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As a company, we value all materials and natural resources we use to run our operations and make our products. We see waste as inefficiency in our operations, and seek to reduce, reuse and recycle materials and resources wherever possible. Source reduction is a top priority because it results in less natural resource use, prevents pollution from raw material extraction, lowers energy use and emissions from manufacturing and transport, and reduces waste to landfill or incineration. Where source reduction is not possible, reusing or recycling materials benefits the environment by diverting materials from waste disposal and conserving natural resources by serving as a feedstock for manufacturing processes.

Toyota looks for opportunities to reduce, reuse, recycle and manage our resource use at all stages of the vehicle life cycle, from design to manufacturing, sales and distribution, use and end-of-life phases. Our performance against targets in these areas for FY2010 is described in this chapter.

DESIGNING VEHICLES WITH THE ENVIRONMENT IN MIND

Ecological plastics are derived either wholly from plant materials, or in combination with petroleum-derived materials, and emit less CO2 during their life cycle than plastics made solely from petroleum. Toyota uses these plastics in some of our vehicle parts such as scuff plates, sun visors, seat cushions, trunk liners and door trim. We have also developed bio-based plastics using a polypropylene/polylactic acid (PP/PLA) alloy, and applied this material to interior parts of our vehicles.

Toyota's model year 2011 Prius has been redesigned. It incorporates biobased plastics in the driver seat cushion, scuff plate and cowl side trim. Our model year 2011 Sienna has also been redesigned, and it incorporates recyclable material for the interior trim lower garnishes. The deck trim and door trims are made using PP material.

In addition to bio-plastics, we are incorporating other recycled materials in our vehicles. In our truck line, the Tundra now includes a silencer pad made from recycled polyvinyl chloride (PVC). The silencer pad is located between the rear seats and the sheet metal of the cab; its function is to reduce noise within the cab. As of April 2010, Toyota made a running change to production to include these recycled PVC pads in our Tundra trucks.

Natural materials are also considered for parts and components. Our team members that designed the Lexus created a deck board made from jute. Jute is a vegetable fiber that can be spun into coarse, strong threads, and as a fabric, is commonly known as burlap. A deck board is a part that covers the interior trunk space above the spare tire. The jute deck board is the first natural fiber, load-bearing floor used in one of our SUVs. Development work was completed in FY2010, and we made running changes to our production in August 2010 to install this new component in our RX 350s.

We have made progress in our effort to evaluate and incorporate renewable resources in our parts and components, and we will continue this practice going forward. (Target 6.1)

SUBSTANCES OF CONCERN

In North America, our strategy for substances of concern (SOCs) focuses on four heavy metals that are known to cause impacts to the environment: hexavalent chrome, mercury, lead and cadmium. We seek to reduce these SOCs in parts, components and accessories in Toyota, Lexus, and Scion vehicles. In parallel to this effort, we are also collaborating with regulatory agencies to bring about necessary changes to management of SOCs, shifting from retroactive mandates to a proactive process that allows for appropriate planning and substitution of chemicals with better alternatives.

Reducing SOCs

As we take a life cycle view to design, we recognized early on that certain chemicals incorporated into parts and components could cause environmental impacts when vehicles reach the end of their useful life — either in scrap yards or landfills. This understanding led to Toyota's voluntary commitment in 2004 to minimize SOCs in North America. We have followed through on that commitment for the last six years with measurable progress made in FY2010. Working closely with our suppliers, we have successfully reduced SOCs in North America to de minimis (negligible) levels as outlined in the European Union Directive on End-of-Life Vehicles (as defined in 2008). (Target 9.1) Toyota's model year 2011 Sienna was redesigned to have parts that only contain de minimis amounts of SOCs that we manage, with the exception of lead in lead-acid batteries. As an example, we eliminated platings containing hexavalent chrome that are typically used on locks, strikers, fasteners, brackets and other small metal parts throughout the vehicle.

To make significant changes happen as we did in redesigning the Sienna, we needed a strong governance structure within our North American companies to manage the process. As part of our overall strategy for SOCs, we formed a Toyota cross-affiliate working group that included managers from our design, manufacturing, sales, distribution and legislative analysis divisions within our companies. This group surveys emerging chemical legislation to identify where alternatives will be needed. (Target 9.2) Analyzing upcoming legislation is helpful, but a more proactive process is needed. To help this come about, Toyota — as one of a number of stakeholders — is engaging with government agencies to provide the insight necessary to create the next generation of managing SOCs in vehicles.

