End of Life Vehicles

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We have strong (and we believe entirely logical) views on this, and have both lobbied government and advised those who will be affected, at the highest levels in the UK and Europe.

VM's are in general all working hard to make the design of their cars more recycle-able.  The imposition of an EC regulation is unhelpful while this process is on-going, but having been decreed it should be implemented in the UK and Europe.  The regulation is complex and requires a series of formal decisions not only by car-makers but by all motor industry players and government to facilitate the regulation and make it work in practice.

When a car is scrapped, in theory around 25% of the total will go into land-fill and this is totally unacceptable in the medium/long term - in practice we believe a much higher fraction is still going to landfill.  We support the move to reduce this fraction of land-fill firstly to 15% and then to 5% in 2015.  However, new separation technology and investment in plant and equipment must be available to enable the 5% fraction, and appropriate technology is simply not in sight at present - let alone somebody willing to invest the huge sums required in treatment facilities.

Hot debate has recently ensued in the UK concerning whether there is - or is not - an additional cost in end-of-life vehicle actions under the forthcoming UK regulation.  Here are some of our views;

  • Currently, those vehicle owners in the UK wishing to dispose of ELV's which are undriveable (real or imagined), have been de-motivated by the cost per vehicle imposed upon them by dismantlers of between 50-80.  This cost arises from the difference between the labour cost to dismantle the car and the revenue obtained from the scrap materials generated.  It is believed a similar situation exists across the major European markets.

  • Currently less than 1% of all ELV's are properly de-polluted - if at all.  There is a clear cost in this process - a variable mix of capital investment in land and equipment, and in labour cost per vehicle.  This is debatably in the region of 40-60 per vehicle and is thus a clearly definable add-on cost.  It has been suggested that re-structuring the dismantling industry by reducing the number of participants and making each 'survivor' more efficient would enable the remaining members to absorb these costs themselves.  We believe this is fanciful in the extreme.

  • There is only one example of disciplined ELV processing available.  This is in the Netherlands.  Automotive Recycling Netherlands (ARN) has since 1993 created an efficient infrastructure by enlisting the full co-operation of all market participants including the consumer body, car makers, government and re-cycling industry members from dismantlers to re-processors.  This works well, at a total cost of around 65 per vehicle.

  • The EC legislation places the financial burden upon car makers for ELV processing - although it does not specifically exclude liberating this cost from the consumer.  In our opinion this is fundamentally unfair as the car maker only has one small opportunity to profit from making the car, at the point of new car sale to the consumer.  Subsequently, many other industry participants make much larger profits from each car, for example insurance and oil companies, used car dealers, and the government directly in the form of large and small taxes on all these transactions.  Some form of levy upon all profit takers would be more fair.

  • While some car makers representatives deny there will be any future cost in processing ELV's and thus that there is any point in discussing their cost participation, at the same time the method by which such schemes might be funded has been under intense discussion - with two divergent viewpoints;

    • Funding should be on a 'vehicles processed' basis.  This forces retrospective responsibility on car makers for an ageing vehicle parc over which they may have previously had little/no control, and in some cases places a heavy future contingency in their balance sheets - possibly of sufficient significance to make them financially unviable,

    • Funding should be based on new vehicle registrations.  Thus, those car makers selling more cars today will be contributing to scrapping vehicles of brands other than their own, and wish to avoid this to minimise their own costs.  While this also is fundamentally unfair, at least those companies currently selling cars are in a position to pay from customer revenue/profits.

    The fact remains that there will be a cost and whichever method is eventually chosen to finance an ELV scheme, the consumer will pay either directly or indirectly within the new vehicle price, or in the price of replacement parts.  Thus, why not introduce a direct levy to the consumer, as has been successfully done in the Netherlands?

We have constructed an eco-financial model of the known options for implementation in the EC in 2002 and beyond, with their costs and opportunities.  We are able to advise car makers, government and other industry players including the tier supplier industry who we believe will inevitably be asked by the car makers to bear some part of the arising costs, whether directly or indirectly in accepting end-of-life components, or in researching and designing components for easier re-cycling.

We have a concise survey available on this subject, which is regularly updated in line with developments and includes a 'public' version of our modelling software.  In mid-2002 in the UK, nothing is clear.  To go direct to our survey, please use the following link;

End of Life Vehicles - UK Scenario

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Last modified: January 10, 2013