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Recycling Strategies in Automotive Industries

VIEWS: 5 PAGES: 10

									                   Recycling Strategies in Automotive Industries


                                            Frank R. Field, III
                                      Materials Systems Laboratory
                                   Massachusetts Institute of Technology




            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                       Materials Systems Laboratory




            Materials Systems Laboratory

                Eighteen Year Effort at MIT to Study the Strategic Implications of
                Materials and Materials Processing Choices
                  MIT Department Of Materials Science & Engineering
                  Center For Technology, Policy & Industrial Development

                Emphasis:
                 Application Of Analytic Methods To Detailed Case Studies Drawn
                 From Current Strategic Industrial Issues

                Objective:
                 Competitive Position Of Materials
                 Evaluation Of Materials Processing Technologies
                 Analysis Of Strategic Opportunities And Threats
                 Evaluation Of The Promise/Limits Of Materials, Processes &
                 Designs

            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                       Materials Systems Laboratory




Slide 1-2                                                                                                 May, 2001
            Methodological Approach

                Methodological Approach:
                 Development Of Engineering And Economic Based Tools For
                 Evaluation Of Alternatives In Advance Of Full Blown Development
                    Technical Cost Modeling
                    Lifecycle Cost And Emissions Tracking
                    Decision Analysis Techniques
                    Systems Dynamics Modeling

                   Systems Approach to Strategic Decisionmaking
                     Multiple Objectives Must Be Considered Simultaneously
                     Interactive Effects Between Individual Process/Material Choices
                     Functional Equivalence Needed for Meaningful Comparisons

                Synthesis Of Results Into A Description Of Materials Competitiveness



            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                                                   Materials Systems Laboratory




            Vehicle Recycling - A Recurring Automobile Issue

                Depending on How You Look At It, This Is The Second (or Third) Time
                Around
                Well-Established Vehicle Recycling Infrastructure
                Economics Of Infrastructure Dominated By Shredder Economics
                  Recovery of Scrap Metals, Particularly Ferrous Metals
                Policies Driven By A Conventional View Of Recycling


                                                       ASR                         ASR                 Loss
                                                                        Nonferrous
                             Dismantler              Shredder           Separator                      Processing
                 Old                          Hulk              Heavy
                                                                Blend
                 Car
                                                                                                       Gain
                                                                                   Zinc
                                                                                          Red Metals
                                                                        Aluminum




                            Parts
                            Large Castings
                            Battery                  Steel
                            Catalytic Converter      Scrap


            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                                                   Materials Systems Laboratory




Slide 3-4                                                                                                                             May, 2001
            Overview: Latest Version of Recycling Goals

                By 2006,
                  Re-use/recycle 80% of vehicles by weight
                  Re-use/recover 85% of vehicles by weight
                  Design for 85% recyclability and 95% recoverability

                By 2015
                  Re-use/recycle 85% of vehicles by weight
                  Re-use/recover 95% of vehicles by weight

                Automakers are to integrate as much recycled material into car as
                possible

                Problem: How To Reconcile These Objectives With Other
                Environmental Goals?



            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                                              Materials Systems Laboratory




            Changes In Automobile Materials - in type and quantity
             Pounds/average vehicle
             4,000


             3,000

                                                    Other
                                                    Ferrous
             2,000                                  Non-ferrous
                                                    Plastics


             1,000
                                                                       Pounds/average vehicle
                0                                                      4,000
                19 1
                19 6
                19 7
                19 8
                19 9
                19 0

                19 2
                19 3
                19 4
                19 5
                19 6
                19 7
                19 8
                19 9
                  90
                   8
                  7
                  7
                  7
                  7
                  8

                  8
                  8
                  8
                  8
                  8
                  8
                  8
                  8
                19




                                                                       3,000
                                   Year
                                                          Other
                                                          Ferrous
                                                                       2,000
                                                          NonFerrous
                                                          Plastics

                                                                       1,000


                                                                          0
                                                                                77


                                                                                      87


                                                                                            92


                                                                                                  97


                                                                                                          98


                                                                                                                99


                                                                                                                       00
                                                                               19


                                                                                     19


                                                                                           19


                                                                                                 19


                                                                                                         19


                                                                                                               19


                                                                                                                     20




                                                                                                  Year

                                                                                                          Source: AMM WWW site


            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                                              Materials Systems Laboratory




Slide 5-6                                                                                                                        May, 2001
            Shredder Economics - Versus Vehicle Material Content
                  US Average Vehicle Material Content                           US Shredder Economics
                                                                                     $20/Ton Tipping Fee
             Pounds/Car
                                                                              $/ton Ferrous Scrap




