Global Site
Displaying present location in the site.
Building an Advanced Aluminum Circular Economy with ICT
Vol.18 No.1 May 2025 Special Issue on Green Transformation — The NEC Group’s Environmental InitiativesAs international efforts to build a sustainable society gain momentum, the aluminum industry is actively pursuing initiatives to enhance quality, preserve essential material properties, and explore advanced recycling methods to achieve decarbonization. Realizing a circular economy requires close collaboration among industry stakeholders to create optimized supply and value chains. To support this transition, NEC is leveraging ICT solutions to improve coordination among these participants and drive the development of new industrial systems that maximize the overall value within a circular economy.
1. Introduction
The structure surrounding material recycling is changing significantly with the need for a more accurate understanding of the types and content ratios of the elements that make up recycled materials, combined with the need to comply with various regulations in Europe and elsewhere regarding the international distribution of resources, as opposed to the traditional method of collecting materials by product type, such as recycling aluminum cans.
In order to create a sophisticated recycling system that will change the entire industrial structure, new initiatives based on scientific knowledge and technology are in demand. Some of the elements that will be key to these efforts are beginning to fall into place, and opportunities for concrete discussions are also being created.
This paper examines the issues and solutions in the aluminum industry and how to create an environment where the impact of addressing the issues can be confirmed in advance while at the same time enabling consideration of the benefits and costs.
2. Expansion of the Circular Economy and the Aluminum Industry's Response
The recycling of aluminum beverage cans has increased since the introduction of the Recycling Mark in 1997 with the implementation of the Container and Packaging Recycling Law. By 2023, the utilization rate of recycled materials reached 97.5%, and the closed-loop recycling rate from CAN to CAN reached 73.8%.1) What makes aluminum cans suitable for recycling is the fact that their components and characteristics are constant, and they are easy to sort and collect. However, aluminum products contain alloying elements such as silicon (Si), magnesium (Mg), and zinc (Zn) to enhance strength and other specific properties. The suitability of recycled aluminum for various applications depends on the types and concentrations of these elements. For this reason, when closed-loop recycling is not feasible, aluminum is often repurposed through a cascading recycling model. In this model, materials with lower alloy content are reused in applications that tolerate higher impurity levels, progressing from wrought to cast or die-cast materials as specified by regulations. Japan ceased domestic production of primary aluminum ingots from bauxite after the oil crisis in the 1970s, resulting in no new aluminum being produced from raw materials. Compared to imported primary aluminum, secondary aluminum (recycled ingots) achieves a 97% reduction in CO2 emissions, with primary aluminum having a carbon footprint of 9.24 kg-CO2/kg, compared to 0.309 kg-CO2/kg2) for recycled aluminum. With increasing emphasis on decarbonization, expanding the domestic circulation of recycled aluminum materials is a high priority.
As part of the COI-NEXT program, a co-creation initiative led by the Japan Science and Technology Agency (JST), the Toyama Circular Economy Model Creation Project was selected for full-scale implementation in fiscal year 2024. Led by the University of Toyama, this project focuses on promoting aluminum utilization, including upgrade recycling, which enhances material quality by removing unwanted elements.3) As a member of this project, NEC is contributing to this initiative by employing information and communication technology (ICT) to support digital transformation (DX).
Expanding domestic recycling systems, particularly through upgrade recycling, presents significant challenges. Success will require collaborative efforts to increase material value through data sharing among universities and research institutions, as well as partnerships among aluminum industry stakeholders to build optimized supply and value chains.
Unlike conventional approaches, such as the 3Rs (Reduce, Reuse, Recycle), the circular economy model offers the advantage that all participants work together to enhance the value of the entire system. By engaging in a circular economy, companies can leverage their expertise and innovations, improve the broader circular ecosystem, and ultimately expand their business opportunities (Fig. 1).


