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Circular Economy in Japan: laws, trends & case studies

Circular Economy starts with a simple idea: materials should never become waste. Instead of the “take-make-waste” conveyor belt that drives today’s linear economy, a circular economy keeps products, components and raw materials cycling for as long as possible. By looping resources back into production, circular economy decouples growth from extraction, and lowers carbon and pollution footprints.

In recent years, Japan has been actively promoting circular economy, leading many exciting changes! The country has been laying the legal groundwork for more than two decades. The Basic Act for Establishing a Sound Material-Cycle Society obliged companies to design durable, repairable goods and prioritise recycling. The 2026 Environment White Paper emphasises the relationship between resource circulation, economic security, and industrial competitiveness..

Why does this matter? Because Japan, like much of the world, still leans on a linear system that mines finite resources, mass-produces short-lived goods and discards them after a single use. Moving to a circular model challenges the irresponsible and wasteful nature of how we manufacture and consume. We can reduce waste, curb resource volatility for businesses and unlock new value streams in remanufacturing, sharing platforms and secondary raw-material markets. We are choosing a better way forward.

Table of contents

Circular Economy trends and milestones in Japan

There is a lot of recent buzz and trends around circular economy, though we see a steady increase in awareness of circular economy in Japan from 2018. Google Trends shows that Circular Economy has sustained interest in Japan.

Japan’s interest in Circular Economy has doubled compared to five years ago, with tripled search volume compared to pre-2022 period. (Image via Google Trends)

5th Basic Environmental Plan (2018)

Approved by the Cabinet in April 2018, the 5th Basic Environmental Plan introduces the concept of a “Circular and Ecological Economy.” This concept focuses on regional resource utilisation and addresses complex environmental, economic, and social issues through integrated solutions. The direction taken was towards creating sustainable regions by energising rural areas and building a sustainable society based on circulation and symbiosis, aligning with the United Nations Sustainable Development Goals (SDGs)​. It focused on the formation of self-reliant, decentralised societies that maximise the use of regional resources, emphasised on local production for local consumption, and sought to introduce renewable energy sources.

Circular Economy Vision 2020

The Circular Economy Vision 2020, developed by the Ministry of Economy, Trade and Industry (METI), serves as a comprehensive roadmap for Japan’s transition to a circular economy. This vision aims to create sustainable business models that enhance resource efficiency and promote the reuse and recycling of materials. The vision sets a framework for industries to follow, driving innovation and fostering collaboration between public and private sectors to achieve a more sustainable economic system. Industries are encouraged to shift from linear to circular business models. To do so, there is a need to improve resource efficiency across various sectors, and support the development of new technologies and systems for resource recycling.

Plastic Resource Circulation Act (2022)

Enacted in April 2022, the Plastic Resource Circulation Act aims to address Japan’s significant plastic waste issue by reducing plastic waste through comprehensive management. This includes measures from the production stage to the recycling and disposal of plastic products. The act includes the introduction of plastic bag charges, regulations for manufacturers to ensure better recyclability of plastic products, and the promotion of technologies and systems for plastic recycling.

Partnership with the World Economic Forum

Japan has partnered with the World Economic Forum (WEF) to promote circular economy initiatives. This collaboration aims to identify key focus areas, address barriers, and outline next steps for transitioning to a circular economy. It includes the facilitation of public-private sector dialogue to drive circular economy strategies, development of policies and practices to accelerate sustainable finance, and a focus on high-impact areas such as plastics and electronics.

Carbon Neutrality by 2050

Japan has announced its commitment to achieving carbon neutrality by 2050. This ambitious goal is part of its broader circular economy initiatives and aligns with global efforts to combat climate change. Achieving carbon neutrality will significantly contribute to global climate goals and enhance Japan’s sustainability efforts. The strategies to achieve carbon neutrality include the reduction of greenhouse gas emissions across various sectors, promotion of renewable energy and energy efficiency, and encouragement of sustainable practices in industries and communities.

Concepts related to the Circular Economy

Very often, we hear similar ideas that make references to Circular Economy, because these ideas are often similar or even conisdered essential parts of the Circular Economy. Here are some of the terms that you may have heard before.

Biomimicry

Biomimicry involves imitating natural processes and systems to solve human challenges, thus promoting sustainability by reducing resource consumption and environmental impact through innovative, nature-inspired solutions​. This concept is applied in areas like design and engineering to create sustainable solutions by learning from nature’s time-tested patterns and strategies.

Our personal favorite is how waste does not exist in nature but everything is reused, and how ecosystems are regenerative. The “‘Return to the soil’ circular sensor“ took the idea quite literally, with Osaka University’s Institute of Scientific and Industrial Research developing IoT sensor devices made from plant-derived cellulose nanofibre, designed to decompose naturally.

