Willie Ganda

Regulation for Sustainability: The Impact of the European Union End-of-Life Vehicles Directive on the automobiule value chain

Willie Ganda

Regulation for Sustainability: The Impact of the European Union End-of-Life Vehicles Directive on the automobiule value chain

Regulation has always been used as a way of sustainable waste management for centuries, largely focusing on controlling the pollution outputs from the end-of-the-pipe. However this traditional form of regulation falls short on handling solid waste pollution resulting from the products themselves when they are discarded at the end of their useful life. In light of these limitations in the traditional forms of regulation the European Union adopted a new intervention philosophy called the Extended Producer Responsibility (EPR) principle which encourages producers to prevent pollution and reduce resource and energy use through changes in products and through taking responsibility for the product after the end of its useful life. Inline with the EPR policy in the year 2000 the EU issued the End-of-Life Vehicles (ELV) Directive 2000/53/EC, which assigns long-term environmental responsibility for automobiles to manufacturers in an attempt to internalize costs and convert the linear “cradle-to-grave” production and distribution chain into a “cradle-to-cradle” system that encourages recycling, reuse, and improved automobile design.

In this dissertation the author looks at regulation as a means of implementing sustainable development with specific focus on the impacts of the ELV directive on the automobile value chain.

Research Questions and Methodology – To help in assessing the impact of the directive in implementing sustainability in the automobile value chain the author in this thesis investigated the following questions:

• What are the stages in the automobile value chain and the sustainability issues at each stage?
• How has the ELV Directive has impacted sustainability in the automobile value chain in terms of practices and priorities for each stakeholder?
• What are the current ELV management practices & performance in the automobile value chain vis-à-vis the targets and aspirations set out in the EU Directive?
• What programs & policies can be implemented together with the ELV Directive to encourage improved sustainability in the automobile value chain?

In order to fully understand and answer these questions the author carried out literature review, as well as interviews with key implementing partners in private and public sectors as well as online and personal interview research surveys with the public who is the consumer.

Results – The findings from this dissertation are that the recycling targets set in the directive will go a long way in preserving virgin resources most of which will be exhausted within 60 years. The results from the Lifecycle Design Strategies Wheel indicate that the EPR principle significantly expands the design priorities of automobile manufacturers. At the end-of-life stage the study revealed that 50% of ELVs are not going through authorised treatment facilities thereby evading the necessary depollution and reporting. Based on this finding the 83%~84% recycling rate given by government agencies can be technically challenged. The research also found very high levels (90%) of public ignorance of the ELV regulations. This was mainly due to poor public education.

Conclusion – The recycling of automobiles will result in significant savings of fast depleting virgin resources and energy there by ensuring long term economic and social sustainability of Europe which is now a net importer of steel. The ELV directive expands the design priorities of manufacturers but the regulations have not yet been effective at the end-of-life phase due to poor consumer education and the lack of robust and credible implementation and monitoring mechanisms.