Case Studies 1: France

 Source: Menges 1988, presented in the Information document from the EC’s Priority Waste Streams Group on End-of-Life Vehicles

The car dismantlers, who receive the ELV from the final user, have a poor performance record on environmental issues. Although under the 1975 Law on Classified Installations, car dismantling sites should be approved by the DRIRE (the regional environmental regulator). In practice, many sites are not classified. The sector has many small actors (a total of 2,000 to 3,000), which are difficult to regulate due to the high costs of enforcement. There are about 900 classified sites in France, but the estimated total number of sites is in the region of 2,000 to 3,000 (Etienne Leroy, Pers. Comm., 1997).

There was also a need to address the growing problems faced by the scrap yards/shredders. The materials recovered were fetching an increasingly low price, while the increasing amount of plastic in cars was reducing the amount of material which could be recovered for re-sale. In addition, the price of landfill was rising and this put even more economic pressure on the sector. There were concerns about the effects of these pressures on the medium-term viability of the shredding companies. The collapse of this sector would have been disastrous for the supply chain as a whole (Interviews with Etienne Leroy, ADEME, and Mr de Tournemire, Ministry of Industry, 1996).

The agreement covers all sectors involved in the manufacture and disposal of vehicles: material suppliers (steel, iron, plastics), components manufacturers, car manufacturers and importers, dismantlers, shredders and recyclers.

There are two large French car manufacturers – Renault and PSA (including Peugeot and Citroën) – which have about 60% of the market for new vehicles. However, since 1995, car importers have also been signatories to the agreement.

The steel sector is involved in the car chain, both as a materials supplier and as a user of recovered energy and material. The car sector is the largest user of steel in France, accounting for four million tonnes of steel per annum. Usinor is the only steel producer in France, and is one of the largest producers in the EU (in 1994, it was the third-largest steel producer in the world). The car sector is its largest customer and accounts for 30% of sales. The Steel Makers Association (Fédération Française de l’Acier), which is a signatory to the EA, insisted on being included in the negotiations, when, initially, it seemed as though the steel manufacturers would not be required to participate.

The steel industry is involved in the recycling and recovery of steel from scrapped vehicles and energy from shredded waste (shredded waste from ELVs is used as a fuel to fire furnaces and the waste must meet certain criteria in terms of composition, if the sites using this fuel are to avoid classification as waste incinerators). Usinor Sacilor now have a controlling share in CFF (Compagnie Française de la Feraille). It is believed that the steel industry could benefit from increasing its control over the shredders to ensure a better quality of material for recovery and recycling.

Car manufacture accounts for 15% of sales of plastic in France. Plastic manufacturers are represented by the Syndicat des Producteurs de Matières Plastiques (SPMP) which is a signatory to the EA. The association has 25 members in France and 25 associated members who are importers. Between them, they account for 95% of the French market for plastics (in tonnes). Of the members, Elf Atochem is the largest, accounting for 50% of the market.

Plastic transformation and moulding is covered by the Fédération de la Plasturgie. Members include a few large companies (e.g. Plastic Omnium). In total, the association represents 1,500 companies, which have a labour force of around 100,000 people. There are many other companies in the sector who are not members of this association.

The car dismantlers are represented in the agreement by the Conseil National des Professions de l’Automobile (CNPA), a large organisation covering 18 different professions involved in the car sector including dealers, garages, dismantlers, car rental firms, driving schools and so on. Overall, the association has 30,000 members, out of a total 60,000 actors in the professions covered. The members include 500 dismantlers, out of 900 registered sites. There are also a number of small, unregistered sites operating outside the law. This brings the estimated total number of actors in the dismantling sector to between 2,000 and 3,000 (Etienne Leroy, Pers. Comm., 1997). There is an overcapacity in the dismantling sector. Restructuring is inevitable, and this will lead to an increase in the proportion of dismantlers covered by the agreement.

The shredders and recyclers are represented by the FEDEREC (Fédération Française de la Récupération pour la Gestion Industrielle de l’Environnement et du Recyclage). There are about 45 companies operating shredders in France. About 300 sites deal with ELVS, of which 20 have a large capacity. A large number of these sites are operated by one company, the CFF, which has around 50% of the market. The FEDEREC through its members covers about 95% of the shredding market.

