Dr Hodecek, the corona crisis broke out around five months ago. How hard did the pandemic hit end-of-life vehicle recycling companies?
The drop in the number of units processed differed from one country and region to the next, but we expect to see an overall contraction of 25 to 30 per cent for 2020. Worldwide, however, we forecast a decline in the car market of around 18 per cent for the full year.
Economists are now predicting a long-term economic upswing. How do you see the situation?
Yes, I quite agree. But that is unlikely to be true for all the products and services we need in daily life. Where are consumers most likely to save money in times of crisis? On holidays and on items used long-term in everyday life, such as cars. In other words, in 2020 and the following years, we are likely to see fewer end-of-life vehicles being scrapped because consumers will be inclined to postpone investing in a new vehicle. This fact is compounded by the current uncertainty regarding the future of electric mobility. Assuming electric mobility continues to gain in popularity and becomes established, how well are end-of-life vehicle recyclers prepared to process battery-powered cars?
Automobile recycling companies are currently preparing themselves to handle the growing number of battery-powered vehicles. In order to do so they need special training, particularly when it comes to dealing with high-voltage components and fire protection issues. The recycling facilities and temporary storage areas also need to be re-equipped to handle this type of vehicle, partly due to the increased fire hazard. However, a separate waste code for these types of vehicle is required in the European waste catalogue. Currently, the recycling rates contained in the ELV Directive depend on the weight of a vehicle. However, as the battery accounts for around 30 per cent of the total weight of these vehicles, different recovery (and collection) rates need to be defined for battery-powered vehicles than those generally used for conventionally powered models. A new and above all extended producer responsibility (e.g. product labelling, ecodesign, minimum recycled content, etc.) and/or the responsibility of vehicle importers for these battery-powered vehicles also needs to be considered and legally enshrined in the EU’s new ELV Directive.
One of the main criticisms regarding the current practice of disposing of end-of-life vehicles, however, has always been their illegal export. Has the corona crisis done anything to change this problem?
No, it hasn’t. Vehicles are still being exported illegally. Only the number of units has fallen in line with the drop in the number of vehicles designated for scrapping. The structures of these illegal activities have not changed in the wake of the corona crisis. The illegal trading and exporting of these vehicles therefore needs to continue in order to finance these criminal organisations.
How great is the damage to end-of-life vehicle recyclers as a result of illegal exports?
Within the EU, around six million end-of-life vehicles are dismantled, shredded and recycled in some 13,000 approved plants each year. Nevertheless, the whereabouts of a further 3.4 to 4.7 million end-of-life vehicles per year remains unexplained, which means the EU is losing out on at least four million tonnes of raw materials per year. These include steel, aluminium, plastics and also catalytic converters, which contain highly valuable metals such as rhodium or palladium. One single catalytic converter alone is worth 40 to 80 euros. A considerable number of these end-of-life vehicles is probably being either illegally recycled or exported as “used cars”. Added to this is the loss of material values as well as jobs and the inefficient capacity utilisation of systems and plants built to meet European standards.
What needs to happen to stem the tide of illegal exports in the long term?
The European Commission (EC) is currently working on an amendment to the European End-of-Life Vehicles Directive, which then needs to be implemented in national law by all EU member states. Due to the “unexplained whereabouts” of an immense number of end-of-life vehicles, the following three measures urgently need including in the amendment of the ELV Directive:
- Vehicle registration law is an important starting point. Two standardised methods of deregistering a vehicle are needed throughout the EU: The permanent (final) deregistration and the temporary deregistration. The latter needs to be valid for a limited period of time only (e.g. one year) and should be linked to a fee. This strategy will guarantee that any change in the ownership of the vehicle in question (last owner of vehicle) is documented. In turn, a final deregistration needs to entail the mandatory presentation of a certificate of disposal from a company authorised to recycle vehicles. If a vehicle that has been permanently deregistered is to be exported, a repair certificate must be presented to confirm that the vehicle is not a “wreck” but is in a repairable condition (see below). Furthermore, it should be made compulsory to notify the vehicle’s re-registration in the importing country. This requires an EU-wide standardised and linked vehicle registration database, which shouldn’t be too difficult to implement in this age of digitalisation.
- Another important point is to make a legal distinction between a used vehicle (i.e. not waste) and an end-of-life vehicle (i.e. waste). In 2015, the Austrian Supreme Administrative Court already issued a landmark ruling in this regard: A vehicle is to be classified as a “used vehicle” if its suitability for registration, operational readiness and intended use (as a vehicle for transporting people or goods) can be restored by means of a cost-efficient repair. A repair is considered cost-efficient if the repair costs do not significantly exceed the current value of the vehicle in question (e.g. according to the Eurotax list).
- In addition to recycling rates, the amended ELV Directive also needs to provide for mandatory minimum collection rates in future, which would put an equally effective stop to illegal exports.
