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Cost Drivers Related to the Recovery of
End-of-Life Vehicles (ELVs)
Shahin Rahimifard
Advanced Manufacturing Systems and Technology Centre
Wolfson School of Mechanical and Manufacturing Engineering
Loughborough University
SR - Cost Drivers Learning Event
February 2004 - Gaydon
Advanced Manufacturing Systems and Technology Centre
• AMST Centre was formed in 1990.
• One of the registered R&D centres of the
Department of Trade and Industry (Dti).
• Involved in more than twenty major National
and European R&D programmes, and also a
large number of short term industrially
fund project.
• Centre’s activities are typically based on : -
- Manufacturing Systems Engineering
- CAD / CAM Technologies
- Production Planning and Control
- Information Modelling and System Integration
- SME Manufacturing Research www.lboro.ac.uk/AMSTC
- Sustainable Product Design and Manufacture
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Presentation Contents
1) Environmental Conscious Manufacturing Versus
Sustainable Development
2) Closed Loop Manufacturing
3) End-Of-Life Vehicles (ELVs) Directive
4) Cost Drivers Related to the Recovery of ELVs
5) Concluding Remarks
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Environmentally Conscious Manufacturing versus Sustainable Manufacturing
• Environmentally Conscious Manufacturing (ECM) concepts are
concerned with minimisation of the negative impact of manufacturing
activities on the environment through developing equipment, methods,
procedures and environmental standards.
• Sustainable Development is defined as “development that meets
the needs of the present without compromising the ability of future
generations to meet their own needs”. The contemporary view of
this concept is based on three pillars of Social, Economical, and
Environmental issues.
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Product Life Cycle Approach to Sustainability
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Life Cycle Approach to Sustainability
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One of the Major Goals of Sustainable Manufacture
Traditional Sustainable Manufacturing
Manufacturing
Supply Manufacture
Manufacture Transformed
Supply
Use
Use
Recovery
Disposal
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Additional Activities within Closed Loop Manufacturing
Supply Manufacture Use
Re-process/Recover Collect
the used products the used products
Sort/Assess
the used products
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Product Recovery Options
Remanufacture is where the discarded products are repaired,
reconditioned and re-supplied. Typically remanufactured products do not
change shape or functionality.
Reuse is the disassembly and reclamation of parts , components, and
modules within discarded products for reuse in old or new products.
Recycle is the reclamation of the material from parts, components, and
modules within discarded products.
Incineration is the reclamation of energy within the parts, components,
and modules of discarded products as the last resort when all the
aforementioned options are not possible.
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A Holistic View of Product Recovery Options
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End-Of-Life (EOL) Value
A simple equation for calculating the EOL value of a product to a
company is :-
If
EOL Value = End-of-life product value to a company
EOL Revenue = Revenue from material and components for reuse
Cost Col & Trans = Cost for collection and transportation of EOL products
Cost Reco & Recy = Cost for processing EOL products
Cost Resell & Redis = Cost of resell and redistribution of recovered parts and material
Then
EOL Value = EOL Revenue – [Cost Col & Trans + Cost Reco & Recy + Cost Resell & Redis ]
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February 2004 - Gaydon
Business Model 1 to Support Product Recovery
Recoverer
Supplier Manufacturer Distributor Customer Collector
Used products are returned to the original manufacturer
Manufacturing activities are expanded to include recovery operations
Often is based on a Product Leasing initiative e.g. photocopiers, PCs
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Business Model 2 to Support Product Recovery
Manufacturer
Supplier Distributor Customer Collector
: Independent
: Recoverer
Customer
Supplier Manufacturer
Distributor Customer Collector
Independent recoverer carries out the recovery processes
Recovered products can be supplied back to original manufacturer or
be sold to any third party customer
More suitable for consumer products with a wide geographical distribution
e.g electronic and electrical goods, cars, packaging waste
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Major Cost Drivers In Sustainable Product Design and Manufacture
New
Technology
& Processes
Cost Drivers in
Environmental Sustainable Product Market
Legislation Design and Manufacture Conditions
Materials,
Resources,
& Skills
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End-of-Life Vehicles (ELVs) Directives
• To cope with the environmental effects of estimated ‘nine million’ tonnes
of vehicles that reach the end of their useful lives each year in Europe, the
European Union drew up the End-of-Life Vehicles (ELVs) Directive
which came into force on 21 October 2000.