As a stakeholder engaging with government agencies, Toyota provides its view on the key elements of next-generation management for SOCs. Most importantly, Toyota believes that a common, stakeholder-supported next-generation management approach for SOCs should be adopted, rather than a patchwork of legislation and regulations across the country.

A positive step toward next-generation management of SOCs is U.S. EPA's Green Chemistry program. Program participants have developed 12 principles that will allow for a more proactive approach to reducing toxic chemicals. Five of the 12 principles are aligned with Toyota's Guiding Principles and Earth Charter:

  • Preventing waste;
  • Using renewable feedstock;
  • Increasing energy efficiency;
  • Designing chemicals and products to degrade after use; and
  • Minimizing the potential for accidents.

The potential of the Green Chemistry program is influencing how various governmental bodies are approaching chemical management. The trend in promulgated and proposed legislation and regulations is to promote reductions in toxic chemicals through risk assessment, and alternatives analysis and development. In California, the legislative assembly passed AB 1879, the first comprehensive green chemistry legislation in the U.S. The bill establishes an expert panel (the Green Ribbon Science Panel) to advise the California Department of Toxic Substances Control (DTSC) on processes, policy development and implementation strategies. AB 1879 authorizes the DTSC to write the regulation for Green Chemistry. A first draft of DTSC's regulation has been circulated, and Toyota is actively engaged in commenting on this rule.

While engaging on all of these fronts, Toyota must ensure that we are conforming to our own global standard for SOCs. Tracking and verification of SOCs in parts, components and accessories is accomplished via industry-wide and internal systems. (Target 9.3) In Japan and North America, our researchers continue to investigate and develop alternatives for specific SOCs.

WASTE REDUCTION AND RECYCLING IN OUR OPERATIONS

Across all of our North American businesses, we make reducing waste and increasing recycling a high priority, and track our progress against measurable targets. We feature our manufacturing and sales and logistics operations here.

Manufacturing

One of the best ways of reducing waste is by rethinking the old way of doing things. A good example of this involves Toyota's Technical Center, our assembly plants and one of our suppliers. Previously, our plants used an immersion (dip) process to apply corrosion inhibitor to our vehicles. In order to cover all the interior crevasses of the vehicle, an excessive amount of corrosion inhibitor was required. Our team members worked with a partner company, PPG, to develop an electronic process that uses less corrosion inhibitor to achieve the same level of coating. The electronic process has now been implemented in North America at all but one of our plants that have such processes. This creative approach garnered PPG an Automotive News PACE Award in 2009. PACE Awards are given for superior innovation, technological advancement and business performance among automotive suppliers.

Such creative thinking has helped both our production and nonproduction facilities reduce waste, and increase both recycling and source reduction.

Production Facilities

Our manufacturing operations in North America have continually evaluated our waste streams to look for alternatives to sending materials to landfill. Our nonsaleable waste has been reduced to 17.7 kilograms (kg) per vehicle in FY2010, well below our target of 30 kg per vehicle by FY2011. (Target 7.1) Our progress against this target is illustrated in Figure L. The following are examples of activities implemented by our production facilities (North American assembly plants) within the past year that have reduced nonsaleable waste.

Figure L - Nonsaleable Waste per Vehicle Produced in North America

Team members at our Huntsville, Alabama, plant had reuse clearly in mind in FY2010. The plant was in the process of shutting down a production line for a type of engine that was no longer needed. Instead of viewing all materials from the old line as waste destined for disposal, Toyota's team members investigated the possibility of reusing or recycling these materials. Specifically, they found that 30,000 gallons (gals.) of coolant from the central systems on the old line were compatible with an existing line in another part of the building. They siphoned off the coolant into containers, transported it across the plant, and recharged the other equipment to the benefit of both the plant and the environment.

