Select Committee on Trade and Industry Appendices to the Minutes of Evidence


APPENDIX 4

Memorandum by VALPAK

UK GOVERNMENT CONSULTANT PAPER ON DIRECTIVE 2000/53/EC ON END OF LIFE VEHICLES

INTRODUCTION

  Valpak is the largest UK compliance scheme for the packaging waste regulations (legislation introduced in the UK to comply with the EC's directive on packaging and packaging waste). Valpak has over 3,000 member companies from all industries and sectors in the packaging chain which constitutes a market share of around 55 per cent of all obligated companies. As far as the compliance market is concerned, we have a market share of around 65 per cent.

  Representatives from Valpak regularly meet with UK government officials, policy makers and other stakeholders to contribute to debates on packaging, waste electronics and other producers responsibility issues. Valpak is in a unique position in that we have knowledge of the processes involved in setting up the practical implementation of producer responsibility legislation in packaging and we are well positioned to use this experience and learning to comment on developments of this type of legislation for other waste streams.

  In this response we comment on the benefits and disadvantages associated with the proposed options in the End of Life Vehicles consultation paper, as well as illustrate areas which we feel should be addressed in detail.

INDIVIDUAL PRODUCER RESPONSIBILITY

  The paper suggests that producers may recover their own vehicles by putting in place adequate national collection systems of their own. Firstly, the term "adequate" would need to be closer defined in order to achieve a common and suitable standard for these new systems. However, any proposals to duplicate already existing infrastructure is likely to prove much more costly for producers. We believe that it would be more advantageous to contract with already existing facilities rather than set up new ones as, in this way, existing infrastructure would be utilised to its full capacity in the short term, and developed further in the long term. We have managed to achieve this in packaging which has resulted in significant cost advantages to UK industry compared to some other European Member States which have created a separate parallel infrastructure.

  An additional disadvantage of brand assigned recovery facilities is that there is an additional cost to the last owner of the vehicle because he would have to take the vehicle to a specific recycling centre for recovery which may not necessarily be the nearest one.

  The problem that would still need to be addressed though if producers were made responsible for their own vehicles' recovery is how they keep track of where their vehicles are recycled and how to count recovered vehicles to make up the national targets, especially if non-contracted facilities are involved in the recovery process. A single clearly defined point in the chain needs to be identified as the most practical stage to identify and count recovery.

  Identification of producers in a system where individual companies, including importers and distributors, can be made responsible to recycle will be very difficult due to the multiple of players. Car imports could be particularly problematic to trace especially where e-commerce and non-assigned distribution centres are involved. Putting in place separate requirements for domestic manufacturers, brand-assigned distributors, importers and small distributors is bound to complicate achieving compliance as well as enforcement.

  We believe that effective enforcement of legislation is a key to its success and in the best interests of responsible producers. Our experience in packaging has shown that without effective enforcement some obligated companies may delay their participation and compliance with the legislation thus putting a greater burden on those companies that do choose to comply with the law. Effective enforcement allows for a fairer distribution of responsibilities and obligations; and legislation is best enforced if it is as straight forward as possible to police. Compiling accurate data returns will also provide a challenge if all participants need to file their data with the regulator separately.

COLLECTIVE APPROACH

  Valpak expects that this approach would be likely to lead to the lowest compliance cost solution for producers. As suggested, manufacturers could discharge their responsibility individually or establish a collective compliance scheme. This type of approach, where producing businesses contract out the task of compliance to a specialist third party organisation, has been very popular with packaging producers with over 80 per cent of currently affected businesses choosing this route.

  The main advantages of a compliance scheme approach for producers are that:

    —  it provides them with immunity from individual prosecution for non-compliance;

    —  it enables businesses to outsource a complex task thus being able to continue to solely focus on their core capabilities;

    —  it achieves a lower total cost through economies of scale and shared expertise;

    —  it provides a collective voice on common issues.

  Collective contracts with treatment facilities would also have the advantage that their nature and operation would be easier to regulate as there are fewer operators.

CONTRACTUAL AGREEMENTS AND CERTIFIED RECYCLERS

  This approach appears more difficult to manage and Valpak would expect it to result in higher overall costs for producers.

  The disadvantage of going down the route of contractual agreements between producers and preferred recyclers would be:

    —  non-contracted sites which would also recover a certain proportion of ELVs would not necessarily benefit from direct funds. This seems to place them at a competitive disadvantage and does not seem appropriate as non-contracted sites would certainly contribute towards the achievement of national recovery levels. A separate funding system for non-contracted sites would therefore have to be agreed.

    —  The administrative and regulatory difficulties of having to identify all vehicles by brand in order to determine the amount each producer would have to pay to each site. This type of administration would have to be carried out by sites who have contracted with more than one producer as well as those who have not contracted at all.

