Opinion of the Economic and Social Committee on the 'Proposal for a Council Directive on end of life vehicles` () (98/C 129/10)

On 2 December 1997 the Council decided to consult the Economic and Social Committee, under Article 130s of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Protection of the Environment, Public Health and Consumer Affairs, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 3 February 1998. The rapporteur was Mr Colombo.

At its 352nd plenary session (meeting of 25 February 1998), the Economic and Social Committee adopted the following opinion by 85 votes to one with one abstention.

1. Outline of the proposal

1.1. This ambitious and innovative proposal has its legal basis in Treaty Article 130s. It follows the example of the directive on packaging waste in setting target figures, and will affect a sensitive sector of the European economy, namely the motor industry. It proposes the adoption of a preventive approach for a specific waste stream requiring intervention throughout the product's life-cycle right from the design and production stages, and strict adherence to a hierarchy of waste management principles favouring re-use and recycling (recovery of materials).

1.2. The 'producer responsibility` principle adopted in the new Community strategy for waste management () is to be put into practice by obliging all companies operating in the sector to set up an appropriate system for recovery and disposal, with re-use and recycling targets to be met within specified time-limits.

1.3. The system will be completed by a 'certificate of destruction`, issued only by authorized treatment facilities, which will be required for deletion of vehicles from national registers (Article 5).

1.4. The vehicles to be scrapped will have to be handled in accordance with the general provisions laid down in Article 4 of Directive 75/442/EEC and the list of decontamination requirements and technical provisions in its Annex (Article 6). Progressively higher targets for the rates of re-use, recovery and recycling are to be reached by 2005, 2015 and a date beyond 2015 yet to be determined (Article 7). It will be the responsibility of vehicle producers to design and manufacture their products in ways that will make these targets easier to achieve.

1.5. To add legal weight to this switch in production, the Commission proposes [Article 7(4)] amending Directive 70/156/EEC so as to introduce re-usability and/or recyclability requirements for vehicles put on the market after 1 January 2005.

1.6. The Commission considers that although the voluntary agreements in operation in certain Member States show that such measures are feasible, they provide no legal certainty and leave the way open for unfair competition, encouraging the export of waste to areas with less stringent requirements. For this reason the Commission proposes a European directive, which combines regulatory instruments with the 'producer responsibility` principle.

2. General comments

2.1. In the light of its recent own-initiative opinion on voluntary environmental agreements () the Committee endorses the Commission's decision to opt for a directive, in order to ensure a harmonized reference framework that is valid in all Member States. The Committee also endorses the environmental objectives being pursued and the content of the proposal subject to the comments which follow.

2.1.1. The Committee also recommends close study of the many existing agreements, and of the regulations already in force in some Member States (notably Sweden), in order to make the most of the practical experience acquired and incorporate it in the legal provisions where possible. To ensure that the objectives are achieved, it will be necessary to draw on the voluntary agreements already reached in some Member States, in order to apply their positive results more widely and avoid any remaining shortcomings.

2.2. The combination of legal obligations, monitoring procedures and economic measures should be more clearly set out, to ensure that the flexibility granted to Member States does not create unfair competition in this key economic sector. At the same time, the responsibilities of the various parts of the chain need to be defined more clearly, distinguishing between prevention and final treatment.

2.3. In its opinion on the review of the Community strategy for waste management (), the Committee singled out the directive on packaging waste as a good example of practical application of the producer responsibility principle, and called for this approach to be extended to other goods and other types of waste (points 2.13 and 2.14), identifying the priority waste streams. The Committee is aware that some Member States are still having difficulty in transposing the directive, but feels that the exercise has been worthwhile.

2.4. Waste from discarded vehicles differs from packaging waste, which comes from a variety of sources and involves materials (glass, paper, plastic etc.) that present differing treatment and recycling problems and are disposed of individually at the end-user stage, making it more difficult to determine responsibilities at each stage in the product life-cycle. End of life vehicles, in contrast, are a more homogeneous sector, within which solutions have to some extent already been found insofar as around 75 % of the vehicle in terms of weight (i.e. the metal parts) is already used as scrap metal for melting down; there remains the question of the risks caused by heavy metals and other hazardous substances such as halogen compounds which contaminate the scrap metal sent for recycling in the steel sector. For the remaining 25 % of the vehicle weight, which mainly consists of plastics and elastomers, a satisfactory solution still has to be found because only part of this waste flow is sent for recycling, and even then this is done in only a few countries. The bulk of this waste is still incinerated or landfilled, both of which damage the environment and waste raw materials and energy.

