Memorandum by Universal Salvage plc
THE ECONOMIC IMPACT OF THE EUROPEAN UNION,
END OF LIFE VEHICLES DIRECTIVE
A brief report from Universal Salvage plc, submitted
to the Parliamentary Select Committee, examining the economic
impact of the European Union End of Life vehicles Directive.
You will have received a detailed report from
Dr Charles Ambrose, representing, not only his own company "Charles
Trent Ltd", but also the other dismantler members of the
CARE group, which Universal Salvage plc is a member of.
The report produced by Dr Ambrose, is very detailed
and gives a very accurate account of the current problems facing
the more professional vehicle dismantler in the UK. I thought
it would be beneficial to give you an insight into another section
of the salvage industry, so you can see that the forthcoming ELV
directive will affect large and small companies alike.
Universal Salvage plc is the largest service
provider to the insurance industry in the UK. We have just over
37 per cent of the market, and will this year handle in excess
of 130,000 accident damaged vehicles. The company has been offering
the insurance industry, as well as vehicle manufacturers, over
the past 30 years a wide range of services. We are the only Public
Limited Salvage Company currently represented on the stock market,
and this year is likely to have a turnover of £100 million.
So as you can see we are a very large organisation which depends
greatly on the UK having a viable dismantler industry.
To explain this in more detail, as stated earlier,
we will handle around 130,000 accident damaged vehicles this year,
through our ten sites nation-wide, and run our own fleet of 140
vehicle transporters. Our main core business is to store these
accident damaged vehicles until the insurance companies categorise
them, using the ABI (Association of British Insurers) Code of
Practice. The ABI code will, depending on the severity of the
vehicle damage and its age, put the vehicle into one of the following
categories "A", "B", "C" or "D".
To give you a brief description of these categories (I have enclosed
one of our categorisation guides to give you more detail).
Category A Vehicle burnt-out or very severely
damaged. (Not sold at auction, put through processing only)
Category B Vehicle damage excessive, to be dismantled
for spare parts use only and body to be destroyed.
Category C Financial total loss, vehicle
to be repaired and put back on road.
Category D Same as Category C but newer vehicle
or stolen & recovered vehicle.
From what we can gather, although this has yet
to be confirmed by Government, all category A and B vehicles will
be regarded as "End of Life" vehicles as the last owner
will have discarded them in the current form.
We currently offer all the vehicles we handle
for the insurance industry (excluding Category "A",
see above), for sale by auction. We hold two different types of
Closed Breaker Auctions
This would be for the entire category B vehicles,
and the only people who can attend are approved dismantlers who
hold a Full Waste Management Licence or an Exemption.
We control and audit this to ensure that all
the vehicles are as detailed in the Code of Practice, fully dismantled
and the bodies destroyed. We don't auction category A vehicles
as they are so badly damaged, so are only suitable for ELV processing.
Open Salvage Auctions
These would be for all category C and D vehicles
and can be sold to the general public, as long as they have pre-registered
So as you can see we, in support of vehicle
security and environmental control, will only sell our Breaker
category B vehicles to approved dismantlers, who are registered
with the Environment Agency.
Of the 130,000 vehicles we will handle this
year, the split will be as follows:
So as you can see, over 50 per cent of the vehicles
we handle will be categorised as ELVs also Hazardous Waste.
Up until 1998, we used to sell our entire category
B vehicles at our auctions, as the dismantlers would buy them,
if only for their scrap value. With the drop in scrap metal prices,
and the increase in landfill taxes, the lower value category B
vehicles, with very few saleable parts are no longer a viable
purchase for the vehicle dismantlers. So we have seen over the
past two to three years, that we now have a lot of vehicles that
we cannot sell, on average we find that 14/15 per cent of the
category B vehicles, are not viable to sell as dismantler donor
vehicles. So as a company we will this year have to handle not
only the 9 per cent of the category A vehicles, but also 15 per
cent of category B vehicles (24 per cent over 40,000 units) as
low value ELV's.
To accommodate this we have applied for and
obtained Waste Management Licenses at all of our sites. We have
also set up ELV processing facilities, from Greenfield sites.
To date we have spent well over £2 million setting these
up as they have all been designed to meet the full Annex 1 requirements
of the ELV Directive. Part of Dr Ambrose' report details work
carried out by the CARE groups Annex 1 working group, on the likely
costs of setting up approved treatment centres to Annex 1 standards.
A lot of the practical work for the surveys was carried out on
our sites. We have also had the local EA representatives bring
people to our site, to show them how they expect ATC's to be correctly
So as you will appreciate, we as a company have
not only taken steps to set up suitable processing sites for ELVs,
we have incurred a lot of expense, mainly in the expectation that
the UK Government will implement the ELV Directive correctly.
Also that the professional dismantlers and shredders, who have
also in their own way, invested heavily will not be disadvantaged
by "back street operators".
I am on the CARE Management Committee as well
as the BVSF's Management Committee, so we have spent a lot of
time over the past four/five years attending meetings with DTI,
DETR, EA and now DEFRA. At all these meetings we have tried to
explain to the various Government representatives, that with the
exception of the approved dismantlers that purchase accident damaged
vehicles for the purpose of dismantling them for parts that the
average ELV or abandoned vehicle is not drained of fluids. Nor
has its battery been removed or any other form of depollution
been carried out, before it is fed into the metal shredders.
So as explained earlier, around 50 per cent
of the accident damaged vehicles fall into category A or B, so
of the overall UK accident damaged vehicles most of 500,000 units,
around 250,000 are correctly depolluted by dismantlers. These
with licences or exemptions leaving, of the annual 1.8 million
ELVs, 1,550.00 that are not depolluted in any way!
So if the UK Government is to implement this
directive correctly, it has to support the operators who have
not only invested in ensuring that vehicles are correctly environmentally
handled, but also in professional companies and not just carry
out a paperwork exercise in handing out permits to any company.
This Government has an ideal opportunity to
introduce environmental controls in line with more forward thinking
European countries, instead as it is today, letting the professional
dismantlers and shredders down, and being seen by Europe as a
All we ask is for a level playing field. And
that the back street operators who have no interest in the environment
are not allowed to have a financial advantage over the professional
companies. Especially the ones who have supported this directive
from day one and invested in their premises, in line with the
requirements detailed in the ELV directive. Expecting that the
UK Government want to lead environmentally in Europe and not be
Environmental Services Director