Environmental Impact of Mining Scarce Resources Associated with Product Electrification

Our lives involve production, consumption, and disposal, relying on various resources. Driven by global
population growth and economic development, the demand for resources continues to rise, and extensive
resource extraction has become a societal issue. This is because, in addition to consuming limited resources
in large quantities, resource extraction entails energy consumption, CO₂ emissions, and land alteration,
resulting in environmental impacts that depend on and affect natural capital.

Electrification of products is an effective means of reducing CO₂ emissions during product use.
However, compared to traditional internal combustion engine vehicles, electric vehicles use larger
amounts of scarce resources such as copper, nickel, cobalt, lithium, and rare earth elements.

The extraction of scarce resources involves substantial energy consumption and significant CO₂
emissions. Therefore, it is crucial to focus on efficient resource use (referred to as resource circulation) that
enables low-energy and sustainable recycling.

Currently, approximately 90% of the resources used in new car manufacturing rely on newly mined
materials. Although about 70% of the resources from dismantled vehicles are recycled and reused, they are
often cascaded to other industries, with the remaining 30% either incinerated for heat recovery or
landfilled. The high-quality requirements for automotive materials make the use of recycled materials
costly. Moreover, advancing the electrification of products increases the demand for scarce resources,
leading to potential risks of rising resource prices and supply shortages, which could affect the availability
of products and services. Therefore, it is essential to implement resource circulation with economic
feasibility to make recycled materials more viable.

In a traditional “take-make-dispose” business model, the recycling process is not included in the supply
chain. We are working to go beyond the conventional business model and achieve resource circulation by
collaborating with relevant industries. Alongside our efforts towards carbon neutrality, we are addressing
societal challenges related to resource utilization, striving to continuously provide the “joy and freedom of
mobility” through our mobility solutions.

• Traditional Material Flow

  

• Ideal Circular Material Flow

  

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Achieving Horizontal Recycling by Maximizing the Use of End-of-Life Products

Honda aims to achieve resource circulation through horizontal recycling, which maximizes the use of
end-of-life vehicles (ELVs). This approach requires the development of a new “circular value chain.” To build
this value chain, Honda is working to acquire capabilities beyond its current corporate activities. The
insights and technologies gained from this effort are expected to support new businesses and products
designed with a circular economy in mind, as well as the innovative technologies to achieve them.
Consequently, we focus on transforming our business from a mass consumption model to a circular one.

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Creating Economic Viability in Resource Circulation

Fully utilizing the value of products and parts during their lifecycle and highly efficient recycling of used
products while ensuring economic viability throughout a product are both vitally important for resource circulation.

To fully utilize the value of products and components, we will focus on reusing and repurposing them.
We will also utilize data to "visualize value" throughout the product lifecycle, facilitating regulatory compliance, proper transactions of products and components, and promoting their effective use.

To efficiently recycle used products, it is crucial to incorporate "circular-oriented materials and design" into the products. For the products currently under development, we are advancing the replacement of materials with those designed for circularity, integrating material types, and adapting material specifications and manufacturing methods to accommodate the use of recycled materials.
Additionally, we are working on designs that facilitate easy disassembly of end-of-life vehicles (ELVs) and transforming components made of multiple materials into structures that allow for easy separation into single materials, avoiding the inclusion of contaminants during the recycling process.

In addition to incorporating these strategies into product design, we will also focus on expanding future horizontal recycling efforts. To achieve both environmental sustainability and economic viability, we are working with our partners to develop advanced recycling technologies,
including those for dismantling, shredding, sorting, and reprocessing materials.

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Five Key Principles of Resource Circulation

Resource Circulation Concept Diagram

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Environment Initiatives

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  Carbon Neutrality and
  Clean Energy

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  Resource Circulation

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  Biodiversity Conservation

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