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Environmental Impact of End-of-Life Vehicles: An Information Paper

Environment Australia
2002
ISBN 0642547513


Getting ELVs into the recycling stream

Introduction

The environmental impacts resulting from current ELV treatment practices are discussed in the following chapters.

However, a key first issue is the extent to which ELVs enter the recycling stream at all - whether by regulation or market forces. It seems desirable to maximise the number of ELVs which reach recycling facilities, thereby reducing the number which are being inappropriately stored or disposed of.

While the majority of the 500,000 or more vehicles taken off the road each year in Australia are managed through the existing ELV recycling processes, it appears that a significant number are not.

Abandoned vs. Not Recycled

It is important to note that ELVs which do not reach recycling facilities are not necessarily vehicles which are "abandoned" in the environment. Most abandoned vehicles seem to eventually find their way to recyclers anyway, albeit often at a cost to local authorities (more on this below).

In reality, it is likely that the majority of vehicles which are not recycled remain with individual car owners or are stored elsewhere with the agreement of third parties.

Regulatory requirements governing ELV disposal

There appear to be no requirements specifically dealing with the manner in which end of life vehicles are disposed of, nor any regulatory requirements for ELVs to be disposed of through recycling facilities. However, new requirements for the treatment of "written off" vehicles are being progressively introduced in all States and Territories. In effect, this will constitute a type of formal "de-registration" requirement for this category of ELV.

Other than this, the last owner of a vehicle does not currently need to formally deregister a vehicle - in practice the owner either does not renew the registration, which then lapses, or cancels the registration to obtain a refund for the unused portion. It is not generally considered to be an offence for the owner to keep their own unregistered vehicles on their property. Councils may be able to invoke regulations if it is established that unregistered vehicles are being stored on private property in a manner which is causing a health or fire hazard, for instance, or a loss of amenity to other residents.

States and Territories generally can pursue last owners who improperly dispose of ELVs under anti-pollution or anti-littering legislation. However, this does not usually provide a solution where ELVs are dumped on private property with the landowners' consent.

A number of organisations consulted during the course of this study stated that the vehicle identification numbers, number plates and compliance plates are among the first items to be removed from improperly dumped vehicles. As a result, it is often impossible for local authorities to identify the owner of the abandoned vehicle in order to pursue legal recourse.

Key Finding

actors affecting the extent of ELVs being recycled

In the absence of regulated disposal requirements, key economic factors influencing the extent to which ELVs currently enter the recycling stream include:

Environmental Impacts of Improper Disposal of ELVs

The improper disposal of ELVs gives rise to the possibility of operating fluids (oil, petrol, brake and transmission fluids etc) and other potentially harmful materials to be released into the environment. Improperly stored vehicles and components may also cause other environmental problems, including visual pollution, disruption to watercourses, "ponding" of water, and result in vermin breeding etc.

In addition to the direct pollution impact, there could be a significant environmental cost due to the resource loss from the ELV not being recycled to extent possible or commercially viable.

Other Consequences of Abandoned Vehicles

Some states (Western Australia in particular) highlighted abandoned vehicles as being of broader concern. Local authorities often incur significant costs in retrieving and storing abandoned vehicles. Local authorities are generally required to store recovered vehicles for some weeks before disposing of them.

In some cases metal recyclers will retrieve car hulks abandoned in the environment at minimal or no cost - this seems to occur when the hulks are readily accessible, and where there are several in reasonably close proximity. However, when dumped vehicles are located in remote areas, or beyond the accessible verges of roads, local authorities often incur significant costs in retrieving the ELV and taking it to a point for collection by a metal recycler.

The issue of additional funding to meet the costs of retrieving dumped ELVs was raised during the consultant's stakeholder discussions. States and Territories have not introduced charges specifically addressing the costs of retrieving abandoned vehicles (eg. additional registration or other levies). This may in part be due to the need for consistency between jurisdictions. Western Australia suggested that the provision of a funding stream to meet these costs should be considered at a national level (eg. through a levy on new cars).

