Automobile Recycling Policy: Findings and Recommendations

The issue of automobile recyclability is a problem with complex ramifications for car makers world-wide. Confronted with increasingly stringent fuel economy, emissions, and safety standards, recyclability is an attribute which can limit the ability of the automaker to meet these other goals economically. Nevertheless, social and political pressures upon the industry require that it responds to the perceived need for more recyclable vehicles. These actions are already underway. However, there are crucial strategic questions which must be resolved in the face of the economic and technological limitations which circumscribe these efforts. This paper summarizes these efforts and addresses strategic issues which must be resolved. Introduction and Background The issue of automobile recycling is both a precursor of and a latecomer to the question of automobile environmental impact. First addressed during the late 1960s and early 1970s, vehicle recyclability has again become an increasingly visible, and therefore strategic, problem for the world automobile industry. In their first incarnation, automobile recycling problems were a consequence of two factors: 1. Changes in the technology of steelmaking. The transition from open hearth to basic oxygen steelmaking reduced the demand for steel scrap, especially low quality (high impurity) scrap. 2. Rising labor costs. The only methods available for producing high quality steel scrap from automobile hulks were hand disassembly and separation of metallic contaminants, so increases in labor costs increased the cost of producing high quality scrap from hulks. This combination of decreased demand in the face of rising costs was deadly for the automobile disposal industry. Without a market willing to buy low quality steel scrap, and no cost effective way to improve the quality of that scrap, old vehicles accumulated in junkyards or were abandoned, imposing both a financial and an esthetic burden on many communities [1]. Resolution of the problem took place as the consequence of two technological developments, accelerated by a special market situation. The technological developments were: Appendix A — The Recycling of Automobiles: Conflicting Environmental Objectives in a Competitive Market Recycling of the Automobile: Policy Options and Recommendations Page A-1 This document is based on materials presented at the KIET International Seminar on Korea’s Auto Industry, which was held November 25-26, 1993 in Seoul, Korea. 1. The rise of electric arc steelmaking, a process dependent upon a substantial source of steel scrap, and 2. The development of large scale mechanical shredding machines and magnetic separation facilities. The penetration of these two technological developments was accelerated by an unprecedented increase in demand for all raw materials during 1972, further increasing demand for steel scrap. With a concomitant increase in demand and a decrease in the costs of production, the market for automotive scrap rapidly expanded and the “problem” of automobile recyclability receded during the 1970’s [1,2]. In economies with relatively free markets in steel scrap, these events led to the development of new, profitable industries which were able to extract, refine, and market old parts and the various metallic fractions of the retired automobile. In economies with limits on their markets for steel scrap or extraordinary collection problems, deposit systems were imposed to create economic incentives for the introduction of old vehicles into the disposal network [3]. During the 1970s and 1980s, the focus of automotive development was on improving the fuel economy and reducing the gaseous emissions of the automobile. Several strategies were pursued toward this end, including modifications in engine and exhaust system technologies, changes in vehicle geometry, and modifications to vehicle powertrains. However, the approach which yielded the greatest benefit on all fronts was the reduction in the curb weight of the vehicle. By reducing the vehicle weight, gains in both fuel economy and emissions per mile could be achieved. In the early years, the weight of the vehicle was decreased through reductions in the overall size of the vehicle, the so-called “downsizing” of the automobile. However, given that there are both physical and safety limits to the degree to which downsizing is feasible, automakers also pursued the application of lower density materials. Although such materials are usually more expensive than Appendix A — The Recycling of Automobiles: Conflicting Environmental Objectives in a Competitive Market Recycling of the Automobile: Policy Options and Recommendations Page A-2 1976 1978 198