(Image: crqlr.com)

Industrial Symbiosis

Industrial symbiosis involves different industries working together to use each other’s by-products and waste materials as resources. This creates a network where waste from one process becomes the input for another, lowering production costs, enhancing resource efficiency and reducing environmental impact.

RECOTECH see the environmental and financial advantages in industrial symbiosis. Currently, it is building a large network of producers to identify disued materials or by-products, and connecting them with other businesses and industries that can used them, thus redefining waste as available and valuable resources.

(Image via IDEAS FOR GOOD)

Product-as-a-Service (PaaS)

PaaS shifts the business model from selling products to providing services that fulfill the same need. Companies retain ownership of the product and offer it as a service, ensuring products are returned and recycled or reused at the end of their life cycle. In fact, this concept encourages companies to design products that are durable, repairable, and recyclable, aligning with circular economy principles by reducing waste

airCloset is one of the leading PaaS models for sustainable fashion. Not only does it offer rental of well-maintained clothes, they work actively with other fashion brands to assist them in preventing textile waste. Not forgetting, they have fashion advisors to raise customer satisfaction too!

(Image: Life Hugger)

Circular Design

Circular design focuses on creating products with their entire lifecycle in mind, ensuring they can be easily disassembled, repaired, and recycled. This concept emphasises designing out waste and keeping products and materials in use for as long as possible.

We are always in awe of such circular businesses, for example Totoya and their supermarket, Zero Waste Market. Building a supermarket with zero waste as the foundation, they have created a popular grocery place, acting as support for Kyoto residents looking to lead an ethical lifestyle. From no plastic bags to a circular food system with their cafe at the back, Totoya is a leading example for others to follow.

(Image: Kirsty Kawano)

Extended Producer Responsibility (EPR)

EPR policies make manufacturers responsible for the entire lifecycle of their products, including take-back, recycling, and final disposal. This encourages producers to design products that are easier to recycle and have a lower environmental impact. It also shifts the responsibility for waste management from consumers and governments to producers.

We can see examples of this working best on policy level. Most noteably there are the Basic Act on Establishing a Sound Material-Cycle Society and the Law for the Promotion of Effective Utilisation of Resources. These legally embed the 3Rs and lets ministries designate industries that must redesign, label, collect or recycle their goods. There are many other schemes too, for example the End-of-Life Vehicle Recycling Act where automakers pre-charge buyers a recycling fee that funds safe removal of airbags, fluorocarbons and automotive-shredder residue, and Small Home Appliance Recycling Law where the goal is rare-metal recovery from phones, cameras, games consoles, etc.

Circular Cities

Circular cities integrate circular economy principles into urban planning and development, focusing on resource efficiency, waste reduction, and sustainable living practices.

Kyoto City

Kyoto as a leading example of a circular city, deeply rooted in its 1,200-year history and cultural traditions. It leverages its rich heritage to inspire sustainable businesses and a convivial society for the future.

The city has actively worked since 2000 with citizens and businesses to halve its waste, achieving successes such as reducing waste from 820,000 tonnes to about 365,000 tonnes by 2024. Initiatives like the revised Shimatsu no kokoro Ordinance and the Miyako Shigen Meguru Plan, which aims to promote a circular society by 2030, provided the momentum for the city’s shift towards circularity. Kyoto’s approach blends its historical spirit of mindful frugality (Shimatsu-no-kokoro) with modern circular economy principles, fostering a harmonious balance between environment, industry, and community well-being.

The city is also home to innovative programs, such as the Circular Business Design School, which trains local firms to adopt circular practices, and events like the Junkan Fes, which promotes a reuse culture through community engagement.

Yokohama City

Yokohama is one of the pioneering circular cities, characterised by a strong foundation of civic engagement, trust, and creative reuse. The city’s approach comes from decades of dialogue between citizens, businesses, and the government, turning heritage buildings and waste into new value and fostering a unique circular economy model. Key initiatives include the Minato Mirai Circular City Project, which tracks resource flows to reduce greenhouse gas emissions and enhance circularity, and the Yokohama Resource Circulation Promotion Platform, which accelerates collaboration between the city and local waste management operators.

Yokohama also leads regional efforts, such as launching the Asian Circular Cities Declaration at the Asia Smart City Conference 2025, uniting Asian cities to advance circular economy governance and share best practices. The city’s Civic Power (citizen-led initiatives) is a global model for sustainable urban living, with events like Circular October and platforms like Circular Yokohama promoting circular lifestyles and community participation.