Littering is primarily a state and local government responsibility. Other than policing anti-littering laws, States and Territories generally have not actively pursued programs to increase the level of ELV recycling and reduce the incidence of abandoned vehicles.

As well as the costs to local councils, abandoned vehicles often result in costs to society through the fraudulent and illegal use of vehicle identification numbers/compliance plates etc. These are often taken from dumped vehicles and reused in stolen or rebuilt cars (a practice known as "rebirthing"). Removal of vehicle identification plates makes it very difficult to identify the owner of the dumped ELV, greatly hampering the effectiveness of anti-littering laws.

This issue is also of considerable concern to industry organisations including the Federal Chamber of Automobile Industries (FCAI) and the Motor Trades Association of Australia (MTAA), as well as state and territory authorities. They were strongly supportive of measures to better regulate ELV disposal so as to reduce criminality, lost vehicle sales and brand image degradation, which result from vehicle rebirthing.

The National Motor Vehicle Theft Reduction Council (NMVTRC) has been established as a joint initiative of governments and the insurance industry to implement a raft of measures aimed at reducing the incidence of vehicle theft.

As discussed further below, there is a convergence of interest between environmental objectives and the interests of the motor trades industry and enforcement authorities which may produce broad support for new measures to regulate ELV disposal. In particular, the NMVTRC is currently investigating the feasibility of a code of conduct for the auto dismantling industry to address the often unwitting trade in stolen vehicle parts, and is also examining options for insurance company practices and procedures to produce improved outcomes in the auto repair and dismantling industries:

Proportion of total ELVs currently being recycled

There are no firm statistics available quantifying the number of ELVs which make their way to recycling facilities and hence any estimates need to be treated cautiously.

International studies have similarly had difficulty in accurately estimating the number of vehicles that enter the recycling stream - although as a guide it has been frequently stated that:

In the United States, a country of roughly the same land mass as Australia albeit with a much greater population, various studies estimate that about 95% (eg. 5, p.26) or 90% (eg. 22, p.6) of vehicles eventually enter the recycling system. In Europe, it is estimated that "in certain Member States (of the European Union) up to 7% of end of life vehicles are abandoned in the environment" (9, p2).

It might be hypothesised that the number of vehicles that fail to be recycled would be higher in Australia, due to Australia's vast landmass and low population density. In regional and remote areas in particular, it might be expected that the lack of infrastructure and the distance to recycling infrastructure would lead to a lack of economic value in vehicle hulks.

It should be noted, however, that the metal recycling industry provides a valuable service in retrieving ELVs from even quite remote areas. As is the case internationally, the economic value of ELVs is generally sufficient to warrant the costs of collecting most ELVs. It appears likely that the returns are marginal - fluctuations in the international price of scrap metal may determine the extent of ELV collection - and so continuation of this service should not be taken for granted. It is important to recognise the significant role of the metal recycling industry in achieving current ELV recycling levels, and to avoid any measures that might adversely impact on the viability of current recycling efforts. A 1996 Australian study estimated that only 70% of scrapped cars are recycled (based on 1992 Federal Chamber of Automobile Industries (FCAI) data):

However, based on discussions during the course of this report it seems unlikely that 30% of ELVs are accumulating annually

APRAA estimates that auto dismantlers receive approximately 500,000 ELVs annually, with a roughly equivalent number exiting each year for metal salvaging. Of those, "competent" or "legitimate" operators handle approximately 80%. APRAA indicated that the figures were derived from registration and insurance company information and, although considered broadly indicative, should be treated with caution. The metal recycling industry expressed reservations about the quantities being discussed above.

Accordingly, in the absence of empirical data on the fate of ELVs, considerable caution should be exercised in the use of these rough estimates of ELVs entering the recycling stream.

Nevertheless, given:

It seems likely that that the proportion of ELVs entering the recycling stream is similar that estimated in other developed countries - ie. probably more than 90%.

