ANALYSIS - EU motorists face green scrap tax

LONDON - Millions of Europes motorists face as yet unknown extra charges as governments move to implement a new European Union law governing the scrapping of used vehicles. About 160 million cars are currently on Europes roads, and from 2007 manufacturers will have to take back without charge any scrap vehicle, regardless of when it was built. Some EU countries have already put taxation and recycling systems in place - charging motorists either an annual fee, an insurance tax or a one-off payment. But others with major car industries have yet to decide who will pick up the bill from 2002, when the new law starts to take effect. "The situation is exceedingly confusing, with each country responding in its own way. I think that in countries where the car makers are strong, governments will be sympathetic as they dont want to threaten jobs," Tony Bird, chairman of the European Recycling Federations ELV committee, told Reuters. "None of us from our industry or from the automotive industry is exactly sure how it is going to work," Bird said at a BIR (Bureau of International Recycling) conference earlier this week in Duesseldorf. Bird said his body would be lobbying governments to come up with a uniform European system for collection and charging and was talking to industry so that synergies could be developed. "Once the legislation is in force we are going to have to charge a minimum of $80 to remove hazardous materials and fluids and dispose of waste," Bird said. "These costs will rise substantially once vehicles produced after July 2003 find their way into our recycling plants since potentially costly heavy metal restrictions come into operation at that point," he said. He estimated that British motorists would probably have to pay around 50 pounds per car. In Denmark motorists already paid 90 kroner a year per car, and in the Netherlands there was a single 150 guilder payment. Scrap vehicles generate around nine million tonnes of waste a year and under the EU law recyclers will have to remove oil, anti-freeze and other contaminants and pay for the cost of disposing of this toxic waste. The law will force the car industry to recycle or re-use 80 percent of car weight from 2006, rising to 85 percent by 2015. Around 75 percent of material is already recycled or recovered. Manufacturers have estimated the industry will have to take significant charges against future earnings - of up to 10 billion euros ($9.74 billion) - to meet this regulation. Britains Society of Motor Manufacturers and Traders (SMMT) said earlier that the UK industry would face a 300 million pound ($479.8 million) bill to pay for the 1.5 million vehicles that are scrapped each year in the country. SPANISH FORWARD PLANNING But Alvaro Rodriguez Martinez of Spanish metals recycler Lajo y Rodriguez said forward planning by EU governments could have avoided any need to charge motorists for scrapping and safely disposing of cars. In Spain recyclers, shredders, car makers and the government had got together to work out a voluntary agreement to comply with the law. About 300 of Spains 2,500 dismantlers, mainly the largest firms, were investing to comply with the EU law for handling hazardous waste. Only those 300 companies were authorised to scrap cars at the end of their life and to give out certificates showing that vehicles had been disposed of in a responsible way. "There is no tax on the motorist. The EU directive gives the option for initially financing a scheme with no tax. We think that the value of the car should be enough to finance the decontamination," he said. "Lets say, before you got 10,000 pesetas from a scrap dealer when you went to get rid your car, now maybe you will get 1,000 pesetas and the difference will cover the cost of recycling," he told Reuters. Denmark introduced a new law for scrapping vehicles in July, Poul Norregaard of trading firm H.J. Hansen said at the BIR conference. The cost of dismantling and recycling was covered by a fund financed through the insurance system. "So far the new treatment system has been a moderate success as the collection of scrap cars has been low this year due to bad sales figures for new cars," Norregaard said. Andreas Jungersen of Denmarks Uniscrap trading firm told Reuters that when drivers went to scrap their cars they were paid about 170 euros, but then they had to pay the dismantler for taking out the contaminants, which cost about 100 euros. In the Netherlands, motorists buying a new car paid 150 guilders to cover future recyling, and the last owner of the vehicle got the car recycled for free, an environment ministry official said on the sidelines of the BIR conference. Story by Camila Reed REUTERS NEWS SERVICE