Monday, July 26, 2004

Yet another benefit of EU membership

Today’s Northern Echo offers a story headed: "Abandoned vehicles continue to increase", in which it lists some of the areas in the North East that are affected by this new epidemic.

Chester-le-Street registered a 400 per cent increase in the number of vehicles abandoned last year. Derwentshire, a neighbouring council, registered a 148.3 per cent rise. Hartlepool recorded a 164.4 per cent rise, Middlesbrough 96 per cent and Richmondshire 157.6 percent. Sedgefield, in County Durham, recorded an 11.1 percent rise, while Stockton recorded a 378 per cent rise.

Yet this is not solely a Northern problem. The story is replicated up and down the country, as local newspapers pick up on the consequences of yet another disastrous EU policy.

But what is fascinating is the way that the issue has been picked up by the Europhile Lib-Dems, with its environment spokesman, Norman Baker, claiming that the scourge is "a direct consequence of the absurd decision to make the final owner of the car foot the bill for its disposal, rather than the manufacturer, as is standard practice throughout the EU''.

This rather typifies the way that the Europhiles, on being confronted with an EU-made disaster, still can see no wrong in their beloved Union. Instead, they adopt two stratagems: first they blame the inadequacy of their own government, and then praise European countries, who always seem to get it so, so right.

But, as one might expect from a Europhile – and a Lib-Dem to boot – the situation is not as simple as Norman Baker makes out. For a start, it is by no means common in the rest of Europe for manufacturers to pay the bill for the disposal of their cars. In "green" Germany, for instance – according to the Lib-Dems’ favourite newspaper, the Guardian:
…car makers were so opposed to the idea of adding to the price of new cars to pay for the scrapping of old ones that the idea was abandoned. As in Britain, the government forces the last owner to be responsible and, if necessary, pay a dealer to take it away. But Germany avoids most of the problem of the 2m cars their owners no longer want by exporting them to eastern Europe or other parts of the world, such as Africa, where old cars still find a ready buyer. So instead of millions of cars to be scrapped, Germany has to dispose of around 200,000 a year - less than are dumped at the roadside in Britain.
So Germany dumps its old, polluting cars on the third world, and under-developed eastern Europe, leaving some of the poorest communities on the planet eventually to dispose of the wrecks. So much for Mr Norman Baker’s grasp of the realities.

But if Germany has rather neatly got round the problem, that still leaves other countries dealing with a messy and somewhat intractable problem, which is indeed one of the EU's making.

The proximate cause is being blamed on the End of Life Vehicle Directive (2000/53/EC), the so-called "ELV". This has two main aims: the prevention of waste arising from motor vehicles and vehicle components that have reached the end of their life-cycle; and the promotion of reuse, recycling and recovery of ELVs and their components. In addition, the Directive seeks to improve the environmental performance of all 'economic operators' involved in the life cycle of vehicles, particularly those involved in the treatment of ELVs.

According to the Directive, from 1 July 2002, producers of vehicles had to meet all, or a 'significant' part of the cost of scrapping and recycling for vehicles put on the market after this date, and should meet all the costs for all vehicles from 1 January 2007. However, the UK – together with other member states – have found it extremely difficult to implement the precise terms of the Directive.

As a result, the UK, as well as France, Belgium, Luxembourg, Italy, Ireland, Greece and Finland, which all failed to meet the deadline, were referred to the ECJ by the commission on 8 April 2003. To avoid a court hearing, the government rushed out the End of Life Vehicles Regulations 2003, which came into force in November 2003.

Although the law now applies to new cars (i.e., those produced after 1 July 2002) these form only a tiny percentage of vehicles currently scrapped, so the Directive can hardly be responsible for the current disaster. In fact, on the face of it, there should not be a problem at all: current prices for scrap steel are at an all-time high owing to enormous demand from China. Some countries are even making laws prohibiting the export of scrap steel, to protect their domestic industries.

What is happening, therefore, is something different. The core of the problems is that steel in cars is being progressively replaced by other materials – particularly plastic – which dramatically increases the costs of dismantling, and thereby reducing the margins of scrap handlers. This means that car wreckers are producing material for which there is no market for recycling, and which must be disposed of separately.

Here, our old friend the Waste Framework Directive comes in to play, which we have highlighted earlier on the Blog click here and here.

It is that which is responsible for shutting down a massive number of landfill sites, and for increasing the costs of landfill, as well as creating uncertainty as to whether the waste will be classified as "hazardous". All of which makes it difficult, if not impossible, to dispose of surplus material and makes scrapping cars prohibitively expensive.

When the ELV Directive does come fully into force, it will make life inestimably worse. At the moment, two million cars are scrapped each year in the UK and, currently 72 percent of cars, measured by weight, are either reused or recycled. Under the directive, the minimum percentages to be reached from 2006 onwards are 80 percent for reuse and recycling and 85 percent for reuse and recovery. By 2007, the recovery rate will have to rise to 85 per cent.

Thus, even more plastic will have to be salvaged from the old wrecks because most of the metal, the majority of the weight, is already recovered. Yet no one has created a market system that values the plastic greater than the cost of recovering it.

The result will be that costs will rise even further, and a new mountain of unwanted plastics and other materials will be created. Nor will it be possible to incinerate the surplus – the other permitted option - as the capacity simply does not exist. And with more stringent "environmental" requirements, combined with onerous licensing and recording requirements, only a few vehicle dismantlers will survive. These will have to charge substantial sums before they can accept scrap cars.

Those costs will fall on the least wealthy fifth of the population, who own one third of all the cars that are over ten years old – i.e., of an age at which they are likely to have to be scrapped in the coming years.

The results are only too predictable. Three years ago, some 350,000 cars were abandoned each year and, as the Northern Echo story indicates, the number is already spiralling upwards. At a conservative estimate, some authorities are predicting the number will rise to 500,000. At the moment, it is already left to local authorities to clear up the mess, at an average cost of £350, which comes out of the taxpayers’ pockets. The problem can only get worse.

As this Blog has observed before, how lucky we are to have the benefits of EU membership.

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