A big part of Europe’s ambitious recycling plans has gone missing.

Every year, only about two-thirds of the 10 million end-of-life cars in Europe are recorded as having been deregistered and scrapped. The rest disappear, according to a European Commission report published this week.

The number of missing cars comes to 3 million to 4 million a year, which means that millions of tons of metal, plastic, rubber and glass don’t get recycled, and 20 million to 55 million liters of hazardous liquids such as oil and air conditioner fluid go unaccounted for. That translates into an environmental hazard and a missed opportunity for the Commission’s circular economy project.

The ghost fleet is a headache for the European Commission. EU rules prescribe that clunkers be stripped of all hazardous substances by authorized dismantlers in safe surroundings and that 85 percent of the car’s weight be recycled.

It is now mulling fixes for when it reviews the End Of Life Vehicle Directive in 2020.

The fate of the missing cars varies, and the data about them is shaky. About 5 percent have been stolen and not recovered. Illegal exports to countries such as Iraq, where a European junker can be cheaply repaired, account for another share. Some cars fall into a paperwork crack: A car is sold second hand in another country, but never deregistered in the country of origin, translating into a missing vehicle. The bulk of the missing cars are presumed to be lost in Europe’s gray market of illegal dismantling.

Two approaches to scrapping

The End Of Life Vehicle Directive, passed in 2000, says automakers and importers must arrange for the handling of old cars and “meet all, or a significant part” of the costs. Companies either strike deals with dismantlers or set up extended producer responsibility (EPR) programs and charge a fee to new car buyers to cover end-of-life costs.

The cost of EPR systems varies from country to country. A 2014 Deloitte report on programs in six EU countries found fees ranged from as little as €3 to €4 per car in Finland and Austria, to €45 in the Netherlands and €66 in Slovakia. Germany has no end-of-life fees. Instead, authorized car scrappers pay a small amount to the final owner and earn a profit by selling on spare parts and scrap materials.

In all cases, the directive forbids the final car owner from being charged — to avoid the problem of cars being abandoned to sidestep a fee.

Reality doesn’t live up to that ideal.

There is an underworld of illegal car scrappers who don’t follow the EU’s safety and environmental rules. The money they save by flouting the law allows them to offer car owners higher prices, undermining lower paying authorized car scrappers.

“If you’re an illegal operator, you don’t care if you spill oil on the ground. You already have a competitive advantage,” said Thomas Papageorgiou, chair of the European Shredder Group at EuRic, the European recyclers’ federation.

A 2014 evaluation of the End of Life Vehicle Directive found the illegal collection and shipment of cars were “flourishing businesses.”

Addressing the problem

Countries are using a mix of carrots and sticks to tackle the issue.

In Denmark, car owners pay a minimum annual recycling fee of €11, which accumulates over the car’s life. The final owner gets the money when the car is scrapped with a legitimate dismantler.

In the Netherlands, car owners pay a yearly road use charge. They have to report changes in ownership and final scrapping to the national vehicle register to get it deregistered, otherwise they continue to pay the fee.

France took another approach, shutting down 100 illegal scrap yards in 2013. The U.K. closed down 989 in 2015.

All of those countries report low shares of missing vehicles compared to their total car fleet.

Meanwhile, according to the Commission report, Poland tops the list with more than a million cars missing each year between 2010-2013, accounting for 85 percent of all vehicles being scrapped. Italy and Spain follow with more than half a million missing cars each — more than a third of total cars junked.

According to another estimate by the Commission, 85 percent of vehicles in Finland and 57 percent in Belgium are scrapped illegally.

Another source of missing cars is simply bad bookkeeping. In Germany, a car not used for seven years is automatically and permanently deleted from the central vehicle registry. The vehicle still exists physically, but there is no obligation for the owner to report on its status.

“A lot of German cars end up in the wrong places because they’re out of the scope of enforcement. It’s all due to the national vehicle registration system,” said Henk Jan Nix, secretary-general of the European Group of Automotive Recycling Associations.

In 2017, the German government carried out research on missing vehicles and brought the number down from 1.2 million to 350,000 by doing a better job of working out which cars were simply lost in the paperwork, and which ones were really missing.

Instead of the current patchwork system across the EU, the report recommends standardizing rules for the registration and deregistration of vehicles at the EU level. Brussels is eyeing the Dutch system of annual ownership fees, perhaps coupled with the premium paid to car owners as in Denmark if they scrap correctly.

“An effective system of incentives and penalties, in combination with a good system for the vehicle registration, might generate less economic burden for the national authorities rather than repeating comprehensive inspection campaigns,” the Commission report said.

An EU-wide system will face resistance from the car industry: Someone will have to pick up the tab for scrapping those millions of missing cars if tougher paperwork requirements make many of them reappear.

Countries are also leery of what many see as a power grab by Brussels.

“There have been efforts to harmonize them, but member states are fiercely defending their own systems,” said Artemis Hatzi-Hull, a senior policy officer at the Commission’s environment department.

Maxime Schlee contributed reporting.

This article is part of a series on the circular economy, Getting Wasted.

CORRECTION: An earlier version of this article misstated the position held by Thomas Papageorgiou. He is chair of the European Shredder Group at EuRic, the European recyclers’ federation.

 

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