It is also important to consider the main sources of ELVs entering the disposal chain. The rough breakdown by ‘final owner’ is given in Table 1.2 below. Insurance companies, the car dealer network and independent garages account for a large proportion of these ELVs. The dismantlers treat about 80% of these ELVs.

Table 1.2: Sources of ELVs — Last Owners

Two important initiatives influenced the negotiation of the EA on ELVs in France: the EC’s Priority Waste Streams Work on ELVs, and the threat of stringent legislation on ELVs in Germany.

Prior to the negotiations, a number of experts from organisations that are now signatories to the agreement were involved in the national or EU working groups on ELVs set up under the EC’s Priority Waste Streams Work. The French government took the lead in co-ordinating this work at European level, and established a shadow working group in France. This work allowed discussion and data collection on the issue of ELVs at EU level, and resulted in the production of a strategy document making recommendations at EU level for the car sector. This was published in 1994 and included targets to be met at EU level:

• a maximum of 15% landfilling of waste per car, for all cars, by 2002 at the latest;
• for models produced from 2002, no more than 10% landfilling of waste; andno more than 5% disposal by 2015.

While this work on PWS was being undertaken, there were moves in Germany to introduce a regulation on ELVs. In 1990, there were indications that the German Environment Ministry was preparing legislation aimed at obliging car manufacturers to take back ELVs free of charge. A draft proposal, which contained these provisions, and required as much material recycling as possible, was issued in the summer of 1992. The French Ministry of the Environment, in a move to pre-empt German legislation, began preparing a decree on ELVs. The threat of this legislation and the need to address the threat posed by the German approach led car manufacturers to push for discussions on an EA with the French government (Whitson and Glachant, 1996).

The analysis of the French EA on ELVs by Aggeri and Hatchuel suggests that a regulatory approach to tackling the ELV problem would have been hindered by the uncertainties and complexities surrounding the issue and the possible approaches to tackling it. Industry and government faced ‘shared uncertainty’ with respect to the treatment of ELVs (Aggeri and Hatchuel, 1996). There was insufficient knowledge for the formulation of effective regulation and the situation was in a permanent state of flux. The treatment of ELVs requires the development of new technologies, sectors and firms and co-operation between the various actors involved while detailed technical and economic knowledge is required for the laying down of effective regulation. In this case, there were uncertainties about the effects of a strict regulatory approach, in particular in terms of restructuring the car chain, but also as regards the technical responses required to meet the targets agreed in the PWS work, especially as far as quality issues for material substitution, re-use of parts and the economic viability of dismantling, recovery and recycling options were concerned.

For the French government, the need to minimise intervention and reduce the administrative costs associated with new regulations were also important incentives for the adoption of EAs (Pers. Comm., de Tournemire, 1996).

Other actors in the car chain are sensitive to the requirements of car manufacturers, who are important clients both through the purchase of materials and parts for the manufacture of vehicles and as a source of ELVs entering the disposal chain through their networks of dealerships and garages. In addition, the pattern of distribution of responsibilities for meeting the targets for ELVs has important implications for different groups of actors in the car chain because of the restructuring of the sector that such a distribution encourages (Whitson and Glachant, 1996).

There are 24 signatories to the agreement, representing all stages of the supply chain:

• the Ministries of Industry and Environment;
• French car manufacturers and 12 importers;
• trade associations covering the dismantlers, shredders and recyclers, material producers and equipment suppliers.

• a distribution of responsibility for meeting the objectives between the actors;
• respect for the free market;
• free choice between the treatment options: recycling, re-use or energy recovery.

• the design of new vehicles;
• the treatment of ELVs;
• the re-use or recycling of the waste materials.

• a maximum of 15% landfilling of waste per car, for all cars, by 2002 at the latest;
• no more than 10% landfilling of waste for models produced from 2002, and
• no more than 5% disposal by 2015.