                                                         Other                                                                   ASR
                                                         Ferrous                                                                 Nonferrous
                                                         Non-ferrous                                                             Ferrous
                                                         Plastics                                                                Feedstock
                                                                                                                                 Processing




                                                                              76

                                                                                   78

                                                                                         80

                                                                                                82

                                                                                                      84

                                                                                                           86

                                                                                                                88

                                                                                                                     90
             76

                  78

                       80

                            82

                                 84

                                       86

                                             88
                                                   90




                                                                           19

                                                                                19

                                                                                     19

                                                                                            19

                                                                                                  19

                                                                                                       19

                                                                                                            19

                                                                                                                  19
            19

                 19

                      19

                           19

                                19

                                      19

                                            19
                                                 19




                      Vehicle Model Year                                             Vehicle Model Year


            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                                                                 Materials Systems Laboratory




            Recycling
                An Economic Activity With Many Participants
                                                              Last User


                                                        $$?            Old                                      Used Parts
                                                                       Car                                      Market
                                                                                        Parts

                                 $$                           Dismantler
                                                                                                 $$
                                           Waste

                                                        $$
                                                                       Hulk
                                       $$                                               Scrap                   Ferrous Scrap
                                                                                        Steel                   Market
                                            ASR
                                                              Shredder
                                                                                            $$
                   Landfill

                                                        $$
                                                                    NF Blend
                                            $$

                                       ASR                   Non-Ferrous
                                                              Separator                  Al, Cu, Zn             Non-Ferrous
                                                                                                                Scrap Market
                                                                                            $$

            Massachusetts Institute of Technology
            Cambridge, Massachusetts                                                                                 Materials Systems Laboratory




Slide 7-8                                                                                                                                           May, 2001
             Implications Of "Increased Recycling"
             For Existing Infrastructure
                                                                                Last User

                                 New Markets
                                                                                                                    Used Parts
                                                                                       Old
                                                                          $$?                                       Market
                                                                                       Car
                                                                                                Parts
                                   $$                                          Dismantler
                                             Product                                                        $$
                                                              $$

                                                            Waste         $$
                                                                                       Hulk
                                                                                                Scrap                Ferrous Scrap
                                             New                                                Steel                Market
                                             Processors             ASR
                                                                                Shredder
                                 Waste                        $$                                       $$


                                                       $$                 $$
                                                            ASR
                                        $$                                            NF
                                                                                      Blend

                                                                               Non-Ferrous
                                                                                Separator        Al, Cu,             Non-Ferrous
                                                                                                 Zn                  Scrap Market
                                               Landfill                                                $$

             Massachusetts Institute of Technology
             Cambridge, Massachusetts                                                                            Materials Systems Laboratory




             Another Recycling Market - Beverage Cans
                                 120                                                                                          120%
                                             Cans Recovered       Cans Produced       Recycling Rate
                                 100                                                                                          100%
                                                                                                                                         Recycling Rate




                                  80                                                                                          80%
               Cans (billions)




                                  60                                                                                          60%


                                  40                                                                                          40%


                                  20                                                                                          20%


                                   0                                                                                          0%
                                         1981




                                         1991
                                         1972
                                         1973

                                         1975
                                         1976
                                         1977
                                         1978
                                         1979
                                         1980

                                         1982
                                         1983

                                         1985
                                         1986
                                         1987
                                         1988
                                         1989
                                         1990

                                         1992
                                         1993

                                         1995
                                         1996
                                         1997
                                         1998
                                         1999
                                         1974




                                         1984




                                         1994




                                                                               Year

             Massachusetts Institute of Technology
             Cambridge, Massachusetts                                                                            Materials Systems Laboratory




Slide 9-10                                                                                                                                                May, 2001
              So, Again, What Are The Goals?

                  By 2006,
                    Re-use/recycle 80% of vehicles by weight
                    Re-use/recover 85% of vehicles by weight
                    Design for 85% recyclability and 95% recoverability

                  By 2015
                    Re-use/recycle 85% of vehicles by weight
                    Re-use/recover 95% of vehicles by weight

                  Automakers are to integrate as much recycled material into car as
                  possible

                  Problem: How To Reconcile These Objectives With Other
                  Environmental Goals?