A number of our plants have stepped up their efforts to recycle materials such as plastics and cardboard. Toyota's Long Beach, California, plant has acquired a baler to recycle plastics, while Huntsville has installed a baler for plastic bottles and two balers for cardboard to increase the efficiency of recycling at the plant and reduce volume during transport. A program was instituted at our British Columbia, Canada, plant for separating plastics and cardboard, contracting with a new recycling vendor, acquiring balers to handle these materials, and launching a more aggressive office waste recycling effort. Together, these sites were able to recycle 69,441 lbs. of nonmetal materials.

At our plant in Buffalo, West Virginia, our team members send plastics to a local recycling company that turns the material into flying discs (similar to Frisbees®). During visits from local schools, the flying discs are given to children to provide a tangible example of how waste can be recycled into something useful and fun. We handed out over 1,500 flying discs in FY2010. The Buffalo plant also sends plastics to recycling to make guardrails for roadways.

Group photo of children at Toyota facility
Children visiting our facility in Buffalo, West Virginia, receive flying discs made from used packaging plastic from our operations. The flying discs serve as a tangible reminder of the importance of recycling.

Our plant in San Antonio, Texas, has implemented a kaizen to reduce the amount of waste from paint sludge. Previously, the paint sludge had high water content and was held in a roll-off container prior to transport and disposal. Team members replaced their existing roll-off container with a dewatering box that uses a filter frame and cloth liner, allowing the water to drain from the sludge into the bottom of the container. Periodically, team members pumped the water into a separate container and sent it to wastewater treatment. The new process reduces the weight of the sludge by 28 percent, and lowers overall disposal cost. In addition, the sludge is now suitable to be recycled as a base material for a local cement company.

Photo of Toyota team member near gravity filter
Using a gravity filter to dewater paint sludge reduces the amount of waste sent off-site for treatment, and allows for the remaining sludge to be used as a recyclable material.

In Georgetown, Kentucky, our team members are committed to the ultimate goal of zero waste. One of their waste streams is compostable, and the plant processes about 1.5 tons of this waste daily. A portion of the compostable waste originates from the cafeteria, and it is used in a six acre garden located near the plant. For the fourth consecutive year, 80 percent of the vegetables grown in the garden were donated to a local food bank in Lexington, Kentucky, which provides food to low-income residents. The other 20 percent is used within the plant's own cafeteria. Also, the plant is moving toward using more organic materials in the cafeteria, including compostable plates and cups instead of Styrofoam™.

Our plants achieved the target to be near-zero waste to landfill (measured annually as a 95% or greater reduction to waste to landfill, averaged across our North American plants). (Target 7.2)

Nonproduction Facilities

At our nonproduction facilities, we are focused on our target of zero hazardous waste to landfill and reducing nonhazardous waste toward zero landfill disposal. (Target 7.3)

Toyota's design facilities maintained zero landfill for hazardous and universal waste in FY2010. We also installed a new compactor at one of our buildings in Michigan in February 2010. The waste from that building is now sent to a local waste-to-energy facility and not to landfill. Also, we continue to recycle our modeling clay, a practice that has been conducted since 1973.

An increased effort to reduce waste at our manufacturing headquarters in Erlanger, Kentucky, has resulted in our maintaining zero waste to landfill for over three years. In addition, to improve environmental awareness and sustainable practices the training for newly hired team members has been revised and updated to include topics such as proper waste segregation and raw chemical approvals. In our cafeterias, we have implemented compostable utensils, to-go containers, and lids and straws. Further, in December 2009 we tested new touch-free compostable waste containers to encourage team members to recycle, and we sent 77,270 lbs of waste to our plant in Georgetown, Kentucky, to be composted As a result of these initiatives, we have increased the recycling of materials from 58 percent in FY2009 to 66 percent in FY2010.

Sales and Logistics

Toyota's sales and logistics division is responsible for transporting parts and vehicles across North America. Each day, our associates work to follow the Toyota Way principles of continuous improvement and eliminating waste. Thanks to a collective effort, we were able to recycle 18.8 million lbs. of material representing 89.4 percent of our waste, while sending 1.1 million lbs. to energy conversion in FY2010.

U.S. sales and logistics sites in Fremont, Long Beach, San Francisco, Torrance, and Ontario, California, won a Waste Reduction Awards Program (WRAP) award this past year. WRAP is administered by the California Integrated Waste Management Board, a state agency. The program recognizes California businesses and nonprofit organizations for their outstanding waste reduction efforts. In addition to the WRAP award, our logistics site in San Francisco received recertification as a "Green Business" for its efforts to reduce and reuse over 1 million lbs. of paper, cardboard, wood, plastic, and metal, as well as starting an associate "E-Waste" collection program.

