfair criticisms, as you noted. Regulatory rigidity and a lack of communication between administrative bodies remain major challenges that need to be addressed.

When I started this business 25 years ago, I genuinely believed Japan had a competitive edge in the recycling and circular economy space. One reason is the population density in Tokyo and other major urban centers, which means waste is concentrated and can be collected efficiently. Another is Japan’s strict regulations around waste processing. These laws ensure that most waste is handled properly, and illegal dumping is relatively rare. Japan is also a very clean country, with minimal visible waste in public spaces. This disciplined approach to waste management gives Japan a solid foundation upon which to build a more advanced recycling industry.

Japan reports an impressive 87% plastic recycling rate. However, 62% of that is attributed to thermal recycling, which—while it reduces landfill use—still contributes to carbon emissions. In contrast, chemical recycling accounts for only about 25% of the total. How is your company working to innovate and drive the shift toward more sustainable materials and chemical recycling methods? And what challenges do you anticipate in accelerating this transition?

We believe that plastic recycling and waste processing must ultimately operate based on market principles—and right now, we’re working to shift the flow of how that system functions. When we process waste, recycling it into new materials creates greater economic value. That’s the foundation of our company’s philosophy.

Of course, there’s value in appealing to the moral or emotional side of recycling to encourage individual behavioral change. But in reality, that approach only motivates a limited segment of society. If we want to change behavior on a broad scale—especially within the business world—we need to create economic incentives. Profitability is the engine that drives true societal change. That’s why we focus on developing technologies that maximize economic return and build our business models around those innovations. By doing so, we demonstrate the tangible advantages of recycling and recycled materials, making the case not just for sustainability, but for sound business.

As for thermal recycling in Japan, we believe it’s important to stop referring to it as “recycling.” The term itself creates a misconception—both for individuals and companies—that burning waste for energy is equivalent to recycling. This misperception hinders progress and keeps Japan from evolving its approach to waste management.

Chemical recycling in Japan still has a long way to go, but we are taking concrete steps to advance it. We’ve been working in collaboration with Mitsubishi Chemical to launch one of Japan’s first chemical recycling initiatives. This project, set to begin later this year, will take plastic waste that was previously used in thermal recycling and instead process it through chemical recycling methods. This partnership marks a significant step forward for Japan’s circular economy and represents a practical shift toward more sustainable, closed-loop systems.

Refinverse Innovation Center (RIVIC)

You just spoke about your business model. In our conversations with other companies, many have emphasized the growing importance of internationalization—especially in light of Japan’s demographic challenges. With the population projected to fall below 100 million by 2050 and a 12% decline in the labor force expected by 2040, global expansion is becoming essential. Your company has clearly embraced this mindset. For example, you’ve licensed your airbag recycling technology to Toyota Tsusho in Vietnam, and in June 2023, you granted a license for fishing net recycling to South Korea’s RMO. We also understand that you’re currently exploring additional licensing opportunities abroad. Could you tell us more about these international efforts, and which countries or regions you see as offering the most promising opportunities for licensing and strategic partnerships?

We certainly recognize the serious demographic challenges facing Japan. However, this is not a uniquely Japanese issue—it’s a structural problem shared by many developed countries around the world. So, rather than framing it as a Japan-specific crisis, we see it as an industry-wide issue that demands a more global perspective.

Japan’s shrinking population will, inevitably, lead to a contracting domestic economy, and that will affect businesses like ours. But our strategy is rooted in creating value from what already exists—transforming industrial waste into reusable materials. Traditionally, Japan’s economic model relied on importing raw materials, processing them domestically, and then selling finished products either at home or abroad. We believe that model can and should evolve. By producing raw materials domestically—through recycling—we can reduce dependence on imports and retain more economic value within Japan. In this sense, the circular economy isn’t just about sustainability—it’s also a strategy for building national wealth.

When we look at the global landscape, we see potential everywhere. In the linear economy, success has historically been based on scale—large capital investments, mass production, and the ability to reduce unit costs. But that model doesn’t translate well to the circular economy, which thrives on smaller, decentralized systems that focus on converting local waste into valuable materials.