The background behind this change in structure is the advancement of various related technologies. This change gained significant momentum after the European Commission (EC)—the executive body of the European Union (EU)—introduced the EU Circular Economy Action Plan in 2015.4) With the development of science and technology, the mechanisms for sharing information visualized by ICT and the AI technology necessary for analysis have become a reality establishing the conditions for advancing specific studies. On the other hand, as these international initiatives progress, there is a risk that the balance between supply and demand for resources will collapse, leading to significant fluctuations in resource prices, destabilizing distribution volumes, and accelerating the race to secure resources.
The Digital Product Passport (DPP) defined by the EU Eco-Design for Sustainable Products Regulation (ESPR) requires that quality-related information for the target items be recorded and shared in detail to improve traceability. In addition, the EU's Carbon Border Adjustment Mechanism (CBAM) limits CO2 emissions during the production of certain raw materials, and it is expected that the demand for securing high-quality materials and decarbonization will increase under the premise of expanding the circular economy. In the automotive industry, where the use of aluminum products is expected to increase, it is necessary to be constantly aware of these European trends.
In Japan, discussions and standardization efforts related to the transition to a circular economy are progressing in coordination with ISO/TC 323, a technical committee of the International Organization of Standardization (ISO) that aims to standardize the field of circular economy for the entire world.5) In the future, it will be essential to establish a certification system based on evaluation criteria. In expanding the use of recycled aluminum, quality certification is an important key, but developing regulations for cheap products that do not have quality certification and expanding the permissible range of composition by relaxing and subdividing standards, etc., will effectively support the revitalization of the circular economy. We believe that optimizing these regulations and standards will reduce the uncertainty caused by the transformation of the economic structure and contribute to improving Japan's international competitiveness.
3. Characteristics of NEC's Initiatives
Currently, numerous initiatives are underway globally to enhance data collaboration within and across industries. In Europe, a data space framework is being developed across multiple sectors, based on GAIA-X, a digital architecture created through industry-academia collaboration to support Industry 5.0, also called the Fifth Industrial Revolution. This framework facilitates data sharing among multiple companies and incorporates mechanisms to ensure trust and traceability, aligned with the concept of data sovereignty as defined by the General Data Protection Regulation (GDPR), which protects the rights of data owners. Digital Product Passport (DPP)-related data is also shared through this framework.
In Japan, NEC has been selected to develop the Japanese version of the DPP as part of Phase 3 of the Strategic Innovation Promotion Program (SIP3) led by the Cabinet Office. In addition to designing a data space, NEC is working on initiatives to create new value through the circulation and use of data critical to quality assurance, decarbonization and environmental management. As data sharing requires the protection of confidential corporate information, proprietary technologies and know-how, NEC is actively focusing on enhancing trust-related functions in its solutions. Data sharing spans collaborative and competitive domains, requiring companies to make strategic decisions such as which data to share, focusing on market activation through overall optimization, or pursuing their unique value proposition to expand specific markets. As traditional linear supply and value chains transition to circular models, companies have the opportunity to maximize their value contribution throughout the cycle. Addressing the challenges within this circular cycle can strengthen a company's growth prospects. In advancing aluminum recycling, NEC is exploring the application of optimization AI6)7) to enhance process efficiency and improve material quality and properties. In the future, data obtained at each stage of the recycling process, including information to ensure material and product quality, is expected to be shared through the Japanese version of the DPP, contributing to overall value enhancement.
Integrating advanced technologies into the circular economy not only improves efficiency, but also attracts talent eager to work in the field. As the public and private sectors work together to upgrade industrial structures and expand related businesses, it will be necessary to create opportunities for people to draw on a wide range of knowledge, whether in the sciences, humanities, or the arts. In line with this, we expect to see an increase in active participation in data sharing in the circular economy.
For example, a deep understanding of a material's properties and origins can inspire new ideas in art and culture. Products supported by reliable, verifiable information, and structures that incorporate such materials, have a unique character that forms the basis for creating new narratives. We believe that expanding the environment in which new ideas can be born by effectively using mechanisms that support co-creation and linking the knowledge of different disciplines will lead to the future development of the regional economy. To effectively use the circular economy as a platform to promote and monetize new value created through co-creation, it is essential to establish systems that ensure the reliability of shared information and evaluate individual contributions. Mechanisms must be in place to fairly distribute the benefits generated through co-creation to those who contribute value. In practice, it can be challenging to quantify the full impact of specific initiatives amidst market fluctuations. Therefore, companies must make predictions and decisions based on data correlations within and beyond the circular economy in which they participate. However, even here, we believe that uncertainty can be reduced by utilizing a co-creative marketing structure (Fig. 2) in which multiple companies work together. NEC is also considering the application of AI-based correlation analysis and causal analysis technology to the field of marketing8) and the promotion of behavioral change.


4. Future Technological Applications
The integration of data spaces within the circular economy becomes a system that supports continuous optimization. This transformation is being driven by simulations using digital twins, a technical concept that digitally replicates the structure and dynamics of physical spaces using data, real-time data acquisition, and advanced analytics to ensure consistent and accurate feedback. As the ability to effectively use data from equipment involved in manufacturing and disassembly grows, improvements in quality and reliability become more attainable. At the same time, the range of applications for NEC's AI, secure computing,9)10)11) and other ICT solutions is expected to expand.
When implementing new equipment or technology, organizations can reduce costs by assessing the effectiveness of the implementation, conducting risk assessments, and designing scalable structures that allow for easy upgrades in functionality —all while considering the entire circular cycle. Data collected from real-world production facilities will help identify new challenges in achieving overall optimization, while opening up opportunities for process improvement by considering both upstream and downstream operations.
Products with high environmental value and recyclability can also be designed using AI. For example, it is possible to investigate the impact of reprioritizing certain elements while aiming for overall optimization through eco-design, or to effectively increase the value and superiority of a product by simultaneously optimizing responses to decarbonization. Data that is verifiably obtained from a specific source and by a specific method will enable a more precise demonstration of the value of the product. We believe that there will also be an increase in the number of companies considering the structure of data utilization in advance with the goal of using the collected and aggregated data in corporate environmental management reports, etc. (Fig. 3).


The emergence of these new elemental technologies is expected to accelerate problem solving through co-creation and the refinement and expansion of collaboration through the implementation of co-creation services in real-world environments. We believe that preparing a data sharing platform that can respond to future changes in societal demands will lead to greater sustainability for companies and organizations.
5. Conclusion
In addition to promoting quality assurance and decarbonization measures in Europe and other regions, we also need to promote these measures as a way to revitalize domestic economies, especially regional economies that are facing the challenge of declining populations. At the same time, we will also need to consider the promotion and development of industries that take into account the increasingly data-driven economic environment in the global economy. In the materials sector, in particular, we will need to ensure the domestic distribution volume of each material, which is the basis of economic security, while maintaining the smooth flow of international trade and striving to expand trade that involves value-added transactions.
Achieving these objectives requires cross-industry data collaboration and analysis to generate value that goes beyond traditional boundaries. ICT plays a vital role by analyzing challenges, facilitating improvements, and providing structural support for comprehensive solutions. NEC is dedicated to combing advanced technologies with flexible applications to accelerate social implementation, striving to establish an industrial framework that allows all companies engaged in the circular economy to collectively enhance value.
References
- 1)
- 2)
- 3)
- 4)
- 5)
- 6)
- 7)
- 8)
- 9)
- 10)
- 11)
Authors’ Profiles
Professional
GX Business Development Department
Senior Professional
GX Business Development Department