We also look for ways to promote recycling in communities where we operate. Over the past few years, several Toyota locations have organized "E-Waste Roundups" on Earth Day for Toyota associates to bring electronic waste from home to be recycled. These roundups give the materials a second useful life, and also keep toxic materials out of landfills. Since 2007, these events have been combined with efforts to collect items for Goodwill Industries. In FY2010, over 7,700 lbs. of consumer electronics were collected at our U.S. sales headquarters in Torrance, California, along with 2,400 lbs. of clothing and household goods collected for Goodwill Industries. Over 4,000 lbs. of clothes, eyeglasses, batteries, cell phones and other electronic equipment were collected at our Canadian sales headquarters in Toronto, Ontario.

Sales

Toyota established a target to recycle 75 percent of the waste from our U.S. sales headquarters campus in Torrance, California, by FY2010. In FY2010, we achieved a 71 percent recycle rate and therefore missed our target. (Target 7.4) However, the campus was able to maintain zero waste to landfill during this time by utilizing a waste-to-energy provider. Toyota's Canadian sales headquarters set a target to divert 95 percent of its waste from landfill by the end of calendar year 2010. We diverted 91.5 percent of our waste in 2009 and are still working toward our goal. (Target 7.5)

Also at our Canadian sales headquarters, we have a target to reduce paper consumption by 25 percent per person by 2010 from a baseline year of 2004. We achieved our target ahead of schedule, and have continued to reduce our paper consumption by 41 percent since 2004. (Target 7.6) Overall, we have cut our paper consumption by 5.87 million sheets, or 68 percent, since 2001.

Our associates consider all types of waste streams for reduction efforts. One of our associates at our Canadian sales headquarters has taken a personal initiative to ensure that milk cartons are properly recycled and do not end up in a landfill. Each week he collects approximately 125 milk cartons and takes them either to the recycling depot or his own personal recycling container at home. Last year, he was able to collect over 6,500 cartons for recycling.

Parts Distribution

Our North American Parts Operations (NAPO) has a target to reduce nonhazardous waste sent to landfill by 33 percent by FY2011, from a FY2006 baseline of 13.5 lbs. per 1,000 pieces shipped. Since this target was exceeded in FY2008, NAPO revised the target in FY2009 to a disposal rate of 5.1 lbs. per 1,000 pieces shipped through FY2013. In FY2010, NAPO exceeded the revised goal by 22 percent. (Target 7.7)

NAPO has partnered with Dealer Operations to implement kaizen to reduce the amount of parts returned to NAPO from dealerships and sent to landfill. NAPO revised the program logic, which previously allowed dealerships to determine if a vehicle part is waste or usable inventory. Through the kaizen process, NAPO was able to reduce the amount of parts disposed or recycled by 20 percent.

Our parts center in Hebron, Kentucky, generated approximately 250 lbs. of soft plastic per day, and prior to last year, all of this waste went to landfill. The parts center acquired a baler for the soft plastic material, identified a recycling vendor, and established a goal to reduce waste to landfill by 20 percent per month by March 2010. The parts center achieved their target and collected on average 6,900 lbs. of soft plastic for recycling each month. In addition to internal recycling, the parts center also uses reverse logistics on existing return truck hauls to receive shipments of plastic from our parts distribution centers in Boston, Baltimore, Cincinnati and Kansas City, ensuring that these materials are recycled as well. In all, the parts center and the distribution centers were able to recycle 69,627 lbs. of soft plastic in FY2010.

Parts Packaging

NAPO uses over 48,000 reusable metal shipping containers, also known as returnable containers or modules, in place of cardboard and wood pallets. The reusable containers are used among selected NAPO locations, vehicle distribution centers, dealers and suppliers. These containers are also increasingly used for shipments to Canada and Puerto Rico. The metal shipping containers are returned to the nearest parts center and continually reused.

In 2009, we expanded our returnable module programs to include a total of 24 suppliers. In addition, we implemented a new returnable container for our windshield packages, which has saved 450,000 lbs. of wood and 400,000 lbs. of corrugated cardboard. As a result of both of these efforts, we avoided the use of 30.4 million lbs. of wood and 14.6 million lbs. of corrugated cardboard.

