About the Japanese End-of-life Vehicles Recycling Law 1. The structure of the Law

other file (by the Japanese government) 2. Short history of the Law year Around 1990 Teshima Case appeared, in which a lot of automobile shredder residue

(ASR) was dumped illegally, and industrial waste became a social problem.

1995 The criteria for dumping ASR were strengthened. The holders of ASR became unable to dump it in a simple and cheap landfill site. ASR has to be dumped in a controlled and expensive landfill site.

1997 The government announced a guideline for recycling and disposal of end-of-life vehicles.

Jury 2002 The Law for the Recycling of End-of-Life Vehicles was enacted. January 2005 The Law for the Recycling of End-of-Life Vehicles took effect. 3. Comparison with German system

Japan Germany Common characteristic

• Producers take back some waste objects free of charge． • Producers are responsible to dispose of waste. • When producers delegate the recycling and disposal to some

recycling operators, they select and monitor the operators. • The selection and monitoring is getting stricter with the degree of

the responsibility. Differences • Producers take back objects

after separating ELVs. • Producers are responsible to

dispose of only the objects. • Producers aren't responsible

for the disposal until the objects are collected.

• Collection fees of the objects are paid to the separating operators.

• Producers select and monitor the recovery and disposal operators.

• Producers take back ELVs before separating them.

• Producers are responsible to dispose of the whole ELVs.

• Producers aren't responsible for the disposal until the ELVs are taken back.

• Delivery fees of the ELVs are paid to the holders.

• Producers select and monitor the separating operators as well as the recovery and disposal operators.

ELV Parts, materials Recovery or

Disposal Separating Vehicle Use

ELVs 3,000,000—4,000,000? (see below) 700,000? Exported used vehicles

1,000,000-1,400,000? (see below) 2,300,000?

4. The number of the ELVs When a vehicle becomes end-of-life, the collection operator of the vehicle has to report the situation to the JARC. Therefore, the JARC and government can compile the number of ELVs generated in Japan. But if the collection operator doesn’t report it, the JARC and government cannot monitor the total number of the ELVs. Some dismantlers don’t have an incentive to report the result. This is illegal behavior. People say that not reported end-of-life vehicles are from 500 000 to 1 000 000.

Table 1: The number of the unused vehicles in fiscal 2005 Total 5 000 000 (1)Exported used cars 1 350 000 (2)Increased stock of used cars 100 000 (3)ELVs dismantled inland 3 050 000 (4)Other 500 000

Source: Estimation by the METI (Ministry of the Economy, Trade and Industry) Total number of the unused vehicles in fiscal 2005 = number of vehicles owned in March 2005 + number of new vehicles – number of vehicles owned in March 2005 Some car dismantlers take the cars as secondhand and dismantle them without reporting the collection to JARC. This is illegal and the number is not included in the above “(3)ELVs dismantled inland”. Some legal dismantlers say that the above “(4) Other” is the number of illegal channel. Recently, auto auction business is developed and it is getting easier to get secondhand. Substantially end-of-life vehicles are traded at the auction as secondhand. 5. Exported used cars Table 2: Top 20 (in 2005) countries (calendar year)