In a circular economy framework, success is not about size, but about adaptability and resourcefulness. Smaller investments—paired with localized waste processing—can create meaningful value. That’s why developing countries and smaller regions can play a leading role in this space. Unlike in a linear system, they don’t need massive capital to be successful. What they need are scalable recycling technologies and efficient processes that turn local waste into usable resources.

This is the foundation of our international strategy. We are continuously conducting R&D for new recycling technologies and designing modular recycling processes that can be deployed globally. Our recycling plant investments range from USD 1 million to USD 10 million—much smaller than traditional industrial-scale facilities. These modest investment requirements mean we don’t have to rely solely on large, capital-rich nations. Instead, we can work with smaller countries and regions, helping them develop their own circular economies by turning their waste into opportunity.

Are there any specific countries where you're currently seeing strong traction or success with your international initiatives?

We’re still a relatively small company, so our resources are limited, and our current initiatives aren’t on a large scale. However, we are making progress. One example is our collaboration with Toyota Tsusho in Vietnam, where we’re working on a project to recycle automobile airbags. It’s a focused effort, but an important step forward in applying our technologies internationally.

What types of partnerships are you looking to build in order to support your future expansion? Are there specific sectors, regions, or capabilities that you're particularly interested in?

As we expand into other countries, our primary strategy will be to license our technology. That’s the fundamental approach we plan to take for our international growth moving forward.

Your company, based in Tokyo, is recognized as a leader in Japan’s circular economy. Your vision is grounded in two key concepts: first, the idea that "Tokyo is an oil field," and second, the mission to "transform waste into wealth." Could you elaborate on these two concepts and how they shape your long-term vision? Additionally, how do you envision your company evolving in the near future?

Tokyo is a region where the population is highly concentrated, and waste processing is strictly regulated. Because of this, waste in Tokyo is thoroughly managed and systematically distributed. Additionally, Japan has a deeply rooted cultural value known as the mottainai spirit—an awareness of not being wasteful and a belief in the importance of properly handling what we throw away.

If we can shift people’s mindset to view waste not as garbage, but as a resource, then Tokyo becomes one of the most efficient places in the world to tap into those resources. That’s why I began to see Tokyo as an oil field—similar to how oil-rich countries in the Middle East have vast natural resources underground, Tokyo has an abundance of potential in the form of reusable materials. This image of Tokyo as a modern-day oil field is what inspired me when I started the company.

Your company has developed proprietary technologies that are now licensed to companies like Toyota Tsusho and others. For our readers, could you explain what sets your company apart? What makes your approach different from competitors, and why should other companies consider adopting your technology?

As you know, Toyota Tsusho is part of the Toyota Group, and our main point of contact with them has been their airbag development team. One of the challenges they faced was how to effectively recycle automobile airbags—a complex issue given the materials involved. While exploring potential partners, they evaluated many companies besides ours. Ultimately, they chose us for two key reasons.

First, our business is already profitable. That gave them confidence in the sustainability of our model. Second—and perhaps more importantly—they were drawn to how we achieve profitability. Many companies in the recycling sector struggle with cost-efficiency; often, improving the quality of recycled materials requires significant capital investment. But what sets us apart is the simplicity of our process. We’re able to maintain high material quality without large-scale investment, making our recycling model both economically and operationally efficient.

That combination of cost-effectiveness and technical performance is what differentiates us from our competitors and makes our technology an attractive option for companies like Toyota Tsusho.

You’ve already licensed your technology to Toyota Tsusho in Vietnam. Looking ahead, which countries do you believe hold the greatest potential for your technology to contribute to local development and help generate economic value?

Our priority is to build recycling plants in locations where waste can be efficiently collected. That’s the most critical factor in determining where our technology can deliver real value. For example, in the case of airbags, the ideal scenario would be to establish a plant near an existing airbag manufacturing facility. This would allow us to streamline collection and processing, making the entire operation more cost-effective and efficient.

So, our first step is to identify regions where industrial waste from factories is concentrated, and then establish the foundation for a recycling plant in that area. From there, we would look to expand—starting, for instance, with airbags used in vehicles, which could be collected directly from production sites. Once that infrastructure is in place, we can gradually broaden our operations and scale up.