Before and after photos of windshield packaging
Using returnable containers for our windshield packaging has saved over 850,000 lbs. of raw materials.

In addition to our increased use of returnable packaging, our parts distribution centers continue to identify new ways to reduce and reuse material needed for our operations. Our associates in Vancouver, Canada, save plastic bubble wrap and sheets of cardboard from packages they receive to reuse as bed liners for outbound shipments. In addition, our associates are also repurposing plastic load straps used for securing bumper covers to the skids.

Vehicle Distribution

Our vehicle distribution centers (VDCs) in the U.S. initially set a target of recycling 90 percent of their waste by FY2011. We achieved this target three years early, and continued to hold our recycling rate at this level through FY2010. (Target 7.8) In addition, our VDCs have a target disposal rate of 0.20 lbs. or less per vehicle processed.

Our vehicle distribution center in Long Beach, California, implemented a kaizen to decrease their impact on the environment by reducing waste disposal. The facility conducted a waste audit for each production shop to identify existing waste streams. Based on the audit, our associates developed countermeasures for sorting wastes; conducted a cost benefit analysis on the countermeasures; implemented new recycling strategies; and evaluated the results. Prior to the audit and implementation of this kaizen, the facility was recycling 88 percent of its waste. The facility is now achieving a 93 percent recycling rate. The distribution center also expects to recycle approximately 50 tons of scrap metal, creating a new saleable waste.

In Georgetown, Kentucky, our VDC has worked to improve its recycling program by installing recycling and compost stations in the mechanic and body shop areas. They also consolidated the general waste baskets with the recycling units forming segregation stations, which improve recycling capture.

Contributions to a Recycling-Based Society

Creating a recycling-based society is one of the action guidelines in the Toyota Earth Charter. In North America, we see our efforts to accomplish this as a key to being a good neighbor in the communities where we live and work. As we gain experience from implementing initiatives in our own facilities, we seek to share these best practices by teaching others how to create their own recycling programs, what can be recycled, and how to make better raw material choices. To further encourage recycling in our society, we have expanded our lineup of remanufactured parts, increased the availability of environmentally preferable paper, and encouraged the appropriate disposal of tires.

Remanufactured Parts

We continue to expand our lineup of remanufactured service parts in order to support customer needs. As these remanufactured parts require fewer resources than new parts, offering and using these parts decreases the overall impact on the environment. In FY2010, we launched 28 remanufactured parts applications and therefore missed our target of 100 for this past year. (Target 17.1) This was due to a lower number of model launches and a decrease in market demand. The FY2011 target is to introduce 50 new remanufactured parts.

The Toyota Wholesale Parts website highlights remanufactured parts, and provides information on ordering, benefits and features, core return policies, new programs, technical information and available resources.

For more information please visit www.toyotapartsandservice.com.

Environmentally Preferable Paper

We continue to maintain our environmentally preferable paper purchasing program. Our U.S. sales headquarters campus uses fine paper with at least 10 percent post-consumer waste (PCW) content and office paper with at least 30 percent PCW content. (Target 17.2) Most of the fine paper, used in our vehicle brochures, has 30 percent PCW content. In addition, 90 percent of the paper we purchased is certified by the Forest Stewardship Council (FSC), which seeks to ensure that the virgin content in the paper has been sourced from sustainably managed forests.

Dealers and Tires

In the U.S., Toyota uses the Tire Shark tire disposal program to encourage dealers to dispose of tires in a safe and environmentally appropriate way. (Target 17.3) Through the program, dealers can find authorized and licensed tire haulers to dispose of tires and ensure compliance with environmental requirements. These tires are recycled and converted to material for playgrounds and playing fields. The recycled tires can also be used as tire-derived aggregate and as an energy source. In FY2010, this program was suspended. Dealers already utilizing the Tire Shark disposal system continued using the service, but the service was not extended to new dealers. Dealers have begun to use local vendors for the environmental disposal of tires, as it is more economical.

WATER CONSUMPTION IN OUR OPERATIONS

A growing number of experts agree that water shortages will occur more frequently in the next 10-20 years, particularly in the western portion of the U.S., unless we begin to take action now. At Toyota, we look for opportunities to conserve water across all of our operations in North America. Below we describe our progress against targets in this area.