• Development of a Standard for Design of new cars – A French (AFNOR) Standard on the ‘design of vehicles to optimise their recycling/re-use at end-of-life’ is currently in the pilot stage (Standard R10.402, disseminated in 1996). This standard is aimed at simplifying and enabling de-pollution (draining of fluids..),removal of parts prior to crushing, crushing and separation of materials, and treatment of the various fractions obtained. The manufacturers are producing technical guidance sheets on the dismantling of non-metallic components.
• Labeling of components – according to the ISO standard developed to aid recovery at EU level.
• Facilitating and speeding up the dismantling of pieces – to make recovery economically viable.
• Choice of materials for use in cars on the basis of their recyclability.
• Integration of recycled materials into new cars.

As described in Section 1.2.2, the French dismantling sector is generally considered to have a poor environmental performance record. The sector includes a large number of small, unlicensed sites which do not comply with legal environmental requirements. Dismantlers treat 80% of ELVs.

The car sales networks and insurance companies have stated that they will use only certified dismantlers. A certification system is currently being implemented (see Section 1.5). The EA is considered to have led to the more rapid implementation of the certification system for dismantlers (French Ministry of Industry). A certification scheme would have been adopted without an EA, but over a much longer timescale.

Restructuring of the dismantling sector is inevitable, with or without the EA, if environmental improvements are to be achieved. The dismantlers have to make substantial efforts (including significant investments – see Section 1.5) to reach the requirements of the EA. It is clear that the EA has required more openness and this has the benefit of increasing the exchange of information. It has also led to increased recognition of the dismantler’s role in the chain, especially by the larger companies. However, it may make dismantlers more vulnerable to attempts by the car manufacturers to control the market for spare parts. In addition, the shredders have an interest in integrating the dismantlers’ activities into their own sector. This has happened in the Paris region.

Car manufacturers are trying to make cars easier to dismantle, and are producing technical guides for individual models for dismantlers, to allow easier identification and recovery of valuable and recoverable parts. There is a trade-off between the weight of a part and the time needed to remove it from an ELV. If it the part is too light, it is not worth the time spent in recovery in terms of the price of the material recovered.

A variety of activities have been undertaken to improve the profitability of recycling and re-use of different components and materials, including work on separation to improve the quality of materials recovered and of fuel for energy recovery and actions to guarantee markets for recovered materials and energy. A specific example includes the work carried out by the CFF at a pilot centre at St Pierre de Chandieu (a joint venture with PSA).

Table 1.3: Results from Tests Carried Out at St Pierre de Chandieu on ELV Treatment

Other specific examples of measures aimed at developing re-cycling and re-use include:

• Usinor-Sacilor have been carrying out research into shredding and the recovery of energy from waste. They have also been involved in the development of a common code for different types of steel, including scrap from cars, to facilitate its sale and re-use across the EU.
• Car material and parts suppliers are also working with the shredders to improve the quality of shredded material for energy recovery. This is in the interest of the waste-users and the shredders.
• Plastic manufacturers are making contractual agreements to buy steam produced through the combustion of plastic waste, to guarantee a market for the energy recovered.

Although there has been information exchange and dissemination between the parties to the EA and their members (e.g. through joint actions, quality standards relating to the design of vehicles, and the technical guides developed for individual car models for use by dismantlers), the information made available to the public has been limited. Recently, following pressure for more transparency, some NGOs (environmental and consumer groups) have been invited to act as observers at meetings.

1.7.1.1 The Reference Situation

Prior to the signature of the agreement in 1993, a maximum of 75% of the weight of an ELV was recycled.

1.7.1.2 The Target

Although the targets in the EA are not set in French legislation, the targets for 2002, of 15% disposal of landfilling for the average car and of 90% recyclability of new cars, correspond with the targets in the ELV strategy from the Priority Waste Streams initiated by the European Commission. The ELV expert group set up in 1991 (and coordinated by the French) published a strategy in 1994 which indicated the following targets for the sector at EU level:

• a maximum of 15% landfilling of waste per car, for all cars, by 2002 at the latest;
• for models produced from 2002, no more than 10% landfilling of waste; and
• no more than 5% disposal by 2015.

