Recycled Materials for automobile interior market - Forecast(2024 - 2030)

The recyclable materials for automobile interior market size is forecast to reach USD 6,212 million by 2031, after growing at a CAGR of 6.79% during the forecast period 2024-2031. The market for recyclable materials for automobile interiors is expanding significantly as a result of several causes, such as technological and scientific developments in materials science have made it possible to create long-lasting, high-quality recyclable materials that are used for automobile interiors. Consumer preferences have changed as a result of greater emphasis on sustainable practices and increased awareness of environmental challenges worldwide. presently a lot of automobile consumers are more aware of the environment and actively look for products with smaller environmental footprints.

The report “Recyclable Materials for Automobile Interior Market – Forecast (2024-2031)”, by IndustryARC, covers an in-depth analysis of the following segments of the Recyclable Materials for Automobile Interior market.

By Material: Polymers, Leather & Vinyl, Composites, Metals, Others.

By Vehicle Type: Passenger cars, Commercial vehicles.

By Powertrain: ICE (Internal Combustion Engine), Pure Electric, Hybrid Electric. 

By Application: Cable insulation, Carpet fibers, Seating & Upholstery, Foam insulation panels, instrument panels, Sheathing of electrical cables, Door handles, Panels, and, Others.

By Geography:  North America, South America, Europe, APAC, and RoW.

• APAC held the largest market share with 43% in 2023. The automotive industry has grown significantly in the region of Asia-Pacific, with several nations becoming prominent producers of automobiles. The integration of recyclable materials into car interiors is one of the creative and sustainable technologies that are being prioritized alongside the growth of the automotive industry.

• In the automobile industry, efforts are being made to develop a circular business model, mostly in Europe. For instance, The European Commission unveiled new regulations on vehicle design and End-of-Life Vehicle (ELV) management on July 13, 2023. The law mandates that at least 25% of the plastic used to make new automobiles be recycled, and that another 25% come from end-of-life vehicles, in addition to encouraging the reuse of parts in vehicle design. 

• Developed countries such as the US, Japan, and Germany are emphasizing the usage of environmentally friendly products instead of those made from petroleum. Recycled materials are reportedly being included in an increasing number of automobile models. As countries like the US, Japan, India, and the EU tighten laws, especially in the transportation and automotive industries, it is anticipated that the use of recycled materials will rise. The EU has set emissions reduction standards for new cars to decrease CO2 emissions and increase fuel efficiency. 

Polymers dominated the recyclable materials for automobile interior market in 2023. There are several strong reasons for the growing demand for recycled automotive polymers. They provide considerable latitude in the design of internal elements, and they are sturdy, haptic, and abrasion- and vibration-resistant. Furthermore, they are easier to process and have a better price-performance ratio. Polymers have also benefited greatly from the trend towards lighter-weight automobiles. The increasing popularity of electric vehicles places new demands on components. For example, the demand for long-term heat-resistant plastics will rise. The need for more reasonably priced, lightweight, and fuel-efficient vehicles is being driven by strict laws and evolving consumer behavior. For instance, fuel efficiency has become one of the most important features in automotive vehicle design due to rising fuel prices and stricter environmental regulations.

Passenger cars dominated the recyclable materials for automobile interior market in 2023. As the leading passenger vehicle suppliers and major providers of raw materials to the automotive industry try to face the massive transition to a circular economy challenge with the automotive industry value chain through existing and new partnerships, the market for recycled materials for automobile interiors is expected to increase. For example, the BMW Group is collaborating with the start-up Adriano di Marti S.A de C.V. to develop DeserttexTM, a sustainable material made of powdered cactus fibers and a bio-based polyurethane matrix.

For instance, in 2020, Covestro derived feedstock from biobased and circular renewable sources supplied by partner Neste, and developed a certified, mass-balanced, renewable PC grade, with proven high quality.

The advent of the "Neue Klasse“ by BMW and the intensification of research and development of sustainable materials and substances used in vehicles, propelled the usage of recycled materials for the automobile interior market. From 2025 onwards, the Neue Klasse models will have plastic cladding pieces made up of around 30% marine plastic trash as raw material.

The ICE segment dominated the recyclable materials for automobile interior market in 2023. The automobile industry as a whole, including cars that run on petrol, is realizing the value of sustainability, even though electric and hybrid vehicles frequently garner more attention for their environmentally friendly characteristics. The use of recycled materials in car interiors is part of a larger trend in the industry toward more environmentally friendly methods that help to lessen the environmental effect of vehicles overall over their lifecycle. On 5th June 2023, A joint venture aimed at End-of-Life Vehicle (ELV) recycling was formed by Stellantis N.V. and leading metals recycler Galloo, according to a Memorandum of Understanding they signed. This is part of the automaker's ongoing commitment to expanding its circular economy initiatives. To recover parts for recycling, remanufacturing, and reuse, the Stellantis-Galloo joint venture will collaborate with specific Authorized Treatment Facilities to gather ELVs from the previous owner.

Seating & Upholstery dominated the recyclable materials for automobile interior market in 2023, however, door panels and panel are set to witness significant growth during the forecast period. The automobile door handles and panel market with recycled materials is an emerging trend in the automotive industry. Companies and engineers are realizing the importance of sustainability and are incorporating recycled materials into their manufacturing processes. For instance, in 2022, according to a joint statement from the French recycling company and manufacturer of automotive components, Veolia and Faurecia have established a cooperation and analytical relationship to utilize a shared 30% of recycled plastics in car interiors by 2025, which will also be utilized in door handles and panel and instrument panels. The adoption of recycled materials in the automobile door handles and panel market aligns with global efforts towards sustainability and eco-consciousness. As more consumers prioritize environmentally friendly products, the demand for such components is projected to grow.