Manufacturing

There are a number of areas in our manufacturing operations that require water use, and each represents a possibility for reducing consumption. In FY2010, our water use per vehicle was 0.84 kilogallons per vehicle produced, and we are still achieving our overall target (please see Figure M).(Target 8.1)

Figure M - Water Used per Vehicle Produced in North America

Reusing Process Water

In FY2010, we established autonomous study groups to investigate ways to conserve water. One task undertaken by these groups was to map out process water requirements and process water discharge characteristics within our plants. This information enabled plants to identify opportunities for water reuse as well as benchmarking with similar facilities.

The study group at our plant in San Antonio, Texas, highlighted an opportunity to reduce process water used in a vehicle rinse process. As vehicles move through body painting, they are pretreated with phosphate then rinsed off. Utilizing experience from one of our facilities in Canada, Toyota team members in San Antonio automated phosphate flow volumes and installed a new spray ring, reducing the amount of phosphate needed for pretreatment, and ultimately the amount of water for the rinse. We estimated that the changes saved 64 gals. of water per minute, resulting in a 31.5 percent drop in water use over the last year.

Photo of Toyota team member checking controls
Reusing condensate from roof top temperature and humidity control units in the cooling tower led to reduction in fresh water usage at our plant in San Antonio, Texas.

This plant also implemented a system to capture and reuse condensate from process and nonprocess temperature and humidity control units. Based on meters installed in February 2010, over 800,000 gals. of water were reused in this new system during a seven month period.

Reducing Process Water Usage

At our facility in Buffalo, West Virginia, a kaizen was implemented to reduce the amount of water removed from a circulating system (known as "blow-down") in order to keep the amount of impurities at an acceptable level in cooling towers and chillers. Cooling towers remove the heat from the process equipment, and chillers cool the building air. The water characteristics for mineral content in a chiller are less stringent than those for a cooling tower, so the plant was able to reuse the cooling tower blow-down in the chiller, reducing fresh water consumption by 7-10 percent.

At our facility in Long Beach, California, a new filtration system was installed at the end of a catalytic converter process line. The previous method involved drying process sludge, then sending it out for disposal as a hazardous waste. By filtering the process solution, our team members were able to recapture the liquid and reuse it. Fresh water consumption was reduced by 2,880 gals. and energy was saved by eliminating the drying process.

Team members at our plant in Cambridge, Ontario, responded to the call from authorities urging businesses to reduce their water consumption due to extensive draw-down of the region's existing water source. Our team focused on reverse osmosis units at the plant that remove impurities in process water before discharging. The team assembled a second reverse osmosis unit from spare parts at the facility and installed it to recover 50 percent of water that was previously discharged. This water is reused at the facility, saving 52,834 gals. of water each day. In recognition of this initiative, our team members received an award from Waterloo Region representatives in February 2010.

Sales and Logistics

While water consumption is not the most significant environmental impact from our sales and logistics operations, we believe there are still benefits from reducing our consumption. In FY2008, we completed our evaluation of water consumption at all U.S. sales offices and logistics sites. (Target 8.2a) We then set a target to maintain our water consumption at 2008 levels, and to increase the use of recycled water. In FY2010 we achieved this target by reducing our total water consumption by 487,000 gals. (Target 8.2b)

Through water conservation efforts such as high efficiency water fixtures and reduced landscape irrigation, our sales and logistics facilities reduced potable water consumption by 25 million gals. in FY2010, or 22 percent from the previous year. Furthermore, we have increased the use of recycled water to 85 million gals., an 84 percent increase from last year. Most notably, our site in Ontario, California, and our Inland Empire Training Center in Rancho Cucamonga, California, use recycled water for landscape irrigation.

Our Canadian facilities have exceeded the target to reduce water consumption by 10 percent by 2010, from a baseline of 2004. (Target 8.3) Irrigation of facility grounds is the most significant contributor to water consumption. We continued to use moisture sensors, reconfigured watering zones, and used more efficient sprinkler heads to reduce our water consumption. This year we exceeded our original overall target by 39 percent. We continue to look for opportunities to improve usage monitoring and further reduce our usage, so that we can maintain our current consumption level.