2.5. There are also organizational problems in the disassembly and demolition sector. The sector needs to be streamlined and modernized so that it can manage end materials in an environmentally responsible manner and ensure that the vehicle body is made safe and that the hazardous substances are disposed of properly. In many countries, this sector is made up of small and medium-sized firms; these must be safeguarded, and their professional standing improved. Pilot schemes have been conducted in a number of countries, with the assistance of the motor industry and in agreement with the public authorities, to modernize the sector in line with the new requirements. Such schemes should be extended, in accordance with the special circumstances in each Member State, by releasing the resources needed for training the staff involved and for adapting SMEs so that they meet environmental requirements.

2.5.1. In order for disassembly and demolition businesses to develop ecologically sound processing methods, in addition to ad hoc support and monitoring measures, there is also a need for specialized, suitably trained operators. Some crafts chambers (Saarland-Lorraine-Luxembourg) already provide training courses in this field; these could be used as a model for devising a European qualification which should be as uniform as possible.

2.6. Existing schemes have thus shown that the recovery and recycling objectives set out in the directive are pursuable provided that the need to reduce waste and increase recycling possibilities is catered for right from the vehicle design stage (though it goes without saying that safety features should not be compromised by this). This means designing the vehicle so that it is easier to dismantle and so that parts and materials can be more easily recovered, drawing up dismantling manuals, affixing a distinguishing mark to plastic components, and gradually reducing the amount of heavy metals and other hazardous substances. All this will also help to upgrade the work of demolition and scrap-metal yards by rationalizing and reorganizing the job of reclaiming and dismantling vehicles and separating their components.

2.7. Hence responsibilities have to be shared between design, production and end treatment, inter alia so as to ensure outlets for the recycled raw materials, part of which can be used by manufacturing industry.

2.8. In the interests of shared responsibility, equal attention must be given to the consumer. Information supplied by the producer, and perhaps incentives, could encourage prospective buyers to be more environmentally aware in their purchasing decisions. During the vehicle's life cycle, the owner should be encouraged to see that it is properly maintained inter alia with a view to its ultimate recovery. Lastly, at the end of the vehicle's life, the owner must be guaranteed access to effective and reasonably local demolition plants.

2.9. The possible 'negative market value` of an end of life vehicle is equal to the difference between the cost of end treatment, with due respect for environmental protection standards, and the proceeds from the reusable and recyclable materials. This value will depend not only on design (which the producer can gear more to recovery and recycling), but also on the care taken by its owners, and the ability of the scrap metal sector to make use of the re-usable parts and recyclable materials. Insofar as all the players involved take their fair share of responsibility, and the sector - as is already occurring - designs vehicles in a way which facilitates recovery and recycling, the problem of negative market value mentioned in Article 5(4) is then minimized. The establishment of a network of authorized treatment plants and the obligation to obtain a certificate of destruction will encourage the end treatment sector to modernize and extend its activity, making it more profitable.

2.10. It must also be recognized that calculating the negative value of an end-of-life vehicle is difficult because the value may vary according to the local markets and degree of development of the demolition, scrap metal and recovery sectors in the different Member States. Its worth as an incentive will also depend on whether it applies to vehicles which are already in circulation (and will reach end of life within the next eight to ten years) or to newly designed vehicles not yet on the market, whose design can be geared to recycling through the deployment of economic measures.

2.11. The Committee therefore thinks that the negative value problem needs to be addressed in greater detail, bearing in mind the variety of situations and causes. Measures should be based on the principle of shared responsibility and internalization of environmental costs, and should encourage the modernization of the end treatment sector and the achievement of higher objectives for the re-use, recycling and recovery of end of life vehicles, while also prevailing on producers to design recyclable vehicles.

2.12. Once the regulatory framework has been established, careful consideration will have to be given to the problems listed below, for instance by using voluntary instruments for sharing responsibility between the parties and by stepping up dialogue between producers' associations and final treatment plants, in order to:

- ensure that the financial responsibility placed on the producer really does stimulate a policy of prevention, so that the negative value is not simply transferred to the initial purchase price;

- ensure that recognition of the principle of negative value is not extended automatically to all vehicles, regardless of their actual recyclability;

- ensure that the sums received by treatment and demolition businesses to offset the negative value are used appropriately by them to modernize their activities and comply with the relevant provisions.

2.13. The Committee notes that while Article 11 provides for the transposition of the Directive by 31 March 1999, Article 5(4), regarding negative value, will not enter into force until 1 January 2003. However, this should give producers sufficient time to adjust the design of new models so that they meet the recycling objectives. It should also give the relevant economic players sufficient time to conclude voluntary agreements geared to these objectives. Nonetheless, a check should be made on the situation prior to application.

3. Specific comments

3.1. Scope (Article 3)

3.1.1. The exclusion of lorries and buses, and the derogations for two and three wheel motor vehicles, are understandable during an initial period, because the waste-related problems are less serious and more specific. However, their special status should be reviewed over the longer term, particularly as regards the treatment of hazardous substances, as the risks of environmental pollution are the same as for other vehicles.

