Solutions for the End-of-Life Vehicles (ELV) recycling sector

Professional organisations are worried as the future of independent ELV collection and processing centres, duly approved by the State, seems to be called into question, because of pressure from car manufacturers

Easra experts

5/19/20234 min read

The ELV recycling sector is faced with a reform in France, currently being developed, the compatibility of which raises a problems with European priorities, in particular those of the revision of Directive 2000/53/EC; professional organisations are worried as the future of independent ELV collection and processing centres, duly approved by the State, seems to be called into question, because of pressure from car manufacturers.

The National Automobile Federation (FNA), is a representative organisation of automotive professionals since 1921 in France, which supports craft businesses in the automotive sector and mobility services on a daily basis. The Federation would like to thank the European Commission for being invited to communicate the challenges and the major problems of ELV centres in France, including the reflections and claims developed below. FNA representatives point out that these views are the fruit of intensive awareness raising campaign and deserve to be taken into consideration by the team responsible for contributing to the revision of Directive 2000/53/EC.

What is French law n°2020-105 of February 10, 2020 aout ? This law is related to the fight against waste and the circular economy provides for the establishment of an eco-organisation or individual systems for the recycling sector regarding ELVs on January 1, 2022. Operators duly approved by the State will have to have contracts with eco-organisations or individual systems owned by car manufacturers to carry out operations for ELVs. The manufacturers' extended liability, which the law seeks to strengthen, may come under their control: their liability would be subject to their best conditions, since the VHU centres affiliated by car manufacturers will not be able to negotiate anything; they will undergo advantageous financial conditions for the manufacturers and not at all in line with the real cost of ELV centres.

Why penalise the ELV sector, whose operation is nevertheless efficient ?

The recycling sector has 1,700 approved ELV centres in France. They fear a loss of autonomy and additional costs. The reform currently being prepared in France tends, in fact, to make ELV centres dependent on car manufacturers. The sector has already been operating since 2006 under the principle of extended producer responsibility (EPR): manufacturers, distributors or importers who market products that generate waste must take responsibility, in particular financially, for the management of this waste. This is the reason why some recycling centres belong to car manufacturers. However, some ELV centres are made up of completely independent small and medium-sized companies whose management is regularly welcomed with satisfaction and renewed approval is given by the State. For the smallest ELV centres, financial balance is essential to the territorial network to which they contribute. It is crucial that the European Directive strengthens the responsibility of Member States in maintaining a sufficient network of ELV centres. It seems dangerous to entrust this public service mission to groupings of centres. The independent sector of ELV centres is important in France. The risk of a lack of supply in the collection of ELVs is not neutral. The EU Directive should take into account the role played by low-volume ELV centres. While the current centres are approved by the State, they now have no certainty of continuing their activities, due to the reform currently being discussed in France.

Unlike the tire, light bulb or battery industry, the French ELV industry is self-managed and self-financed, without depending on a central body. It is entirely managed by vehicle collection and processing companies, which internalise revenues and expenses; they take development and investment initiatives without financial consequences for the last owner of the vehicle. The specificity of ELVs, unlike other waste, lies in the fact that they cannot be collected in recycling centres but only within the framework of business relations. A very large majority of the turnover of ELV centres comes from a takeover offer proposed by an insurance company with which the ELV centre has an agreement or following a call for tenders. In this case, the VHU centre becomes the owner of the vehicle and also pays the agreed price of the vehicle and any storage costs. This source of supply is predominant. What future for these contractual relations, if from now on car manufacturers obtain total control over the recycling of ELVs ? The major challenge for ELV centres is therefore to retain ownership of materials and parts from the circular economy, in order to contribute to the balance and economic performance of the sector.

Recycling figures are in line with the targets set by the European Union. However, the recycling rate is calculated on vehicles that enter an approved ELV centre. This is the case for the 1.1 million ELVs out of the 1.8 million annually. About 700,000 vehicles escape the legal process. Also beyond their control are parts which have been changed during the life of vehicles and the disappearance of wrecks. Consequently, one of the first missions of eco-organisations would be to take measures to combat this escape from end-of-life vehicles.

To this end, the establishment of an eco-contribution with the purchase of the vehicle would give more resources to the legal sector to capture more ELVs. The objective is to preserve what currently works and make adjustments to guarantee the achievement of objectives and the economic balance of the sector. Several questions need to be answered in line with the priorities defined at European level, in particular the following:

  • How could setting up an eco-organisation help to fight against the illegal sector ?

Failing to benefit from police powers to sanction illegal owners or illegal sites, setting up an eco-organisation alone does not solve the problem. It needs a high-performance sector to take charge of the usual collection and processing operations, which should increase if this eco-organisation plays the logically devolved role of communication and awareness raising with consumers and support for ELV centres. In this respect, consultation with the sector would help to set up a return bonus for the last owner of the vehicle, as this solution has worked outside the borders.

     Rather than penalising ELV centres, it would be necessary to define what is the financial cost that car manufacturers have to assume as part of their extended liability ?

The Directive's evaluation report published by the European Commission shows that overall, car manufacturers bear around 12% of the costs linked to end-of-life recycling, despite the existence of the 2018 Directive which imposes on producers a financial contribution for at least 80%. The establishment of an eco-organisation or individual systems should then become a tool to rebalance the economy of the sector thanks to a better sharing of costs in accordance with European provisions.