Automotive Industry Trends

Motivations for recycling: a look at all the issues

Issue Table of Contents

The Nature of Automotive Recycling Motivations for recycling: a look at all the issues Automotive Shredder Residue: The final mile in automotive recycling Automotive Recycling Standards and Related Publications

As more cars move on to the road, the importance of recycling rises. Reductions in landfill space, government regulations, and customer sensitivity to green issues are just some of the reasons why automakers stay involved in recycling. The buying power of the automotive industry exerts great influence on its’ supply chain, providing motivation to vendors and suppliers to help solve issues of recycling and reuse. The resulting market is large - according to the Arizona Automobile Recyclers Association, automotive recycling is the 16th largest industry in the United States, with more than $5 billion in annual sales. But motivations to recycle are more complex than they may seem.

Regulations
One strong motivator, of course, comes from mandated industry recycling regulations. Governments around the world are increasing pressure on automakers to recycle more.

In 2000, the European Union passed the ELV Directive, governing minimum recycling rates. The law states that auto manufacturers must take responsibility to collect vehicles at end-of-life and dispose of them in a responsible manner. This responsibility mandates automakers to recover a great percentage of the vehicle to prevent it from ending up in the solid waste stream. ELV requires manufacturers to recover 85 percent of each vehicle by 2006, and 95 percent by 2015. By 2007, manufacturers must take on the full financial responsibility of disposal for end-of-life vehicles.

Regulations in Japan call for a material recovery rate of 88 percent by 2005 and 95 percent by 2015. Recovered materials do not necessarily need to move back into the automotive production supply chain exclusively, but Japan encourages automakers to do so.

Though regulations in the United States are not as stringent, US manufacturers still respond because they must meet overseas regulations. All of the newer regulations, plus many of today’s voluntary programs both in the United States and elsewhere, build on the concept of Extended Product Responsibility (EPR). EPR moves a manufacturer’s responsibility beyond the manufacturing stage to the full life (and end-of-life) of a product. EPR is not the law in the United States, but there is a motivation for automakers to participate in voluntary recycling and take-back programs that follow an EPR model. By participating now, the industry provides a disincentive for the government to enact strict, mandatory regulations that would be more expensive and more complicated to implement.

Green issues
Concern for the environment also spurs automaker involvement, as their participation is important to principles of corporate stewardship and provides public relations benefits as well. Automobile recycling reduces the waste stream, decreasing the amount of space required to dispose of automotive waste. Every year, the automobile recycling industry recycles more than 11 million automobiles, buses, motorcycles and trucks, which diverts an estimated 85 million barrels of oil that would otherwise be used in the manufacture of new or replacement parts. As well, the industry along with its vendors and suppliers, works to reduce the waste stream in the production of new vehicles.

Certain hazardous materials, manufactured into car parts, get special attention because of their human health risks. Mercury switches, commonly used in car lighting, require special handling at end-of-life. Auto recyclers, depending on state and local regulations, must provide proper disposal of these switches when dismantling vehicles. The EPA also requires an accurate paper trail of mercury removal and disposal because of the liability and serious health risks posed by mercury exposure.

Just this past February, a judge upheld a Maine law requiring automakers to pay $1 bounties to junkyards and scrap dealers for every mercury switch brought to a mercury consolidation center. The law also makes automakers set up collection centers, and holds them responsible for shipping the mercury switches to recycling centers.

Economic incentives
Though end-of-life recycling seems to put a great burden on automakers, there are cost benefits, especially under the EPR model. As the amount of landfill space shrinks, costs for solid waste disposal rise. By reducing the amount of solid waste they need to dispose, automakers avoid paying higher land disposal costs.

Advances in materials recycling can make it financially attractive to use recycled materials. Some recycled plastics available today cost less than comparable virgin materials, reducing production costs for manufacturers. According to the Environmental Protection Agency, the biggest incentive for manufacturers to use a recycled product occurs when that product acts as a one-to-one substitute for virgin material, delivers equal or higher quality than the virgin material and costs the same or less. Some types of plastic automobile bumpers fit this criterion and are in use today.

To facilitate recycling efforts along the EPR model, some automakers keep in mind the disassembly of their product during product design. By making valuable parts easy to disassemble, recyclers reduce their costs, increasing margins on recycled and refurbished parts.

The future
New research into end-of-life recycling hopes to strike a balance between recycling and other environmental priorities in part design. This philosophy, called Life Cycle Assessment (LCA), looks at part design as more than an end goal of how the part works with other parts. LCA wrestles and weighs every stage of the life cycle, taking into consideration the impact on humans and the environment, the resources used or depleted during manufacturing, waste management and end-of-life disposal.

The industry will need to make greater strides in Automobile Shredder Residue (ASR) and plastics recycling to get recycling levels beyond 85 percent, since cars built today increasingly contain more plastic than metal. Comprising 25 percent of every vehicle, ASR waste remains a difficult issue. Regardless, researchers, automakers and recyclers have the necessary incentives to push forward towards new answers and new technologies for auto recycling.¹