ELV funding decision delayed because of car industry concerns

In a House of Commons debate into the implementation of European legislation that increases recovery targets up to 85% for vehicles from 2006 and 95% from 2015, Mr Wilson moved to reassure those within the industry that such targets will be achievable.

Manufacturers
Although the government decision on funding for the implementation of the new directive has not yet been announced, expectations are that they will largely be met by vehicle manufacturers. But, there is much discussion over whether car manufacturers should pay now for car recycling, or after 2006.

Mr Wilson said: “There is no point in introducing a system that does not place an onus on the producer to make the end product better. With producer responsibility there is a strong onus on the producer to change the design in ways that are compatible with the directive’s objectives.”

However, there are fears that adding a further burden to car companies may provoke them to relocate factories abroad. John Taylor, MP for Solihull, the location of the Ford-owned Land Rover plant, said: “Given the overcapacity in the world automobile industry, we must try to minimise the disadvantage to manufacturers in the United Kingdom. That is not protectionism; it is common sense.”

Disadvantage
But Mr Wilson made it clear that such fears are central to the government’s decision-making process. He said: “We shall seek to ensure that the UK’s approach to implementing the directive does not disadvantage UK business compared with competition in other member states.”

The Conservative administration first brought in regulations to make manufacturers pay for the recovery of ELVs in 1993, and Mr Wilson yesterday made it clear that Labour will not rule out a similar approach. “The issue is not party political,” he stressed during the debate. “Everyone has signed up to the principles.”

One possible alternative is to pass extra costs onto the consumer. But Mr Wilson did not seem keen. “That is one of the options that we are considering,” he said, “but it has not been proposed in other EU states, and it is a complex way of doing it because it is a long-term as opposed to a one-off process.”

As well as a funding gap that will exist in ELV recovery before the EU directive comes into effect from 2007, many in the industry worry that additional costs in recovering a more diversified number of materials within vehicles – and meeting new safety guidelines – could play into the hands of illegal operators.

Cowboys
David Hulse, Director General of the British Metals Recycling Association said: “Many of the operators in the British ELV recycling sector are small to medium sized enterprises and are unable to absorb the costs of new equipment and survive.”

He added: “Many would be forced to simply not take old cars, or worse, cowboys in the industry would prosper because car owners who don’t abandon their cars would take their vehicles to the place that charges the least by cutting corners.”

The BMRA’s solution to the problem would be a central scheme similar to those operated in some other European countries. The government in Denmark has placed a fee on all car insurance sold, which is then used to ensure that when the vehicle reaches the end of its life it is disposed of satisfactorily. In the Netherlands the fee that eventually goes towards disposal is placed on the sale of a new car.

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