EXTENDED PRODUCER RESPONSIBILITY IN THE AUTOMOTIVE INDUSTRY: EUROPEAN INITIATIVES

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EXTENDED PRODUCERRESPONSIBILITYIN THE
AUTOMOTIVE INDUSTRY EUROPEAN INITIATIVES
GARY A. DAVIS CENTER FOR CLEAN PRODUCTS AND CLEAN
TECHNOLOGIES UNIVERSITY OF TENNESSEE Extended
Producer Responsibility and the Automotive
Industry Windsor, Ontario February 21, 2001
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CENTER FOR CLEAN PRODUCTSAND CLEAN TECHNOLOGIES

• MISSION to develop, evaluate, and promote
  cleaner products and cleaner technologies that
  prevent pollution at the source and contribute to
  long-term sustainable development.
• GOALS
• assist producers and other stakeholders in
  cooperative efforts to design and redesign
  products
• develop tools and databases
• assess and formulate policies to encourage
  the use of cleaner products
• INFORMATION www.cleanproducts.org

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EXTENDED PRODUCER RESPONSIBILITY

• Extended Producer Responsibility is the principle
  that manufacturers of products bear a degree of
  responsibility for the environmental impacts of
  their products throughout the products life
  cycles, including upstream impacts inherent in
  the selection of materials for the products,
  impacts from the manufacturers production
  process itself, and downstream impacts from the
  use and disposal of the products.

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ATTRIBUTES OF EPR

• Extends up and/or down the product chain
• Focuses on the product system, not just the
  production facility
• Shared and overlapping responsibilities among
  actors along the product chain

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AUTOMOBILE LIFE CYCLE
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AUTOMOBILE LIFE CYCLE SOLID WASTE GENERATION
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END OF LIFE MATTERS
THE AUTOMOBILE IS HIGHLY RECYCLED, BUT
2.5 to 3.0 million tons of auto shredder residue
(ASR) are disposed of in solid waste landfills
each year in the U.S. (context 208 million tons
per year of municipal solid waste generated in
1995)
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CURRENT ELV MANAGEMENT IN THE AUTOINDUSTRY
REMANUFACTURERS
AFTERMARKET PARTS
PARTS SUPPLIERS
DISMANTLED PARTS
SALE/LEASE OF CAR
DISMANTLERS
OEMS
DEALERS
USERS
CAR
CAR
PARTS
MATERIALS
MATERIALS SUPPLIERS
SUPPLY PARTS
DIRECT REUSE
MATERIALS RECYCLERS
SHREDDERS
OTHER MARKETS
ASR
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ELV INFRASTRUCTURE IN NORTH AMERICA

• 10,000 dismantlers
• Parts remanufacturing is 7 billion industry
• 200 auto shredders
• 120 Electric Arc Furnace Mini Mills, 37 of scrap
  is automotive

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ELV Policies in Europe

• European Union
• ELV Directive adopted Sept. 2000 implementation
  by 2002.
• Sweden
• Legislation adopted to make vehicles at least 85
  recyclable
• The Netherlands
• 86 recycled by 2000 (accomplished in 1997)
• Auto Recycling Nederland set up to manage ELVs

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Vehicle EOL Goals and Policies - Countries

• Germany
• Agreement between automotive industry and
  government in 1994.

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EU ELV DIRECTIVE

• Elements of Directive
• Producer responsibility for ELV management costs
• Phase outs of toxic substances
• Enhanced reuse and recycling
• Improved environmental standards for ELV
  management
• Other provisions

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ELEMENTS OF EU DIRECTIVE PRODUCER RESPONSIBILITY

• Producers responsible for costs of recycling cars
  put on market after July 2002.
• After 2007, producers responsible for costs of
  recycling all cars without regard to date of
  production.
• Incentive for last owners to deliver for
  recycling recycling certificate to relieve from
  costs of registration

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ELEMENTS OF EU ELV DIRECTIVETOXIC SUBSTANCE
PHASE OUTS

• Lead, mercury, cadmium, and hexavalent chromium.
• Cars put on market after July 1, 2003.
• Exemptions for certain uses of substances (e.g.,
  lead-acid batteries, mercury in headlamps)
• Process for revisiting exemptions

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ELEMENTS OF EU ELV DIRECTIVEENHANCED REUSE AND
RECYCLING

• By Jan. 1, 2006 Increase reuse and recovery to
  85 by weight on average, reuse and recycling to
  80.
• By Jan. 1, 2015 Increase reuse and recovery to
  95 by weight on average, reuse and recycling to
  85.
• By 2005 Cars put on market must be 95 reusable
  and recoverable, 85 reusable and recyclable.

