Recycling is life-and-death issue

A proposed European Commission directive forcing car makers to take responsibility for recycling old vehicles could sound the death knell for some UK firms, warns Paul Everitt

The European Commission is proposing a directive to force motor manufacturers to take responsibility for recycling all cars at the end of their useful lives. It would require manufacturers to ensure the safe disposal of all new cars from 2001 and for all existing cars from 2006. This would have damaging financial implications on the motor industry.

More than 11 million cars are scrapped each year across Europe, the UK accounting for between 1.6 and 1.8 million. If the directive goes through, UK manufacturers could face an annual bill of some £160m, leading to further pressure on suppliers to reduce costs, and greater incentives for global firms to source or supply from outside the EU.

The motor industry recognises its responsibility to minimise the environmental impact of vehicles it produces, and is happy to comply with the directive in respect of new cars.

In the UK, 64% of the weight is recycled and 75% is recovered, the difference being made up of waste products which can be burnt to produce energy. In 1997, the Automotive Consortium on Recycling and Disposal, a body involving manufacturers and the vehicle dismantling, shredding, plastic and rubber industries, signed a voluntary agreement with government to increase the proportion of material recovered from vehicles to 85% by 2002 and 95% by 2015.

However, the cost of the retrospective aspect of the directive could bankrupt some large companies and lead to severe problems in the industry. The full implications for the sector have not been recognised by the European Commission. European motor manufacturers’ association ACEA, and national trade associations and companies, will try to persuade MEPs to scrap the damaging part of the legislation.

It is one thing to design and build vehicles to meet current requirements, but it is unfair to expect vehicles produced over the past 20 years to perform in the same way.

The directive also imposes unrealistic recycling targets of 80% by 2005 and 85% by 2015. These will restrict processing options and force the uneconomic recycling of material instead of energy recovery.

The costs of vehicle disposal depend heavily on the value of material recovered. Over the past couple of years, the value of material from an average end-of-life vehicle has dropped from around £50 to £20.

If the directive results in more vehicles being safely scrapped, the quantity of available recycled material will inevitably increase and the value will fall as a result. It is essential that recycling remains economically viable, or end-of life vehicles will hold little commercial value.

In addition, end-of-life vehicles could be designated as hazardous waste, requiring the Environment Agency to be notified each time a vehicle is moved – a process involving issuing consignment notes and a £15 charge (£23 in Northern Ireland).

Safe disposal of end-of-life vehicles should not be the sole responsibility of vehicle producers. In Germany, for example, car owners remain liable for the annual road tax unless they obtain a certificate of destruction confirming that a vehicle has entered an accredited disposal network. This helps reduce the cost of collecting vehicles.

Creating a similar system in the UK, along with Government action to establish viable markets for recycled materials, could help reduce the burden on manufacturers. It would also provide an incentive to improve other operations further down the recycling chain, to dismantlers, shredders and recyclers, rather than lumber motor manufacturers with the total cost for end-of-life vehicles.