Countries 2001 2002 2003 2004 2005 2006

1 Russia 26143 42771 68123 120052 268584 202603

2 New Zealand 86373 125112 144349 135006 132600 60899

3 United Arab Emirates 40749 87957 108236 144090 113818 74852

4 Chile 5984 8461 14410 27400 47487 29899

5 United Kingdom 18143 29761 55484 57006 31962 16668

6 South Africa 8273 14105 22207 37896 31405 17255

7 Philippines 14326 25027 28177 32942 21497 13079

8 Peru 23865 33870 29463 21834 19510 14656

9 Kenya 6593 11358 13408 16929 18317 12386

10 Sri Lanka 8643 20866 26921 18892 17539 15042

11 Malaysia 7312 10840 11023 11586 17531 8348

12 Kazakhstan 35 243 4195 6489 16970 19564

13 Australia 10792 13792 8074 11036 14157 4905

14 Cyprus 12858 18914 15788 20127 12706 6652

15 Pakistan 324 1944 1952 2370 11776 29997

16 Singapore 7982 10810 9976 12500 11495 9472

17 Suriname 4219 7856 9399 10599 11274 5477

18 Bangladesh 10083 13072 9073 7573 10559 6112

19 Jamaica 13463 18214 15312 15917 9493 5968

20 Trinidad and Tobago 5961 11526 11127 10298 8930 5459

Total 371090 603866 712968 835233 940298 638582

* the data in 2001 is from April to December. ** the data in 2006 is from January to July source: Trade Statistics of Ministry of Finance (MOF) In MOF Trade Statistics, vehicles with prices less than the 200,000 yen are not calculated. Therefore, the real number is more than the above. In addition, the data in Table 1 is that of the fiscal year and different from the data of Table 2. 6. Other information The number of illegal dumping and improper storage of scrapped cars Total Improper storage Illegal dumping

March, 2006 57 080 44 203 12 877

September, 2005 76 954 62 468 14 486

March, 2005 140 436 122 599 17 837

September, 2004 218 359 195 860 22 499

Source: Ministry of Environment The number of authorized (licensed) operators March, 2005 September, 2005 March, 2006

Collection operators 85 144 87 513 88 251

Dismantling operators 5 490 6 042 6 279

Shredding operators 123 120 124

Source: Ministry of Environment Licensed dismantling operators include some car dealers and repairing operators who don’t dismantle the cars as daily business. However, they sometimes salvage the used parts. In order to do it, they have to get the license for the dismantling operator. Some

people say that the substantial number of dismantling operators is around 2500. 7. A problem of Japanese ELVs Recycling Law In Japanese law, the government wants the last car user to pay the recycling fee. But it does not work. The last user can deliver its car to the car dealer or dismantler without paying the recycling fee. The reason is in the payment structure of the recycling fee. In the law, • The first vehicle owner pays the recycling fee to the producer. • When the owner can find the next owner, the former owner can get the fee from the

next owner. This means the former owner gets a refund of the fee and the next owner pays the fee instead of the former owner.

• When an owner can not find the next owner, it becomes the last owner of the vehicle and delivers it to a collection operator. The collection operator does not pay the fee to the owner.

vehicle price fee

Collection operator

Last owner Former owner

The problem is that the last owner is not necessarily equal to the last user. The dismantler often becomes the last owner and pays the fee.

User

Car Dealer Dismantler

price

end-of-life

Dismantler

price (B)

end-of-life

Car Dealer

(C)

price+fee

secondhand Dismantler

Producers (JARC)

Recycling fee

(A)

price+fee

secondhand

(1)

(2) end-of-life

(3) price

*The recycling fee is for the CFC, the airbag and the automobile shredder residue (ASR). Case Last owner Collection operator (1) User Car Dealer (2) Car Dealer Dismantler (3) Dismantler Dismantler In the above situation, the car dealer has to decide whether he/she should take the car

from the user as end-of-life or secondhand. • If the dealer takes the car as secondhand, it has to pay recycling fee to the

user.(situation (A)) • If the dealer takes the car as end-of-life, it doesn’t have to pay the recycling fee.

(situation (B)) The user wants the dealer to take the car as secondhand because it can get the recycling fee from the dealer. The car dealer doesn’t have enough bargaining power against the car user. Therefore, the car dealer often takes the car as secondhand and it pays the recycling fee to the user. Similarly, the dismantler doesn’t have enough bargaining power against the car dealer. Therefore, it often takes the car as secondhand and it pays the recycling fee to the dealer. (situation (C)) As a result, the dismantler becomes the last owner of the car in the eye of the law and pays the recycling fee. The car user doesn’t pay the recycling fee in the system.