• Member States should have transposed the Directive into national law by
21 April 2002. The ELV directives came into force in the UK on the 3rd
November 2003.
• Purpose is to encourage the design of new vehicles that :-
a) Facilitate dismantling, reuse, recovery and recycling of their
components and materials,
b) Integrate an increasing amount of recycled materials into new
products, and
c) Limit the use of hazardous substances.
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A Summary of ELVs Directives
Producer Responsibility is one of the main features of this directive
whereby the Vehicle Manufacturer is responsible for the take-back and
recycling of all the vehicles they produce from 2007.
• Producers (vehicle manufacturers or importers) to pay ‘all or a significant
part' of the costs of take back and treatment from January 2007.
• Producers, Dismantlers and Shredders etc. to establish adequate systems for
the collection of ELVs from the outset.
Recovery Targets for all End-of-Life Vehicles by weight have also been
set by the ELV Directive which are :-
• 85% of by January 2006 (minimum 80% recycling), and
• 95% by January 2015 (minimum 85% recycling).
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Size of the Problem in UK
It is estimated that around 2,000,000 cars
are scrapped in the UK every year, from
which :-
• 1,400,000 million are true ELVs,
• 400,000 crashed/premature write-offs, and
• 300,000 are abandoned vehicles.
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Cost Drivers : New Technology and Processes 1
Some examples of technological challenges in the recovery of ELVs
• Fuel tanks, made out of high density polyethylene, are now a feature on more
than 60% of new European cars and represent one of the biggest plastic
components. One of the biggest challenges for recycling has been to find ways of
removing fuel residues and other coatings that accumulate on the fuel tank during
its lifetime and would otherwise taint the raw mate
• Heat resistant polyamide plastics, such as Nylon, used in the demanding
environment found under the car bonnet account for between 15 and 20% of the
plastics used in cars. However, because of tough quality standards, re-use and
recycling of polyamides has been very limited.
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Cost Drivers : New Technology and Processes 2
Some examples of technological challenges in the recovery of ELVs :-
• Two industrial techniques already exist for sorting plastics for recycling.
Unfortunately, both have flaws. Laser Induced Breakdown Spectroscopy (LIBS)
can sort plastics at high speed with 100% accuracy for some of the most common
types of plastics such as polyvinyl chloride (PVC) and polyethylene terephthalate
(PET). However, it is unable to identify other types of plastics with the same
degree of accuracy. An alternative technology using infrared beams can
distinguish between all plastics, but the process speed is painfully slow.
• Used tyres represent one of the biggest environmental problems attributable to
the car industry, with most of the millions discarded every year finding their way
into local dumps. One of the main obstacles is economic: although recycling tyres
is technically possible, it is cheaper to start from scratch with the original raw
material. One way of cutting the pollution problem is to extend the life of existing
tyres by rethreading. A reliable cost effective solution for this process is yet to be
developed.
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Current ELVs Recycling Practices
Source : Automotive Consortium on Recycling And Disposal (www.smmt.co.uk)
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Current Recycling Operators/Actors
Dismantlers - recover the valuable parts and remove items such as
batteries, tyres, fluids, hazardous materials e.g., containing mercury
(depollution).
Shredders - separate materials by type into ferrous product, and non-
ferrous product. Often bear the costs of ELVs waste for final disposal
to landfill.
Media Separation Plants - separates non-magnetic shredder fraction by
type into separate non-ferrous metal product.
Material Recyclers - specialised for recycling Metal, Plastic, Tyres, Oil.
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Breakdown of Materials (by weight) within Modern Cars
Source : Waste-Online (www.wasteonline.org.uk)
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Cost Drivers : Materials
It is estimated that from the total weight of ELVs processed dismantlers and scrap
yards :-
• Typically 70-75% of is metal. and
• and other 25-30 % are non-metallic waste (often referred to as shredder residues) which
includes plastics, rubber, glass, textile, paint, oils and lubricants, paper and cardboard.
From Shredder Residues produced by dismantlers, scrap merchant and feeder yard :-
• 70% recovered by Shredders to steel,
• 10 % goes to heavy metal plants for further recovery processes, and
• 20 % sent to landfill as waste.
Heavy Metal Plants will recover the following from their in feed:-
• 7 % to steel,
• 20 % to aluminium,
• 13 % to magnesium, copper and zinc, and
• 60 % to landfill as waste.