  It would therefore seem more advantageous to allow all recyclers to take in all scrap vehicles. This would result in a more homogenous producer responsibility system similar to that currently in place for packaging. It would eliminate the need to identify scrap by brand and ensure financing is split fairly between all obligated parties. A broad system with accreditation for sites fit to treat and recycle, and where it did not matter which producer recovered what vehicle would certainly be less bureaucratic, easier to police and less prone to data problems.

  This option is likely to result in a higher cost to the end user who will have to find a facility for their own particular make of car which may not necessarily be the nearest or cheapest.

  It is difficult to assess how assigning a "green category" to cars would impact on production and subsequently on compliance. These protocols can be highly judgemental and factors determining "green" are currently unknown. It could be argued however that cars that are easier to recycle could be passed to shredders at a lower cost and thus discourage production of cars difficult to recycle as it will impact directly on the producer's cost of compliance.

POINT OF ISSUE OF EVIDENCE AND CERTIFICATES OF DESTRUCTION

  As said earlier, a single clearly defined point in the chain needs to be identified as the most practical stage to determine that a given tonnage of ELVs has been treated and that the resulting material has been sent for reprocessing. These businesses would issue the approved documents to certify this activity. Our learning from packaging is that the fewer sites requiring monitoring the better. The shredding stage, with relatively few sites to monitor, could represent the most practical point in the chain to achieve this. The issue of certificates of destruction would certainly be much more resource intensive where compliance had to be identified at brand level to ensure all products have been accounted for at the end of their life.

  There is certainly a need for immediate data capture of vehicles that have been recovered, not only for the purpose of notification to the DVLA, but also in order to ensure that timely and accurate information is available on vehicle recycling. Electronic as opposed to manual systems would certainly aid this process.

ORPHANED PRODUCTS AND HISTORIC CAR PARK

  The payment for the recovery of historic products will be an issue of much debate regardless of which option is chosen in the end. Without doubt, the cost will need to be apportioned in a way deemed "fair" to all industry participants. One key consideration should be that the system introduced should not put one producer at a competitive advantage over another.

  It appears to Valpak that the only realistic and practical option is to share costs by current market share. This is because this new legislation clearly imposes new costs of operating in the sector which has not generally been provided for by producers in previous years. It would not therefore appear to be fair or consistent with changes to other environmental of safety legislation to make it retrospective.

  Asking the final owner of a vehicle to meet the costs of recovery for vehicles scrapped between 2002-2006 could potentially make the abandoned vehicle problem worse and may not be considered "fair" by those affected. People who purchase "old" vehicles usually do this for economical reasons and would probably not be willing to contribute towards the recycling costs.

OTHER ISSUES

  In addition to a certificate of destruction a method of certifying the tonnage of vehicles produced and the tonnage of recycling achieved needs to be devised so that producers' performance against targets can be measured. There appear not to be any specific proposals in the consultation for how this should be achieved.

  The paper addresses the need for recovery facilities of vehicles to be accessible to consumers within a reasonable range. However, at a density of one collector within every ten miles (if England were square) we would need approximately 300 collection points. The currently low populated areas of Scotland and Wales would not be able to utilise these facilities to the full whereas others could exceed capacity. The decision of density of recycling plants should therefore not depend on how long a customer would need to drive to get to it but on population density.

  There is no mention in the consultation document what roles other economic operators such as Local Authorities, Insurance Companies, etc would play. The document also does not suggest how vandalised or abandoned cars and accident vehicles should be dealt with.

CONCLUSION

  Valpak remains open-minded about the most effective solution to deal with the implementation of the requirements set out by the European Directive on ELVs, but our experience in packaging has led us to the following key conclusions:

  1.  The definition and implementation of the adopted system should be industry led. That is to say by the vehicle producers (ie manufacturers and importers) as they have the responsibility for meeting the targets and associated costs as defined in the Directive. The recovery industry and other third parties need to be involved in the process but in a supporting role.

  2.  The chosen solution must build on existing systems. Re-inventing a completely new infrastructure could be very costly whereas using existing facilities would utilise all current capacity in the short term and build efficiencies in the long term.

  3.  Extensive bureaucracy should be avoided. We would not recommend duplicating the current packaging data submission system which has proven to be highly complex. Industry needs to develop a simplified data capture process, perhaps based more on standard masses and agreed protocols which would minimise the need for exhaustive data research and compilation by each individual producer. The system proposed should be flexible and allow producers to be able to recover other producer's vehicles in order to make up their target recovery tonnages.

  4.  A small number of compliance schemes or single scheme is a more efficient solution for the UK as a whole. The proliferation of packaging schemes has lead to the dispersion of efforts and a lack of efficient national planning.

  5.  We believe that effective enforcement of the legislation is key to its success and in the best interests of responsible producers.

  6.  We strongly believe in the use of progressive or staged targets that allow for progressive investment strategies and the ability to plan long term.

  7.  It is also important to ensure that the system introduced is deemed "fair" by consumers and does not increase abandonment.


 
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Prepared 6 December 2001