              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                      Materials Systems Laboratory




              Issues In The Expansion Of Recycling

                  Technological
                    Separation Is Difficult & Expensive
                    Separation Is Key To (Re)Processing Efficiency and Product Quality
                    Ferrous, Nonferrous, and Polymeric Materials ALL Subject To These
                    Limitations

                  Economic
                    Primary Materials Markets
                      Focus Upon Purity/Quality Of Material
                    Secondary Markets
                      Balance Costs Of Purification Against Market Demand
                      Ceiling On Price - Virgin Material Or Ores/Feedstocks
                    Markets Reflect Tension Between Product Value & Separation Expenses

                  Political
                    Unacceptability Of Disposal & Thermal Recovery
                    Unwillingness To Levy Fees On (Last) Vehicle User
              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                      Materials Systems Laboratory




Slide 11-12                                                                                                May, 2001
              Pending European Issue: Compliance Costs
                                                                                    Cost Curves for Incremental
                   Which technologies                                                 and Radical Scenarios
                   are necessary for
                   achieving regulations
                   cost-effectively?




                                                                Cumulative cost
                   Radical technologies
                   are more costly at                                             Incremental
                   existing benefits
                                                                                    Radical
                   However, at higher
                   standards,
                   incremental change
                   may end up costing
                   more
                                                                                              Benefits
              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                                             Materials Systems Laboratory




              Incremental vs. Radical Scenarios

                                                      Incremental Radical
                                 Method "End-of-pipe"                                     Industry
                                                                                          consolidation
                        Technology ASR recovery                                           Mass dismantling,
                         Emphasis                                                         vertical integration

                     Infrastructure Existing                                              New with SME's
                                                                                          exiting
               New Investment Minor                                                       Major


                                   Market Secondary                                       Secondary parts
                                                      plastics market                     market

              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                                             Materials Systems Laboratory




Slide 13-14                                                                                                                       May, 2001
              ASR Recovery or More Dismantling?
                                                                      Cost of Recovery
                                                                 ASR and Dismantling Options

                                           $400
                 Cumulative Cost/Vehicle
                                                       ASR Recovery    Dismantle   Dismantle w/ IDIS

                                           $300


                                           $200


                                           $100


                                            $0
                                                  0%                         50%            75%      85% 90% 95%100%

                                                                          % recovery

              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                                            Materials Systems Laboratory




              Conclusions

                            From a recycling perspective, current infrastructure, with additional
                            NF separation, can reach 80% recycling with today's vehicle material
                            mix, if...
                              Shredders and NF separators operate BAT
                              A secondary market for plastics arises
                              Current secondary metals and hulk prices improve

                            However, additional investment will be needed for higher
                            recycling/recovery levels of 85%-95%
                              ASR investments around $220 million
                              Dismantling path may require $1.2 to $1.9 billion depending on
                              retrofitting or greenfield sites
                              Consolidation of facilites may require $1.1 to $2.4 billion in new
                              investments



              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                                            Materials Systems Laboratory




Slide 15-16                                                                                                                      May, 2001
              Conclusions (continued)

                  Radical scenario of facilities consolidation may not be cost effective at
                  any recovery level, unless
                    More parts are recovered for re-use to supplement higher cost of
                    additional dismantling
                    Infrastructure in place to collect materials and/or
                    resale/remanufacuture parts
                    Outside subsidy likely necessary

                  Otherwise, ASR recovery is the most cost-effective scenario, unless
                    Stakeholders are willing to encourage dismantling by providing
                    subsidies of $50-$150 per vehicle to maintain a profitable industry




              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                       Materials Systems Laboratory




              Conclusions, Generally

                  "You Can't Push A Rope"
                    Recycling Goals Cannot Be Just About Technology Forcing
                    Governments Have Key Roles That Cannot Be Achieved By Industry

                     Monitor The Operation Of The Recycling Industry
                      Guarantee Access To Secondary Markets For Credible Players
                      Assure Flow Of Used Vehicles Into Secondary Markets

                     Remove Market Distortions Favoring Virgin Materials

                     Provide Flexibility To Private Sector Participants In The Market
                       Avoid Prescribing Or Proscribing Specific Technical Arrangements

                     Assure The Economic Viability Of
                       The Overall Recycling System
                       Individual Elements Within The System

              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                       Materials Systems Laboratory




Slide 17-18                                                                                                 May, 2001
              Industry Has A Key Role As Well

                  Principle:          Act To Improve Product Recyclability

                     Promote Material Labeling And Information Standards

                     Develop New Fastening Technologies That Simplify Disassembly

                     Remove Industry Barriers To Use Of Appropriately Reconditioned And
                     Remanufactured Components

                     Choose Materials That Improve Vehicle Recyclability
                       Ease Of Species Segregation
                       Employ Secondary Materials

                     Support R&D Into Secondary Materials & Processing Technologies

                     Develop Design Tools Supporting Evaluation of Alternatives

              Massachusetts Institute of Technology
              Cambridge, Massachusetts                                       Materials Systems Laboratory




Slide 19-20                                                                                                 May, 2001

								
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