450,000 tonnes of non-recyclable waste from ELVs is currently sent to landfills in the
UK each year, which accounts for up to 10% of the UK’s annual total hazardous waste.
SR - Cost Drivers Learning Event
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Reuse of Recovered Non-metallic Metallic Materials within ELVs
Mechanical recycling of flexible polyurethane seat foam
from shredding residue for carpet underlay
Glass from shredder residue as road aggregate
Shredder residue to make paving slabs
Rubber used in road aggregate and playground.
Tyres are able to replace up to about 25% of the coal which would
otherwise be used in cement kilns, This processes could provide a
recovery option for up to half of the UK’s total waste tyre arising.
Tyres have a high calorific value, about 20% greater than that
of coal, which on burning can be harnessed to produce energy.
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Cost Drivers : Resources (in UK)
Dismantlers
• Estimated at 5000 in total.
• 3000 of them are licensed .
• Each processed 250-1000 ELVs every year.
• 55 % turnover from universal parts/used cars.
Shredders (in UK)
• 37 Shredders
• Very expensive to set up
• Pay for sending the final waste to landfills.
Heavy Metal Plants (in UK)
• Currently there are 4 heavy metal plants
• 30-50% of their in feed is from ELVs.
• 200 tonnes/hour of which 70% steel, 5% al, 20% waste.
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Cost Drivers : Skill
Design
• Modular construction aids replacement,
• Wearing parts should be easily accessible,
• Standard parts are better than special designs.
Management
• Reverse logistics
• Planning of recovery processes
• Inventory of new, used and recovered products
• Uncertainty regarding the quality and quantity of ELVs
Labour
• Disassembly
• Depollution
• Recondition/Repairs, etc
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Cost Drivers : Market Conditions
Marketing implications
• Availability of market for recovered products, parts, or materials at a
viable price.
• Positive marketing image as a result of environmentally conscious
manufacturing
• Negative marketing implications related to product reliability issues.
Cost-benefit analysis
• Cost of non-compliance
• Hidden value of used products versus cost of recovery
• Capital investment requirements versus recovery revenue
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A Predicted Pattern for Profit and Loss Account resulted by ELVs
The preliminary compliance cost assessment estimated that
the cost of meeting the ELV directive in the UK will be
in the region of £360 to £520 million.
Loss
Time
Profit
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Concluding Remarks
ELVs directive aims to reduce negative impacts to environment caused by
vehicles at the end of their useful life.
The significant number of problems with the development and introduction
of ELVs Directive, highlights a need for a more effective consultation
procedures and input from industrialists and experts to the definition of
future environmental legislation and directives.
Solutions for ELVs compliance will have to be :-
• Sustainable to justify investment.
• Flexible to counter fluctuations in the global market.
• Competitive with the cost of virgin material.
ELVs compliance if managed properly could results in profit making
opportunities.
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Sources of Information
ACORD (Automotive Consortium on Recycling And Disposal) SMMT (The Society of Motor Manufacturers and Traders Ltd)
E-mail: sfranklin@smmt.co.uk Tel: 020 7235 7000
Web: www.smmt.co.uk Web: www.smmt.co.uk
British Plastics Federation Oil Recycling Association
E-mail: bpf@bpf.co.uk Tel and Fax: 01256 840049
E-mail: ora8@excite.co.uk
Web: www.bpf.co.uk
Used Tyre Working Group
British Metals Recycling Association E-mail: paul.hallett@dti.gov.uk
E-mail: admin@britmetrec.org.uk Website: http://www.tyredisposal.co.uk
Web: www.britmetrec.org.uk
The European Tyre Recycling Association
British Vehicle Salvage Federation E-mail: etra@euronet.be
E-mail: Email@bvsib.co.uk Website: http://www.etra-www.com/
Web: www.bvsf.org.uk
British Rubber Manufacturers’ Association
CARE (Consortium for Automotive Recycling) E-mail: mail@brma.co.uk
Web: www.caregroup.org.uk Website: http://www.brma.co.uk
E-mail: Peter.stokes@vwg.co.uk
Department of Trade and Industry
Recycling Policy Section: 020 7215 1860
Motor Vehicle Dismantlers Association of Great Britain Website: www.dti.gov.uk
E-mail: mvdaofgb@aol.com
Web: www.mvda.co.uk The Environment Agency (EA)
Website: http://www.environment-agency.gov.uk
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