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
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
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
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
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
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 UKConclusionsCentre
for Automotive Industry Research, Cardiff University*.
1 Not printed. Back