Japan is dependent on imports, mostly from China, for rare earth elements, which are essential for making high-tech products, but a steady supply has been periodically threatened over political disputes with China.
Beijing, meanwhile, has defended its export curbs on rare earths as an environmental measure and rejected a World Trade Organization challenge by the United States, Europe and Japan. China has about 30 per cent of rare earths deposits but accounts for more than 90 per cent of production.
Honda officials said the company was targeting September or October to begin recycling of rare earths. They said it would be a first for the auto industry.
Honda President Takanobu Ito acknowledged uncertainty about the future of Japan's energy policy, which has been thrown into doubt by the nuclear crisis set off by the earthquake and tsunami last year.
''In the long term, we hope to move to renewable energy sources that won't harm the environment,'' he said at headquarters in Tokyo.
Last year's disaster at the Fukushima Dai-ichi nuclear plant led to a nationwide shutdown of Japan's 50 working reactors.
Ito outlined Honda's efforts to reduce pollution and global warming, including experimental projects to combine solar with its fuel-cell cars, what he called the Honda ''dream'' to derive energy solely from nature and emit just water.
Fuel cells are powered by the energy created when hydrogen combines with oxygen to produce water.
Ito said Honda's roots lie in its determination to develop a fuel-efficient gasoline engine to clear US pollution-control regulations of the 1970s. Honda's CVCC engine was the first in the world to clear the standard. Japan later adopted similar pollution regulations.
Ito stressed the environment was a pet theme for founder Soichiro Honda, who repeatedly reminded workers the auto sector must share the responsibility for reducing emissions.
The maker of the Odyssey minivan, Asimo humanoid robot and Super Cub motorcycle is undergoing a strong recovery from a disaster-battered 2011, a rebound playing out at other Japanese automakers, including Toyota Motor Corp and Nissan Motor Co.
Honda's January-March profit rose 61 per cent from the previous year, and it's projecting record global sales of 4.3 million vehicles for this fiscal year.
The earthquake and tsunami in northeastern Japan in March 2011 disrupted the supply of auto parts and sent sales plunging and battered profitability at all the Japanese automakers.