1.7.1.3 The Baseline

Business as Usual

The EA addresses the responsibilities of different actors in the car chain. The baseline must cover both the proportion of vehicles currently reaching their end-of-life which is being re-used/re-cycled and changes in the design of vehicles to improve their re-use and recyclability at end-of-life.

There are data available on past and expected future, changes in the materials used in cars by weight (for example see Table 1.1 in Section 1.2.2) and these give some indication of the amount which can be recycled under current technical and economic conditions. However, at present, there are no quantitative monitoring data on improvements in the design of new vehicles.

The data available are insufficient to establish a pattern over time in the proportion of end-of-life vehicles being recycled and re-used. This is likely to vary slightly with changes in the price of recycled materials, which make dismantling and recovery more or less profitable, and with technical developments in separation and recycling techniques.

The baseline will be influenced by two factors, which have opposite effects:

• the trend towards the increased use of plastics in cars which would reduce the recyclability of end-of-life vehicles. Projections presented in the Information document from the EC’s Priority Waste Stream’s Working group on ELVs suggested that the plastic component would rise from 10% in 1985 to 13% in 1995, with a corresponding decrease in the iron and steel content from 68% to 63% by 1995.
• a law passed in 1992 (Law no: 92-646, of 13 June 1992, modified in February 1995) which established a tax on landfilling of 25 FRF (4 ECU) per tonne from January 1995, rising to 40 FRF (6.6 ECU) by 1998, and a ban on the landfilling of all except ‘final waste’ from the year 2002. This will promote the incineration of shredder residues from end-of-life vehicles, with some energy recovery (which is recognised as one means of achieving the targets set in the EA).

Alternative Policies

The EA was negotiated in response to a threat of regulation in the form of a decree from the Ministry of the Environment. However, there is no information available on the effects that decree would have had.

1.7.1.4 Environmental Effectiveness

There are no quantitative monitoring data at present that allow measurement of progress against the business-as-usual baseline for the average ELV. However, results from trials and demonstration activities, undertaken by the parties to the EA, demonstrate the technological possibilities and progress towards the achievement of the objectives for a small sample of vehicles. Tests have shown that it is technically possible to recover or recycle about 94% of the weight of ELVs. Many measures are underway to improve the recyclability of cars but the impact of these is difficult to assess in quantitative terms.

The EA has led to the creation of new working relationships between actors from different branches of the car sector. These actors did not work together in the past. The process of the EA (signing an agreement along with other actors and holding regular monitoring meetings) opens up new possibilities for an exchange of ideas and information.

1.7.2.1 Cost Effectiveness

The EA distributes responsibility for meeting the objectives between the parties, according to their areas of expertise, in order to make the best use of the knowledge and skills available. The EA represents a voluntary commitment on behalf of the parties. Some trade associations (CNPA) consider that greater producer responsibility should be introduced because of the relative financial strength of producers. Producers consider that an imposed measure would not generate the same level of collaboration and commitment. All respondents agree that the EA has led to increased co-operation and trust between actors in the car chain.

The focus of the EA is on changes in car design to improve the recovery of materials and on incremental improvements to the existing, mainly manual, dismantling approach, to improve the technical and economic feasibility of ELV recycling (e.g. changes in car design and dismantling tools to reduce the cost of recovering parts). This contrasts strongly with the mechanised dismantling chains being developed in Germany and the Netherlands. It requires less capital investment and is, arguably, better adapted to the diversity of ELVs entering the dismantling chain.

Through the increased collaboration between actors, described above, it is expected that cost savings can be achieved. However, there have been no estimates of these savings. The EA allows for cost-sharing, in as much as each actor has responsibility for initiatives in its area of expertise. However, one of the large car manufacturers has adopted a more integrated approach. This could have the effect of co-ordinating actions to a greater extent and reducing costs further. Efforts are also underway to assess and develop new markets for recycled products, to improve the incentives for recycling and to introduce solutions which are economically viable.

There will be some restructuring of the dismantlers’ and shredders’ sectors. This is inevitable and would also have been required for the successful implementation of a tax or regulation. Other sectors may benefit from this. For example, the steel company USINOR-SACILOR will benefit from increased control over shredders, as this will help them to ensure that the recycled metal entering their systems is of a higher quality.

