Select Committee on Trade and Industry Minutes of Evidence

Memorandum by the Motor Vehicle Dismantlers' Association of Great Britain

  As it is not yet clear how the End of Life Vehicle Directive (ELVD) is to be implemented in the UK, there is no definitive picture of the economic impact that it will have. What is clear however, is that there will be significant extra costs involved, in meeting the new processing and reporting standards. The scale of the extra costs will depend on whether the directive is implemented by using the existing market infrastructure or by creating a completely new system of collection and treatment.

  There are three major cost implications, resulting from the requirements of the directive.

    1.  The cost of processing around 2,000,000 end of life vehicles to the significantly better environmental standards of both treatment procedures and site infrastructure.

    2.  The cost of the enhanced record keeping that will be required to ensure accurate data on vehicle destructions and verifiable levels of parts and materials reuse or recycling. (Necessary to demonstrate that the 85 per cent and subsequently 95 per cent targets are achieved).

    3.  The cost of policing both environmental standards (Treatment Facility Permits) and vehicle disposal by the last owner.


  There are two types of end of life vehicles, those which occur naturally (NELVs) as a result of becoming "worn out" (eg MOT failures beyond economic repair) and those which occur prematurely (PELVs) as the result of accident damage.

  The routes by which vehicles arrive in the dismantling/scrap metal process are many and varied (annex 1) and their values in terms of recoverable materials and saleable parts are equally varied. Under the current requirements of EPA 1990 sites handling ELVs are usually, although not always required to drain, but not necessarily separate fluids and to remove lead acid batteries from vehicles prior to processing. Most importantly having done this, it is acceptable to store vehicles on a hard standing surface. Under some licence conditions providing there is no leakage of fluids, vehicles can be stored on hard standing prior to draining and treatment.

  Premature End of Life Vehicles (PELVs) processed under these conditions can usually be dealt with profitably, as the sale of the re-usable parts from these younger vehicles enhances the returns made on the metals recovered.

  Unfortunately over the last few years this has become less of the case for Natural End of Life Vehicles (NELVs), as whilst there is still a market for the metals recovered there is very little prospect of selling any significant volume of reclaimed parts.

  The situation has been exacerbated by the simultaneous rise in the costs of the disposal of fluids and tyres (resulting mainly from the collapse of the tyre remoulding industry) and the fall in value of recovered metals which has taken place with the decline of the UK metals industry.

  This is evidenced by the rising costs of disposal of abandoned vehicles and indeed the rising numbers of abandoned vehicles reported by Local Authorities. (NB in the mid 90s when metal prices were high and therefore ELVs were valuable, there were very few abandoned vehicles).

  The much more stringent treatment and storage requirements of the directive will obviously increase the costs of dealing with ELVs and will affect the profitability of all those who process these vehicles no matter what the mix of NELVs to PELVs. It has been calculated that the new requirements will add a cost of almost £40 per vehicle processed (annex 2).


  Although there are currently some requirements for recording details of vehicle destructions and volumes of waste handled, the scope of the data collection required under the ELVD will be considerably greater and will, we trust, be much more effectively policed.

  The requirement for computer systems in all Authorised Treatment Facilities and of course the staff able to operate them will obviously be a further expense for many existing operators.

  Under the existing system of deregistration there is a great deal of non-compliance on the part of the last owners of vehicles and so the current database of vehicles in use and their ownership is somewhat inaccurate. If a coercive strategy is used to force vehicles into the "new disposal system" then the costs of making this data accurate and pursuing the last owners of abandoned vehicles will be huge (Annex 3).

  Whilst there is an existing requirement to audit the waste into and out of licensed or registered metals recycling sites, these requirements are not motor vehicle specific. On implementation of the directive, the audit trial for vehicles and subsequently their component materials, will be much more stringent. Again this will involve greater operator costs and of course costs of the eventual monitoring body.


  Whatever system of assuring the recorded entry of ELV's into the permitted disposal system is adopted, it will have to be policed in a more effective manner that than currently available. This inevitably means increased costs both for operators and regulators. Arguably an incentive-based system will be less expensive to maintain, than one based on forced compliance.

  It will be necessary to ensure that all Permitted Treatment Facilities are maintained and operated to the necessary conditions and it is vital to the competitiveness of the industry that this is done to the same standard throughout the country. The regulating authority will need sufficient funds to ensure that unscrupulous operators are not able to short circuit the system and undermine both the Directive and those who invest to operate within it.


  It is important to recognise that to-date the waste vehicle stream has been handled by the metals recycling and dismantling industry without subsidy. There is obvious merit in the existing collection and disposal infrastructure. While nobody could claim the present system to be environmentally perfect, it has been remarkably effective over its many years of free market operation. The existing structure deals cost effectively with many of the tenants of the directive. It offers the best options for re-use of parts and materials and it naturally adheres to the "proximity principle" of treating ELV's at the point at which they arise.

  As Dr Paul Newenhuis of Cardiff University has pointed out "Vehicle dismantling is part of the solution . . . (Annex 4).*

  Tightening of the environmental standards within the ELV processing industry will obviously, involve all operators in substantial investment, but it is the ongoing costs of processing materials for which there is no significant recycling market that is of greatest concern. If materials such as rubber, plastic and glass are to be diverted from landfill, there needs to be support for their use as recycled products until such time as the markets mature. This responsibility should fall to the vehicle producers, who are the only economic operators with the power to significantly develop the demand for non-metallic automotive recyclates.

  Logic suggests that some responsibility for the recycling of a motor vehicle should also fall to the original purchaser, as they are introducing a new environmental liability at the time of purchase. At this point the disposal cost represents a very small proportion of the purchase price, whereas when the vehicle reaches the end of its life the disposal cost is large by comparison with its value or cost to the last owner.

  No matter how the responsibility for payment is eventually apportioned, it will be essential to ensure that funding is delivered directly o the ELV processors as they will be faced with the significant extra costs of operation at the point which vehicles enter the system.


  Annex 1  MVDA assessment of current ELV origination 19 January 2001.

  Annex 2  CARE submission to DETR 26 February 2001[1].

  Annex 3  MVDA paper: The need for effective arrangements for the disposal of ELVs 30 March 2001.

  Annex 4  Impact of the End of Life Vehicle Directive on the Motor Vehicle Dismantling Industry in the UK—Conclusions—Centre for Automotive Industry Research, Cardiff University*.

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