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New Japan car recycling law to fan competition

New Japan car recycling law to fan competition
TOKYO - Japanese auto makers will face more competition to produce eco-friendly cars as a new law comes into effect next year requiring manufacturers to charge drivers for the recycling of their vehicles.

Starting January 1, car owners will be asked to pay about 7,000 to 18,000 yen ($65 to $166) per disposed vehicle, according to the government\'s latest estimates, to cover the recycling of chlorofluorocarbons (CFCs) - a harmful gas used in air conditioners - airbags and automobile shredder residue (ASR).

The law is part of the government\'s solution to meet the rising cost of disposing of car-related scrap as landfill sites become scarce. Japan is also aiming to raise the recycling rate for cars to 95 percent by 2015, from around 80 percent now.

Because the fees would differ from model to model depending largely on the amount of waste produced, car makers are under pressure to come up with ways to keep them down, thereby attracting cost-conscious customers.

\"We would try to bring down the fee by coming up with the best materials to use for various parts at the design stage, as well as by developing ways to incinerate ASR and reuse the energy produced,\" said Toru Tohata, general manager of Nissan Motor Co.\'s (7201.T: Quote, Profile, Research) recycling promotion department.

Nissan, Japan\'s second-biggest auto maker, became the first to publish estimated recycling fees yesterday, saying it would try to hold down the cost for models launched after the law takes effect. The recycling fee for all cars sold after January will be collected at the time of purchase.

For the popular March compact, Nissan said the fee would range from 9,780 to 10,340 yen, depending on the number of airbags. The big Elgrand minivan would carry a fee of 16,020 yen.

That excludes an additional maintenance fee of either 510 or 610 yen that all customers will be charged for collecting and managing data and the pool of recycling fees to be centralised at a newly created industry body.

The price, which will be uniform across all brands, will be finalised by the end of this month.

Other domestic auto makers are scheduled to publish their recycling charges, which the government must approve for accuracy, by the end of this month. Imported brands will have until the end of August.


Some efforts are already being made across the Japanese car industry to cap recycling costs. To facilitate the recovery of airbags, which make up about a quarter of the total fee, most cars in Japan now use an electronic system which allows all airbags mounted in a car to be activated simultaneously using a special control switch.

\"Almost all domestic cars have this system now, which is a much cheaper method of recycling airbags,\" said Akihiko Miyamoto, an official at the automobile division of the Ministry of Economy, Industry and Trade.

Auto makers will also compete to reduce ASR, which comprises resin, rubber, glass and other materials and accounts for the bulk of the recycling fee, through collective and individual efforts.

Virtually all of the estimated 550,000 to 700,000 tonnes of ASR produced in Japan annually end up in landfills, with each passenger car responsible for an average 190 kg (419 lb), according to industry estimates.

Car makers say the legal requirement of recycling at least 30 percent of the ASR after 2005 can easily be cleared, but add that they will face competition to do better since that would directly lower the recycling fee passed on to consumers.

By 2010, the required recycling rate will rise to 50 percent, and to a further 70 percent by 2015.

\"By boosting the recycling rate, we will aim to lessen the burden placed on customers,\" said Hiroyuki Watanabe, a senior official who oversees Toyota Motor Corp.\'s (7203.T: Quote, Profile, Research) environmental division.

Japan\'s top auto maker leads rivals in the effort, partly using materials that are easy to recycle through the development of biodegradable plastics.

Toyota is also building cars with components that can be removed quickly. Shortening the time required for dismantling would help lower recycling costs because dismantlers generally charge fees based on labour time.

Car makers will also aim to cut costs by more efficiently recovering, transporting and recycling shredder residue.

Finding a way to cheaply distribute ASR to the country\'s recycling facilities evenly is one of the challenges they face: In eastern and western areas of Japan, the capacity to recycle the residue exceeds production, while it falls drastically short in central areas, which produces the most ASR.

To best tackle this and other tasks, Japan\'s 12 car makers and eight major car importers have formed two competing teams led by Toyota and Nissan, each with the aim of generating economies of scale by combining efforts to collect ASR. \"It was possible to keep estimated recycling fees down through the idea of collective disposal,\" said Kiyoshi Masuda, a Toyota official who also heads the recycling division for the Japan Automobile Manufacturers Association, an industry body.

\"These efforts will continue to lower the costs further.\"

Story by Chang-Ran Kim, Asia auto correspondent

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