Select Committee on European Communities Second Report


Letter from Kim Howells MP, Parliamentary Under-Secretary of State for Competition and Consumer Affairs, Department of Trade and Industry, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 24 June 1999[4] informing me that the Committee had cleared my Supplementary Explanatory Memorandum on the End of Life Vehicles Directive dated 21 June. I have also seen Jimmy Hood's letter of 23 June giving clearance by the House of Commons European Scrutiny Committee and am writing to him in similar terms.

  I am grateful that the House of Lords Committee was able to look at this issue again despite short notice and give clearance in time for the June Environment Council. I will make sure that officials see your letter and are aware of the points that are set out in it.

  As you may have heard, the June Environment Council agreed to a further delay, in recognition of concerns expressed by one member State over the approach adopted to producer responsibility. You will recall that the present draft text (Article 5.4) gives each member State a substantial degree of flexibility to decide how best to recover the treatment costs for vehicles scrapped from 2003 onwards. The particular concern of the member State in question related to the possibility that producers would be asked to meet the costs of treatment for the existing vehicles that are already registered throughout Europe.

  You may like to know that senior officials from member States have now agreed a compromise amendment on this point. This would bring forward introduction of the provisions in Article 5.4 for new vehicles to 2001 but delay these provisions for existing vehicles (ie those sold before the introduction of the Directive) until 2006. Senior officials also provisionally agreed to delay the first recycling target from 2005 to 2006 to ensure that it coincides with the application of the new provisions for existing vehicles. While the UK had been prepared to support the December text, we can accept the changes proposed. It will allow more time for consultation and co-operation with business, local authorities and NGOs to help inform the design of our system for implementation. And while the delay in the recycling targets is disappointing, it is only for one year. Moreover, the UK still has the flexibility to introduce free take-back and producer responsibility in advance of 2006 for existing vehicles if we chose.

  Common Position is expected to be formally agreed through a written procedure in the course of next week. It seems likely that we have now succeeded in finalising the text for Common Position on terms which are very similar to the December text and which therefore are acceptable to the UK.

  I apologise for the delay in writing to you but I wanted to wait to give you the outcome of the officials meeting.

26 July 1999

Letter from Patricia Hewitt MP, Minister for Small Business and E-Commerce, Department of Trade and Industry, to Lord Tordoff, Chairman of the Committee

  Further to Dr Howells' letter of 26 July I am now writing to confirm that a Common Position on the End of Life Vehicles Directive has now been agreed on the basis set out in that letter. I am writing as I now have responsibility for this issue following the Ministerial reshuffle.

  To summarise, the text agreed is substantially the same as the one cleared by both the House of Commons and the House of Lords Scrutiny Committees in June. However, that text has been amended as described in Dr Howells' letter of 26 July (ie bringing forward the provisions in Article 5.4 for new vehicles to 2001, but delaying these provisions for existing vehicles until 2006 and delaying the first recovery target from 2005 to 2006).

  I attach an updated Regulatory Impact Assessment that takes into account these amendments.

28 September 1999


Council Preliminary Agreement December 1998
4  (hazardous material)£0 plus redesign and other heavy metal restrictions
5  (take back)£233 million plus collection (possible overestimate)
6  (treatment)£6 million (possible underestimate)
7  (targets)£26 million 2005—£102 million 2015 plus redesign
8  (coding and manuals)£4 million plus coding
9  (information)£43 million
Total Costs£312 million 2005—£388 million 2015

  Article 5.4 of the Council Preliminary Agreement gave each Member State a degree of flexibility to decide who would incur the costs for the treatment of ELVs from 2003 onwards, subject to the restriction that car producers should meet "all or a significant part" of these costs.

  The Common Position text now brings this provision forwards for new vehicles to 2001—and moves it backwards for existing vehicles to 2006. It still requires the collection of all end-of-life vehicles and higher treatment standards from the introduction of the Directive, although each Member State is allowed 18 months for implementation. Whilst these costs will be incurred by the UK, one way or another, they might or might not all fall directly on the producers. Each Member State would still be able to pass national legislation allowing them to place these costs onto the producers before 2005, if they chose to do so.