The Economic Value of ELVs

The economic value of ELVs primarily arises from demand for recycled parts, and from the value of the metallic content to metal recyclers.

The scrap steel extracted from ELVs by metal shredders is worth roughly US$100/tonne CIF2 into the Korean steel mills, with the non-ferrous metals worth substantially more. However, substantial transport, handling and processing costs are incurred in realising these returns.

In some areas, metal merchants may pay a nominal amount for a car body (about $25). Firms removing car bodies in the ACT quoted charges of around $30. Free removal is offered by auto dismantlers where there is considered to be value in the car for parts.

It seems likely that there is sufficient economic value to cover most of the costs of collecting and transporting ELVs to shredding facilities. Metal recyclers stressed their efforts in retrieving ELVs from outside metropolitan areas. Several excursions may be undertaken each year to regional areas - travelling to centres beyond Cooktown in north Queensland and to the western border of the Northern Territory, for instance. One firm that travels to regional areas for car bodies estimates that around 1000 are retrieved annually from "the bush".

Vehicles are recovered from roadsides and private properties, and from other areas identified by local councils. Vehicles are loaded onto a portable crusher by a truck-mounted crane, and once compacted, numerous ELVs are transported at a time to the nearest capital city for shredding.

The frequency of the visits to country areas to retrieve car bodies is dependent on the fluctuating prices for recycled steel and the non-ferrous ELV metal fractions. This suggests there is a commercial incentive for the recycling of ELVs, including those located considerable distances from the shredder sites. However, the returns from these ELV retrieval activities may be marginal and it is important to ensure that this valuable service provided by metal salvagers is not jeopardised. For example, it might well be inequitable and counter-productive for any financial burden from new ELV measures to fall on the last handler of an ELV.

Nevertheless, the desirability of a more coordinated approach so that ELVs could be collected from single points was stressed by some stakeholders.

Where there are problems in regional areas, it is likely that improved co-ordination and co-operation between local councils and the metal recyclers could produce better financial and environmental outcomes. In particular, the aggregation of supply of ELVs by councils, or more broadly at a regional or even State level, could lead to the negotiation of better arrangements with the metal shredders. These arrangements could incorporate (or offset) the cost of retrieving less accessible, abandoned ELVs. Better management of the supply of ELVs by local authorities could be achieved through the provision of central ELV drop off points. Alternatively, consumers with an ELV could register the location with the local authority. Organising and simplifying the collection of ELVs would increase their value to metal recyclers - and provide greater negotiating power for local authorities.

Key Findings

Maximising the number of ELVs entering the recycling stream

It is important to ensure that it is as easy as possible for the last owner to properly dispose of ELVs.

From initial discussions with stakeholders, there may be a case for better provision of information to vehicle owners about the appropriate disposal of ELVs - eg. the dissemination of leaflets with registration notices by State/Territory registration authorities. There might also be merit in facilitating collection and drop-off points for ELVs.

While kerbside recycling has provided a simple solution for consumers to increase recycling of general household waste, there generally are no consumer-friendly solutions to the recycling of most consumer products. Combining ELVs with other end of life consumer products is also likely to increase the commercial viability of reuse and materials recycling through improved economies of scale.

Given the value of ELVs to metal recyclers, better organisation of the supply of ELVs by local authorities to the recyclers offers the potential to at least partly offset the current costs of retrieving the more inaccessible, abandoned wrecks.

APRAA indicated support for an arrangement whereby a requirement would be placed on the last owner to formally deregister ELVs, leading to their proper de-pollution and parts recycling at accredited auto dismantlers, perhaps akin to the new European requirements (Ref. 8). A regulated approach such as this would require cooperation between all State and Territory registration authorities but would probably optimise the number of ELVs entering the recycling stream, and produce flow on benefits for the regulation of environmental practices at recycling facilities.

This is discussed further in Chapter 10.

Key Finding