1.7.2.2 Technical Change/ Innovation

The approach taken under the French agreement has been to focus on improving the recyclability of new models through design and incremental improvements to the existing labour intensive dismantling and treatment processes. This has resulted, for example, in the development of new tools to speed up the dismantling of recoverable parts, and simplifying car construction to ease dismantling. This contrasts with the approach taken in the Netherlands and Germany where new mechanical dismantling chains have been developed. The parties interviewed consider that a manual approach is better suited to dealing with the diversity of ELVs for disposal.

1.7.2.3 Other Outcomes

The ELV dismantling and recycling industries are an important source of employment for unskilled workers in France. Maintaining employment in the sector is an important objective for the French government since 20% of employment in France is associated with the car sector as a whole.

Certification schemes, being implemented for dismantlers and being developed for shredders, will favour more responsible agents. The French EA has served as a model for similar EAs on ELVs in a number of other EU Member States. (e.g. Spain and Portugal). It may also serve as an example for other EAs in France.

A certification scheme is being developed for the shredders, as described in Section 1.5. When this scheme and the certification scheme for dismantlers are running as planned, a large proportion of the ELVs generated in France will be treated by certified dismantlers and shredders meeting minimum environmental requirements and this will lead to an improvement in environmental performance for the treatment of ELVs. However, until now, progress in certifying has not been as fast as expected (see Section 1.5) and only 3-4% of the dismantlers are certified.

The monitoring provisions under the agreement have been improved, with expert assistance from the ADEME, to develop quantitative indicators of progress. However, the first measurement of these indicators will be made this year to give a baseline, so that the first estimates of progress will be available next year.

The policies adopted for ELVs at European level and in other Member States will affect the development of recycling and recovery options under the French agreement. The Dutch and German agreements are considered by many French actors to pose a threat to the French agreement (Pers. Comm. de Tournemire, Ministry of Industry, 1997; Pers. Comm. Vallat, Renault, 1996). The German charge on disposal of ELVs, paid by the final owner, will, it is thought, lead to imports of ELVs into France.

Quantitative assessment of environmental effectiveness is not possible because of a lack of monitoring data. However, monitoring arrangements are being improved. Tests on a pilot scale show that the targets for recycling, re-use and energy recovery for 2002 are technically feasible and that current technology is close to making the long-term targets of 5% landfilling possible. However, some trade associations and independent experts are more sceptical as to economic feasibility. A number of actions are underway to improve the economic viability of re-use, recycling and energy recovery.

The EA provides a new policy approach, which has resulted in increased consultation between partners, greater information exchange and many joint actions. It is also likely to achieve environmental improvements and cost savings. It is not possible, however, to determine whether it is more cost-effective than alternative policy measures.

1.10 Information Sources

(I= face-to-face interview, T= telephone)
 

Agreement text, 1993, Accord Cadre sur le retraitement des véhicules hors d’usage, 10 March, Paris.

Aggeri, F. & Hatchuel, A., 1994, Regulation as a Learning Process of Economy Creation: the Car waste Case, Paper for the conference ‘The Greening of Industry’, November 13-15, Copenhagen, Denmark.

Aggeri, F. & Hatchuel, A., 1996, A Dynamic Model of Environmental Policies, Paper for the Conference on ‘The Economics and Law of Voluntary Approaches in Environmental Policies’, November 18-19, Venice.

CFF Groupe, 1996, CFF et l’automobile, Compagnie Française des Férailles, Paris.

CNPA, 1992, Le Plan Vert du CNPA, in Automobiles Infos- supplément du no. 930/931.

Gros B. Contribution de l’Acier au Recyclage et à la Recyclabilié des VHU, Usinor Sacilor.

Renault Recyclage, 1996, La deuxième vie de l’automobile, Régie Nationale des Usines Renault SA, Paris.

Whitson T and Glachant M, 1996,Voluntary Agreements between industry and government — the case of recycling regulations, in Lévèque F ed, Environment Policy in Europe: Industry, Competition and the Political Process, Published by Edward Elgar, Cheltenham, UK.

*: The case study was revised by Frank Aggeri (CERNA, Ecole des Mines, Paris)