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ELEMENTS OF EU ELV DIRECTIVEENHANCED REUSE AND
RECYCLING

• Definitions
• Reuse--any operation by which components of
  end-of life vehicles are used for the same
  purpose for which they were conceived
• Recycling--the reprocessing in a production
  process of the waste materials for the original
  purpose or for other purposes but excluding
  energy recovery.
• Recoveryincludes the use of combustible waste as
  a means to generate energy through direct
  incineration with or without other waste but with
  recovery of the heat.

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ELEMENTS OF EU ELV DIRECTIVEENVIRONMENTAL
STANDARDS FOR REUSE AND RECYCLING

• New standards being developed
• Permits, inspections required
• Hazardous materials removed before shredding
• Impermeable surfaces for storage
• Removal of batteries, air bags
• Removal of recyclable components.

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ELEMENTS OF EU ELV DIRECTIVEOTHER

• Parts coding for reuse, recycling.
• Producers provide dismantling information for
  cars within 6 months after putting on market.
• Design for Recycling language but no requirements

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ELV Goals and Policies - Companies (Recyclability)

• Daimler-Chrysler
• 85 recyclable by 2002
• 95 recyclable by 2005
• GM
• 90 technically feasible recyclable vehicle by
  2001
• Ford
• Increase recyclability to 95
• Mazda
• 90 recyclable by 2002

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ELV Goals and Policies - Companies (Recycled
Content)

• Daimler Chrysler
• Plastic parts 20 by 2000 30 for 2002 and
  beyond
• Aluminum 25 by 2002 30 by 2010
• Ferrous 35 by 2002 40 by 2010
• Other At least 25
• Other includes rubber, liquid chemicals, and
  glass
• Ford
• Plastic parts 20 recycled content

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PRODUCER RESPONSESFORD

• Acquiring remanufacturing, recycling businesses
  in North America and Europe (over 30 companies)
• Goal to have over 1 billion in sales
• Position to respond to ELV Directive

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ENVIRONMENTAL BENEFITS OF REMANUFACTURING

• SIGNIFICANT REDUCTIONS IN MANUFACTURING
  ENERGY--REMANUFACTURED ENGINES REQUIRE 80 LESS
  ENERGY (IRON AND STEEL), gt90 FOR ALUMINUM
• SIGNIFICANT SAVINGS IN MATERIALS USE
• REDUCTION IN USE OF PROCESSING CHEMICALS, SUCH AS
  DEGREASING, MACHINING FLUIDS
• REDUCTION IN USE OF CASTING SANDS AND RESINS

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PARTNERSHIPS FOR REMANUFACTURINGIN THE AUTO
INDUSTRY
REMANUFACTURERS
AFTERMARKET PARTS
PARTS SUPPLIERS
DISMANTLED PARTS
SALE/LEASE OF CAR
DISMANTLERS
OEMS
DEALERS
USERS
CAR
CAR
PARTS
MATERIALS
MATERIALS SUPPLIERS
SUPPLY PARTS
DIRECT REUSE
MATERIALS RECYCLERS
SHREDDERS
OTHER MARKETS
ASR
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PARTNERSHIPS FOR REMANUFACTURINGIN THE AUTO
INDUSTRY
REMANUFACTURERS
MATERIALS RECYCLERS
MATERIALS SUPPLIERS
SALE/LEASE OF CAR
PARTS SUPPLIERS
OTHER MARKETS
OEMS
DEALERS
USERS
CAR
CAR
PARTS
MATERIALS
SUPPLY PARTS
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THE GREEN LEASE

• Providing product function or service without
  transferring ownership of the product or
  materials
• Dematerializes the function
• Remanufacturing instead of recycling
• Xerox copy machines

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CAR IS THE MOST LEASED CONSUMER PRODUCT
LEASE PENETRATION RATES
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OEM INVOLVEMENT IN REMANUFACUTING
PARTS SUPPLIERS
THE GREEN LEASE
OEMS DOING REMANUFACTURING
DEALERS
USERS
CAR
CAR
PARTS
MATERIALS
MATERIALS SUPPLIERS
SUPPLY PARTS
SCRAP PARTS
MATERIALS RECYCLERS
OTHER MARKETS
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BENEFITS OF EPR FOR AUTO WORKERS

• OEM involvement in end-of-life vehicle management
  could raise skill level of workers necessary
• Remanufacturing is labor intensive instead of
  capital or material intensive
• Remanufacturing by OEMs could create/preserve
  jobs in assembly plants
• Implementation of producer responsibility in
  North America can preserve competitive position
  with respect to European and Japanese
  manufacturers