  Overall, the costs associated with meeting the recovery and recycling targets will be slightly lower. Apart from not incurring higher dismantling and reprocessing costs in 2005, the capital investments in infrastructure, recycling capacity etc will take place up to one year later. Once discounted, these costs will be perceived now as being lower. The delay will also mean that there will be an additional year for producers, dismantlers, recyclers etc to plan for the targets and put the necessary infrastructure and other required investment in place. This should lead to lower costs, at the least in the initial years.

  The environmental benefit, estimated at £1 million, will fall due to the potential one year delay in the achievement of the recovery and recycling targets. This fall will, however, be small as it will only reflect one year's difference between the 2005 recovery/recycling rate achieved and the 85 per cent/80 per cent targets. We currently recycle or reuse some 77 per cent of the weight of ELVs, and would expect the difference between this rate and the target to rise over the next six years as the country moves towards compliance.

Letter from Patricia Hewitt MP, Minister for Small Business and E-Commerce, Department of Trade and Industry, to Lord Tordoff, Chairman of the Committee

  I am writing to keep you informed of the latest developments on the proposed EU End of Life Vehicles Directive.

  On 3 February 2000, a plenary session of the European Parliament passed 33 amendments to the Common Position text of this Directive. It seems clear that there is strong opposition to many of these amendments from member States. It now appears therefore that conciliation on this Directive between Council and European Parliament is inevitable; the formal conciliation process is likely to begin in mid-March and can take up to eight weeks.

  It seems to me that the two most important issues for the UK are the producer responsibility provisions in this Directive, and the proposed restrictions on the use of heavy metals in new vehicles.

  Producer Responsibility—The Common Position text states that vehicle producers must meet "all or a significant part" of the costs of treatment for existing vehicles from 2006 onwards. It is important to be clear that scrapped vehicles would have to be treated in accordance with the Directive from around 2002 onwards (member States will be given 18 months to implement the Directive). Under this text we may decide (within limits) what the size of the producers' contribution should be, and how best to fund any remaining costs.

  This means that—between 2002 and 2006—member States would either have to find alternative ways to meet all of the treatment costs or pass national legislation requiring the producers to pay some or all of these costs.

  However, one amendment passed by the European Parliament would mean that member States only had to hold producers responsible for meeting treatment costs for new vehicles, sold 18 months after the Directive came into force (2002). These vehicles would not begin to be scrapped in significant numbers until 2010-15—and this could mean that member States would have to find alternative means of funding the costs, or pass national legislation covering the period until 2015. We will study this amendment carefully, but it seems to me that our objective should be to secure the greatest flexibility in practice to decide how best to recover these costs.

  Restrictions on the use of heavy metals—The Common Position text strikes a balance between environmental improvements and the needs of industry, by placing a ban on the use of heavy metals (lead, cadmium, hexavalent chromium and cadmium) in vehicles sold from around 2002 onwards, except for certain exceptions listed in an Annex to the Directive, where the producers have argued that heavy metals are essential and no viable alternatives are available.

  Parliament has passed two amendments on this issue. They have suggested that these restrictions should only apply to new vehicle models introduced after 2005, to give producers greater time to meet the restrictions. They have also suggested that a number of additional items should be included in the Annex of exceptions, where the producers have come forward with further arguments for their inclusion. We are considering both of these amendments.

  A number of less critical issues will also be covered at conciliation:—

    —  Collection points—We may want to allow end of life vehicles to be delivered first to car dealerships or collection points for storage, before they are passed on to shredders. Two Parliamentary amendments would require collection points to hold waste management licences even if they were not dismantling or shredding the vehicle. This would deliver no environmental benefit and we intend to oppose these amendments;

    —  Historic vehicles—Some classic car owners have been concerned that some member States (not the UK) might use this Directive to scrap historic vehicles. Three Parliamentary amendments are designed to exempt these vehicles from the scope of the Directive. We can accept the spirit of these amendments, although some redrafting may be needed;

    —  Mercury—Three Parliamentary amendments would require the separate removal of mercury from vehicles before they are shredded. We are considering these amendments, and in particular checking whether the environmental benefits would outweigh the costs;

    —  Used parts—One Parliamentary amendment would extend the Directive so that used parts removed from vehicles when they are repaired would also have to be collected and properly treated. We are considering these amendments, and in particular whether the environmental benefits outweigh the costs.

  We will of course be working with other member States to ensure that the Council can negotiate a package which is acceptable overall for the UK.

29 February 2000

4   Printed in Correspondence with Ministers, 17th Report, Session 1998-99, HL Paper 94, p 19. Back

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