BRUSSELS - For two years, European car companies have argued that the proposed European Union car recycling law is filled with flaws. Environmental bureaucrats made some changes, but still ignored the biggest industry concern - who pays for scrapping the 150 million vehicles already on European roads when they're ready to be recycled?
The EU Council of Ministers says the industry is responsible if the old vehicle has no scrap value. Carmakers say they aren't going to pay to recycle cars made before legislation comes into in effect.
On 24 June, the end-of-life vehicle directive was due to be voted on by the EU's environmental ministers and passed to the European parliament for a final vote.
Days earlier, Volkswagen Chairman Ferdinand Piech had discussed the issue with German Chancellor Gerhard Schroder, the former prime minister of the German state of Lower Saxony which owns 20 percent of VW. Until he was elected chancellor this spring, Schroder sat on VW's supervisory board.
Sources say Piech convinced Schroder to withdraw his support of the end-of-life vehicle legislation. Piech and other German auto company chiefs met with Schroder in Bonn on 21 June to voice their concern.
In Brussels, Germany dropped its support and the end-of-life directive was postponed. The UK backed Germany, and Spain said it would abstain if a vote were taken. The minority needed to block the end-of-life legislation was reached. The earliest regulators can re-examine the proposal is this autumn, when a new European Commission will take office.
Between now and October, environmental experts will address the industry's major problems with the regulation and propose different deadlines for taking back vehicles free of charge. It will also consider other amendments demanded by ACEA, the carmakers' lobby group.
But the end-of-life discussion is far from over. Finland, which took over the rotating presidency of the EU from Germany on 1 July, has pledged that legislation will be passed during its six-month term.
The recycling law would have required carmakers to bear the cost of taking back millions of end-of-life vehicles. This would cost the industry euro 13.2 billion if it had to pay for all 150 million cars on the road in Europe today, according to ACEA. German automakers have put the cost at DM370 (euro 187) per car.
'We can't be held responsible for cars we produced and sold after we had these additional requirements,' said Didrik de Thibault, director of parliamentary affairs for ACEA.
ACEA wants carmakers to be responsible for cars they manufacture beginning the day the regulation takes effect, 1 January, 2003. The industry would have to pay the cost of recycling a car at the end of its life if it has no remaining value.
The EU initiative would also require carmakers to recover and reuse 85 percent of the car's weight in 2005. The level would rise to 95 percent in 2015.
ACEA isn't fighting the 2005 targets. It says that today an average of 75 percent of a vehicle's curb weight is recycled in member countries with a state approved recycling program. But ACEA says reaching the 95 percent level would be difficult and has proposed that the level be reviewed in 2005 to determine whether it is feasible.
The major problem with meeting 2015 goals may be compliance with other EU requirements. New pollution and fuel economy/CO2 initiatives will require lighter cars with lower fuel consumption. These vehicles may have to use less steel, which is easily recycled, and more composites which aren't.