Circular Economy case studies in Japan

Ethical Spirits

(Image: ethicalspirits.jp)

Ethical Spirits was founded in 2020, and they are advancing a circular economy through their distillation as a platform. They produce craft gin and whiskey using waste materials, including out-of-spec sake, food production by-products, and distillation leftovers.

Their flagship products, like the LAST EN gin, incorporate up to 14 different types of surplus materials, and they have created new value from upcycling, even proving that sustainability and premium quality can go hand in hand. They hope to inspire the entire spirits sector to adopt circular practices, regenerating abandoned lands and establishing Japan’s first ethical distillery.

They have also collaborated with partners like NOHGA HOTEL UENO TOKYO to create gins from upcycled ingredients, such as ginger residue, and has received international recognition, including being a finalist for “Sustainable Distillery of the Year” at the World Gin Awards 2023 and winning the SDGs Award at the Tokyo Whiskey & Spirits Competition 2023.

Read about Ethical Spirits' SDGs award here

Junkan Fes (Circular Festival)

(Image: Roger Ong)

Kyoto’s Junkan Fes is a dynamic, circularity-focused festival designed with Generation Z in mind. The goal is to redefine circular economy practices through reuse and fashion, though the festivals are more fun than messaging. Its first edition began in Kyoto’s Umekoji Park, but is already expanding to other locations within Japan. The event features free second-hand clothing exchanges via the “¥0 Market,” where attendees can both donate and collect pre-loved garments. The festival also offers workshops, exhibitions, and stage performances that promote circular economy principles in an engaging, accessible way.

Since its debut in 2022, Junkan Fes has become a major event in Kyoto’s environmental movement, drawing over 10,000 attendees per edition. It is a gear for their ecosystem to circulate used clothes, which includes the RELEASE⇔CATCH clothing collection and distribution system, and, more importantly, fosters a culture of reuse among young people and the citizens in Kyoto.

Read our report for Kyoto's Junkan Fes here

AGC

(Image via IDEAS FOR GOOD)

Japan’s AGC is a leader in creating a circular glass economy, with several groundbreaking initiatives throughout the country. In Suwa City, Nagano Prefecture, AGC launched a regional co-creation project with the beloved SUWA Glass Village to establish local glass recycling, envisioning to build a system where glass is continuously recycled within the community. This effort involves close collaboration with local stakeholders, including businesses and cultural institutions like Suwa Taisha, to define quality standards and sorting rules for recovered glass.

AGC also pioneered Japan’s first successful initiative to recycle discarded glass from store equipment, partnering with Seven-Eleven to turn old store glass into new flat glass panels for refrigerated display cases. This “Store Glass to Store Glass” concept reduces industrial waste and conserves natural resources. Additionally, AGC has partnered with NPC to develop a scheme for recycling end-of-life solar panel glass into architectural glass.

AGC believes that energy consumption and material circulation are interlinked, and their projects demonstrate a commitment to both carbon neutrality and resource circularity.

Learn about AGC from our interview with them

i-kasa

iKasa is Japan’s first sharing economy for umbrellas. This is an important infrastructure because umbrellas account for a large amount of waste that Japan produces annually.

However, sharing economy is not the only benefit iKasa pushes for. It is introducing repair for their products. This reflects the extension of the product’s lifecycle with in a circular loop. This not only lengthens the life of each umbrella, it also pushes for responsible usage, reducing costs of umbrella waste disposal, while moving towards a Product as a Service model.

More on iKasa's umbrella sharing service here

Organisations promoting Circular Economy in Japan

    • Circular Economy Japan : The organisation’s goal is to build a circular economy that meets an international standard in Japan.
    • Circular Economy Hub : This platform shares the latest news, events, workshops etc, while also educating the public and businesses the concepts of circular economy.
    • Circular Yokohama : This is a platform that wants to speed up the adoption of circular economy in Yokohama. In turn, it hopes to tackle concerns in Yokohama, and brings out the best in the city.
    • Circular Economy Organization : This organisation was founded to revolutionise all industries through the developments of IoT, Big Data, Mobile tech, Cloud tech and Artificial Intelligence.
    • Kanagawa Upcycle Consortium : This consortium wants to promote its upcycle model, and become the leading model of a circular economy of the world.

Youtube Channel: Circular Economy Basics Series

To make Circular Economy understandable in a ELI5 manner, we have made a series of videos on our Zen Waves Youtube Channel.

The latest news about Circular Economy in Japan

Articles about Circular Economy

Commonly asked questions about Circular Economy

Looking to learn more about Circular Economy? Here is our Compendium series for Circular Economy, answered in short, understandable bites!

Circular economy: Key to a sustainable future