APAC recyclable materials for automobile interior market is projected to reach a revenue of $2,733 million by 2031 growing at a CAGR of 7.5% during 2024-2031. Recycled materials for automobile interiors have gained significant attention in recent years due to the growing emphasis on sustainability and environmental concerns. China, being one of the world's largest automobile markets, has also witnessed increased demand for eco-friendly automotive components, including recycled materials for interiors.

According to AlixPartners, China's central government has invested over $57 billion to encourage the purchase of electric vehicles between 2016 and 2022. Without accounting for incentives from state and local governments, that amounts to nearly five times the amount the US government spent during the same time frame. The increasing government support in terms of funds and investments is anticipated to drive market growth.

The Production-Linked Incentive (PLI) Scheme was introduced by the Indian government in 2022 to stimulate the auto and auto component industries. With a $3.5 billion budget, the PLI program for the automotive industry offers financial incentives of up to 18% to encourage investments in the car-making value chain and increase local production of high-tech automotive products.  The rise in government support and incentives or investments is also anticipated to drive the recycled materials for automotive interior market growth.

 

There has been a growing global emphasis on sustainability and environmental consciousness. This trend has influenced various industries, including automotive, to adopt eco-friendly practices, such as using recycled materials in manufacturing processes. Recycled plastics, particularly those derived from post-consumer or post-industrial sources, have gained popularity in automobile interiors. These materials are used in components like seat fabrics, carpets, and interior trims. For instance, on July 19, 2023, Avient Corporation introduced two new reSoundTM REC Recycled Content Thermoplastic Elastomers (TPEs). The new grades for car interior applications are made with post-consumer recycled (PCR) material, making them a more sustainable TPE choice that performs similarly to standard TPEs.

On May 3, 2022, A Cooperation and Research Agreement was signed by Veolia and Faurecia, a business of the Group FORVIA, to develop novel materials for car interior modules together with an average of 30% recycled content by 2025. Through this collaboration, the two businesses will accelerate the introduction of innovative environmentally friendly interior design solutions in instrument panels, door panels, and center consoles throughout Europe. These secondary raw materials will be produced by Veolia at its current recycling facilities in France.

Government regulations are a key driver for the adoption of recycled materials in the automobile interior market. Governments around the world are implementing and tightening regulations to address environmental concerns, promote sustainability, and reduce the overall environmental footprint of industries. EPR regulations make manufacturers responsible for the entire life cycle of their products, including recycling and disposal. To comply with EPR requirements, automotive manufacturers may choose to use recycled materials in their interiors as part of sustainable and responsible product design. For instance, in India on August 2, 2023, a rule on extended producer responsibility (EPR) for end-of-life vehicles (ELV) is being drafted. According to the draft legislation, new cars made from 2026-27 must contain 20% recycled metals from discarded vehicles, with the percentage increasing to 30% in 2028-29.

Governments establish emission and environmental standards that manufacturers must comply with. Using recycled materials can contribute to meeting these standards by reducing the overall environmental impact of manufacturing processes. For instance, The European Commission is exploring legislation requiring recycled thermoplastics to be used in all new automobiles, with a target of 25% by 2025 and 30% by 2030.

The lack of technical knowledge poses a significant challenge to the widespread adoption of recycled materials in the automobile interior market. Manufacturers and industry stakeholders may face barriers to understanding the intricate processes involved in sourcing, processing, and incorporating recycled materials into automotive components. The complex nature of these materials, including variations in composition and quality, demands a clear understanding that may be lacking in certain segments of the industry. Insufficient awareness about the capabilities and advancements in recycling technologies can hinder the seamless integration of recycled materials into production processes. Additionally, the automotive sector's traditional reliance on conventional materials may result in a shortage of expertise in adapting manufacturing techniques to accommodate recycled alternatives.

Manufacturers might encounter difficulties in adapting existing production processes to accommodate recycled materials, leading to uncertainties about product performance, durability, and safety. This lack of technical know-how extends to issues such as material compatibility, quality standards, and the integration of recycled materials into critical components like car interiors. The absence of standardized practices for incorporating recycled materials further complicates these challenges.

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the recyclable materials for automobile interior market. in 2023, The major players in the recyclable materials for automobile interior market are Toray Industries, Solvay, Faurecia, Continental AG, Neste, Unifi, Celanese Corp, Custom Polymers Inc., Procotex, Carbon Fiber Recycling, and others.

 In October 2023, Covestro launched a mechanical recycling polycarbonate compounding line in China. Covestro has commenced operations at its first dedicated mechanical recycling (MCR) compounding line for polycarbonates at its integrated site in Shanghai, China. This line is set to produce over 25,000 tons of premium-quality polycarbonates and blends containing mechanically recycled materials annually, in response to the growing demand for post-consumer-recycled (PCR) plastics, particularly in applications within the electrical and electronic products, automotive, and consumer goods sectors.

 In October 2023, Toray Industries, Inc. announced the development of a technique that allows for the recycling of glass fiber-reinforced polyphenylene sulfide (PPS-GFRP) with performance comparable to virgin resins. Increasing the recycling ratio of PPS GFRP will help to reduce CO2 emissions.