As you look to the future, is your company also aiming to diversify its technology to recycle materials beyond airbags? If so, could you share more details with our readers about the types of materials or sectors you’re exploring?

In the automotive sector, we’re currently in the final stages of R&D for recycling interior materials. Beyond that, we’re also conducting research into how we can recycle automobile glass components, and we’ve begun R&D efforts focused on rubber materials, including tires. While airbags are our current area of focus, our long-term goal is to eventually cover all major components of a vehicle.

When it comes to promoting industrial waste recycling and turning that waste into usable material, a key factor is logistical efficiency. Relying on the collection of just one type of waste—like airbags—is not ideal from a distribution standpoint. However, if we can collect multiple waste streams from vehicles—interior parts, glass, tires, and other rubber materials—we can consolidate them into a single transport operation. That would significantly improve logistical efficiency and enhance the overall economics of our recycling model.

This is why we’re actively investing in R&D across various materials. Our aim is to build an integrated system that makes recycling not only technologically feasible, but also commercially scalable and operationally efficient.

Approximately 90% of bioplastics—such as PLA and PBS—require industrial composting conditions, typically at temperatures between 55 and 70 degrees Celsius. This limitation creates concerns around microplastic pollution, as these materials don’t readily break down in natural environments. Your product, ReFEZER, addresses this issue by using upcycled chicken feathers to develop a keratin-based bioplastic that biodegrades naturally in both soil and water. Could you explain to our readers how you overcame the technical and environmental challenges involved in making a material that is both biodegradable and circular? Additionally, what makes ReFEZER stand out from other bioplastic solutions currently available on the market?

When it comes to the issue of microplastics and biodegradable plastics more broadly, the first major challenge is cost. Currently, biodegradable plastics tend to be expensive, and only a limited number of users are willing or able to pay that premium. Our use of upcycled chicken feathers is one approach to addressing this cost issue. However, ReFEZER is still under development, and we continue to face the challenge of achieving the right balance between cost-efficiency and material performance. Our goal is to make it competitive with conventional plastics, both economically and functionally.

Replacing traditional plastics entirely comes with many technical hurdles, so we’re also exploring entirely new applications for ReFEZER—particularly in marine environments, which are under increasing stress from climate change and environmental degradation.

One of our long-term ideas is to use ReFEZER to help restore ocean ecosystems. For example, in Japanese waters, nutrient levels are declining, which has led to a reduction in seaweed and other marine plant life. This ecological shift disrupts both biodiversity and carbon absorption. If we could help reverse that trend, we believe it could address two critical issues: first, more seaweed and aquatic plants would support larger fish populations, and second, increased plant growth would enhance CO₂ absorption, contributing to blue carbon efforts.

Our vision is to create a kind of fertilizer for the ocean. Just as land-based fertilizers use nitrogen drawn from the atmosphere to promote plant growth, we want to do something similar underwater. That’s the foundation of our current hypothesis.

ReFEZER is made from keratin, a protein that naturally contains high levels of nitrogen. If introduced into marine environments, it would biodegrade gradually, releasing nutrients and functioning as a natural fertilizer for seaweed and marine plants. We believe this approach could be an innovative solution to supporting ocean health and combating climate change.

To explore and validate this idea, we recognize the need to collaborate closely with municipal governments and local companies situated near coastal areas. This kind of partnership will be key to moving forward with testing and implementation.

REAMIDE recycled from fishing nets

Looking ahead ten years, where would you like to see REFINVERSE Group as a company? And from your perspective as CEO, what accomplishments would you most like to have achieved by that time?

Our current focus is on building a circular platform—a system that connects companies and organizations struggling with waste processing to those seeking to create products using sustainable materials. Over the next ten years, our goal is to significantly scale up the number of transactions taking place on this platform.

Specifically, we’re aiming for 10 million tons of material flow through this circular system. That number isn’t arbitrary—it represents approximately 3% of Japan’s total waste output and is roughly equivalent to the amount of oil Japan imports annually.

It’s certainly an ambitious goal, but one that reflects our core mission: to transform 10 million tons of waste into wealth. That’s the future I envision for REFINVERSE, and the achievement I would be most proud of as CEO over the next decade.

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To read more about REFINVERSE Group, check out this article about them.