3.1.2. The Committee thinks that the derogations for two and three-wheel motor vehicles provided for in Article 3(3) should also apply to Article 5(4). The question should be addressed as to whether it is desirable for two-wheel motor vehicles which have a cylinder capacity of less than 50cc, or which may be used in the Member States on public highways without a number plate, to be exempted from the provisions of Article 5.

3.2. Prevention (Article 4)

3.2.1. The Committee has already supported the need to restrict and if possible outlaw the use of heavy metals and other toxic substances in production processes and products (). It therefore welcomes the preventive approach taken by the Commission.

3.2.2. As regards the absence of any reference to PVC, the Committee is pleased to note that the Commission intends (12th recital to the proposal) to conduct a general review of PVC in waste streams, with a view to formulating possible proposals. However, the Committee feels that the wording used by the Commission is too vague. It would prefer to see a more binding commitment to the tabling of specific proposals, as the Commission undertakes in connection with other aspects of the proposal.

3.2.3. Turning to the question of heavy metals and other hazardous substances, the Committee feels it insufficient to adopt requirements that only apply to the end treatment of vehicles and make no distinction between cars which are already in circulation and will remain so for several years, and those which will enter into circulation in the future and can thus be designed to meet higher environmental protection standards. A more appropriate approach could involve the following:

- for vehicles in circulation: measures for the final disposal of the waste remaining after the vehicle has been treated. These measures must ensure the same level of environmental protection as the measures applicable to all other waste containing heavy metals and hazardous substances;

- for vehicles designed after the directive enters into force, and which will be put in circulation in future: a phasing-out of heavy metals and other hazardous substances, with incremental provisions starting with substitute products that are already technically feasible (e.g. a substitute for lead in electronic circuits). Promotion of research and technological innovation is vital here.

3.3. Collection (Article 5)

3.3.1. The value of end of life vehicles may depend on a number of factors, in addition to the efficiency of the demolition and recovery sectors, and local markets. Bearing this in mind, the Committee thinks that the 'negative value` problem can be curbed by measures to promote efficient collection and recovery systems. Facilities should be close by and should be capable of achieving high recovery rates at reasonable cost.

3.3.2. In order to make the strategy of prevention, recovery and recycling effective, and to monitor the results achieved step-by-step, systems should be introduced for checking the efficiency of recovery plants and producers' progress in adapting design to recycling needs, pursuant to the measures mentioned in Article 4 (prevention)(1)(a) and (b).

3.4. Treatment (Article 6)

3.4.1. Obliging operators to obtain a permit will enable the public authorities to monitor compliance with the environmental requirements. As only authorized facilities will be able to issue the statutory certificate of destruction, there will inevitably be some restructuring of the sector. In Member States where firms tend to be small to medium-sized and the treatment system is less well developed, measures will be needed to encourage and help firms to modernize; use can be made of the incentive funds available at EU and national level to help SMEs adjust to environmental protection standards.

3.5. Re-use and recovery (Article 7)

3.5.1. The Committee feels that the proposed targets adequately reflect waste management priorities, and endorses them as they are graduated over time and leave room for flexibility and adjustments, allowing energy recovery where this is the only environmentally viable option.

3.5.2. The Committee points out that setting the objectives as a percentage of vehicle weight might conflict with the other ecological objective of reducing vehicle weight in order to reduce fuel consumption. The fact that metals are easier to recycle could lead producers to use more metal, rather than lighter plastics. To prevent this, the Committee recommends that appropriate steps be taken to mark materials and to plan with a view to recycling. At all events, the weight should not be calculated per vehicle, but according to general averages. Otherwise the checking operations will become too detailed and complex.

3.5.3. Article 7(4) states that Directive 70/156/EEC is to be amended in order to make the objectives for the year 2015 feasible. In this way, the guarantee of achieving higher objectives is to be contingent on a regulatory measure, while for the period up to the year 2005 the only instrument is to be the producer responsibility principle, using the negative value to encourage the taking of preventive action.

3.5.4. This mixed approach raises a number of questions. A distinction should also perhaps be drawn between vehicles produced before the entry into force of the present directive, on which negative value would be penalized retroactively, and vehicles produced after 1999. Here it is worth mentioning the provision adopted in Sweden, where producer responsibility applies only to new vehicles from the date of entry into force of the new legislation.

Brussels, 25 February 1998.

The President of the Economic and Social Committee

Tom JENKINS

() OJ C 337, 7.11.1997, p. 3.

() COM(96) 399 final; Council Resolution of 24.2.1997 in OJ C 76, 11.3.1997; ESC Opinion in OJ C 89, 19.3.1997.

() OJ C 287, 22.9.1997, p. 1.

() OJ C 89, 19.3.1997.

() Opinion on the review of the Community strategy for waste management, point 3.3.2, in OJ C 89, 19.3.1997, p. 2.