This report identifies trends and opportunities related to the remanufacture, refurbishment, reuse and recycling of vehicles and their component parts.
The report first considers the key long term global trends in automotive design, production, use and disassembly. This is detailed in section two.
Section three then considers the current technologies and practices used by ELV dismantlers and shredders in Scotland and section four reviews technologies and practices used in other geographical areas. Section five summarises and compares different ELV systems used in other countries. The current markets for ELV parts and materials are described in section six.
In the longer term, the opportunities around remanufacture and refurbishment are available to a wider range of businesses in the Scottish economy, including vehicle manufacturers, their supply chain and new entrants from other sectors ( e.g. business with experience in electronics production and testing, logistics, financial product development and risk management). These opportunity areas are described in section seven.
In the short term, the opportunities are most relevant to businesses that dismantle and shred ELVs with increased parts reuse, improved material recovery and reduced costs associated with residue treatment being the key areas. These short term opportunities are described, evaluated and compared in section eight.
Finally, section nine identifies and describes a range of potential policy actions which could help businesses in Scotland take advantage of both short and long term opportunities identified in this report.
The report has been prepared by Optimat Limited with funding provided by the Scottish Government. The views expressed in the report are those of Optimat and are not necessarily the views of the Scottish Government.1.1 Background
This research has been carried out in response to two main drivers. The first of these drivers relates to projected long term trends in global population growth and increasing wealth in developing nations which are predicted to drive demand for resources. With limitations on resources, such as energy and materials, this will increase prices, raise issues with security of supply and ultimately impact on national competitiveness of different economic sectors.
The second driver is the need for the UK to achieve the 2015 ELV Directive targets of 85% reuse and recycling and 95% reuse and recovery during 2015 and in subsequent years  . With current UK performance of approximately 85% reuse and recovery, this presents short term challenges and opportunities for the ELV dismantling and shredding sectors.
This research study seeks to examine the implications of both of the above drivers.1.2 Research objectives
The specific objectives of this study are to:
- Better understand the nature of the commercial opportunities related to remanufacture, refurbishment, reuse and recycling of vehicle materials and parts arising from long term trends in the wider automotive sector
- Provide evidence about commercial opportunities for the vehicle recycling industry in Scotland arising from the short term requirement to meet the 2015 ELV (End of Life Vehicle) Directive targets (including indicative economic and environmental benefits and costs)
The research method used to address the above objectives consisted of a number of activities requiring telephone and face to face interviews and secondary research.
Assessment of the longer term trends and opportunities arising from changes in vehicle design, production, use and disassembly:
- Identification of the key long term trends
- Consideration of the circular economy approach as a solution
- Detail on where the automotive sector (including ELV dismantlers) is already taking a circular approach
- Key features of a circular approach in the automotive sector
- Identification of the current and potential future supply chain frameworks
- Circular approaches in other countries
- Opportunities and benefits in the automotive sector
An in-depth review of the current situation in Scotland including the identification of:
- The characteristics of the Authorised Treatment Facilities ( ATFs) in Scotland in terms of what technologies and practices they currently use, volume of vehicles processed, comparison with current capacity, type and destination and stage of recovery of outputs ( e.g. how much is exported for reprocessing?)
- What issues they face in achieving higher rates of component and material reuse/recycling and recovery (metals, tyres, fluids, plastics, interior fabrics, vehicle electronics not covered by the Waste Electrical and Electronic Equipment ( WEEE) Directive)
- What issues they face in achieving higher values for these components and materials
- What plans they have to invest in new technologies and practices (and barriers to same)
- Current markets for ELV parts and materials
A review of current technologies and practices used in the rest of the UK and overseas to deal with key issues faced by the industry including:
- Increased plastics recovery through better separation processes
- Development of applications/markets for recycled plastics
- Increased recovery of fluids
- Improved tyre recovery processes
- Initiation of other rubber recovery processes
- Reduction of residual metallic content of shredder residue
- Initiation of glass recovery processes
- Recycling and recovery technologies to extract rare earth elements and valuable metals
- Development of energy recovery processes for automotive shredder residues ( ASR)
- Development of post-shredder material recovery processes
A review of how the ELV sector has developed in other countries and any actions taken by the respective Governments to support and develop the industry:
- Comparison of different ELV funding systems used in EU countries
- Review of practices employed in different European countries
- Review the ELV system and practices used in Japan
The impact of projected changes to future vehicle composition on:
- The capability of current technologies and practices to achieve legislative targets
- The capability of current technologies and practices to maximise the value of components and recyclates
- The potential markets for reused components and recyclates in the UK and overseas
Modelling of baseline and projected inputs/ outputs from ELV dismantlers in Scotland assuming Business As Usual ( BAU) operations:
- Estimating current arisings of ELVs and material composition in Scotland
- Identification of changes to projected vehicle composition and weight
- Identification of typical costs associated with the procurement of end of life vehicles, average revenue achievable through dismantling and shredding operations and costs associated with disposal to landfill
- Development of a basic spreadsheet-based model to enable BAU and alternative scenarios to be compared
Modelling and comparison of the short term opportunities identified in the study:
- Economic benefit in terms of increased value from output materials and reduced costs of alternative disposal methods, such as landfill costs
- Environmental benefits in terms of avoided landfill and benefits/cost of recycling and recovery
- Comparison of the potential scenarios identified
The research questions were addressed through telephone interviews with over half of the ELV ATFs based in Scotland, face to face interviews with the majority of shredders based in Scotland and interviews with a number of other stakeholders from the wider automotive supply chain, material reprocessors, ELV experts from other countries and experts in remanufacturing from industry and academia. The study also benefited from industry representation (from both dismantler and shredder sectors) on the project advisory group. In addition to this, a wide range of published data was reviewed and references are included as footnotes throughout this report.
The remainder of the report details the findings from the above research questions.