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SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers Related to the Recovery of End-of-Life Vehicles (ELVs) Shahin Rahimifard Advanced.

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Presentation on theme: "SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers Related to the Recovery of End-of-Life Vehicles (ELVs) Shahin Rahimifard Advanced."— Presentation transcript:

1 SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers Related to the Recovery of End-of-Life Vehicles (ELVs) Shahin Rahimifard Advanced Manufacturing Systems and Technology Centre Wolfson School of Mechanical and Manufacturing Engineering Loughborough University

2 SR - Cost Drivers Learning Event February 2004 - Gaydon Advanced Manufacturing Systems and Technology Centre AMST Centre was formed in 1990. One of the registered R&D centres of the Department of Trade and Industry (Dti). Involved in more than twenty major National and European R&D programmes, and also a large number of short term industrially fund project. Centre’s activities are typically based on : - ­Manufacturing Systems Engineering ­CAD / CAM Technologies ­Production Planning and Control ­Information Modelling and System Integration ­SME Manufacturing Research ­Sustainable Product Design and Manufacture www.lboro.ac.uk/AMSTC

3 SR - Cost Drivers Learning Event February 2004 - Gaydon 1)Environmental Conscious Manufacturing Versus Sustainable Development 2)Closed Loop Manufacturing 3)End-Of-Life Vehicles (ELVs) Directive 4)Cost Drivers Related to the Recovery of ELVs 5)Concluding Remarks Presentation Contents

4 SR - Cost Drivers Learning Event February 2004 - Gaydon Environmentally Conscious Manufacturing (ECM) Environmentally Conscious Manufacturing (ECM) concepts are concerned with minimisation of the negative impact of manufacturing activities on the environment through developing equipment, methods, procedures and environmental standards. Sustainable Development Social, Economical, and Environmental Sustainable Development is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. The contemporary view of this concept is based on three pillars of Social, Economical, and Environmental issues. Environmentally Conscious Manufacturing versus Sustainable Manufacturing

5 SR - Cost Drivers Learning Event February 2004 - Gaydon Product Life Cycle Approach to Sustainability

6 SR - Cost Drivers Learning Event February 2004 - Gaydon Life Cycle Approach to Sustainability

7 SR - Cost Drivers Learning Event February 2004 - Gaydon Transformed Traditional Manufacturing Sustainable Manufacturing One of the Major Goals of Sustainable Manufacture

8 SR - Cost Drivers Learning Event February 2004 - Gaydon Sort/Assess the used products Re-process/Recover Collect SupplyManufactureUse Additional Activities within Closed Loop Manufacturing

9 SR - Cost Drivers Learning Event February 2004 - Gaydon Remanufacture  Remanufacture is where the discarded products are repaired, reconditioned and re-supplied. Typically remanufactured products do not change shape or functionality. Reuse  Reuse is the disassembly and reclamation of parts, components, and modules within discarded products for reuse in old or new products. Recycle  Recycle is the reclamation of the material from parts, components, and modules within discarded products. Incineration  Incineration is the reclamation of energy within the parts, components, and modules of discarded products as the last resort when all the aforementioned options are not possible. Product Recovery Options

10 SR - Cost Drivers Learning Event February 2004 - Gaydon A Holistic View of Product Recovery Options

11 SR - Cost Drivers Learning Event February 2004 - Gaydon A simple equation for calculating the EOL value of a product to a company is :- If EOL Value = End-of-life product value to a company EOL Revenue = Revenue from material and components for reuse Cost Col & Trans = Cost for collection and transportation of EOL products Cost Reco & Recy = Cost for processing EOL products Cost Resell & Redis = Cost of resell and redistribution of recovered parts and material Then EOL Value = EOL Revenue – [ Cost Col & Trans + Cost Reco & Recy + Cost Resell & Redis ] End-Of-Life (EOL) Value

12 SR - Cost Drivers Learning Event February 2004 - Gaydon SupplierManufacturerDistributorCustomerCollector Recoverer  Used products are returned to the original manufacturer  Manufacturing activities are expanded to include recovery operations Business Model 1 to Support Product Recovery  Often is based on a Product Leasing initiative e.g. photocopiers, PCs

13 SR - Cost Drivers Learning Event February 2004 - Gaydon Independent Recoverer : : Supplier Manufacturer Distributo r Collector Supplier Distributor Collector Customer Manufacturer  Independent recoverer carries out the recovery processes  Recovered products can be supplied back to original manufacturer or be sold to any third party customer Business Model 2 to Support Product Recovery  More suitable for consumer products with a wide geographical distribution e.g electronic and electrical goods, cars, packaging waste

14 SR - Cost Drivers Learning Event February 2004 - Gaydon Environmental Legislation New Technology & Processes Market Conditions Materials, Resources, & Skills Cost Drivers in Sustainable Product Design and Manufacture Major Cost Drivers In Sustainable Product Design and Manufacture

15 SR - Cost Drivers Learning Event February 2004 - Gaydon To cope with the environmental effects of estimated ‘nine million’ tonnes of vehicles that reach the end of their useful lives each year in Europe, the European Union drew up the End-of-Life Vehicles (ELVs) Directive which came into force on 21 October 2000. Member States should have transposed the Directive into national law by 21 April 2002. The ELV directives came into force in the UK on the 3rd November 2003. Purpose is to encourage the design of new vehicles that :- a) Facilitate dismantling, reuse, recovery and recycling of their components and materials, b) Integrate an increasing amount of recycled materials into new products, and c) Limit the use of hazardous substances. End-of-Life Vehicles (ELVs) Directives

16 SR - Cost Drivers Learning Event February 2004 - Gaydon  Producer Responsibility  Producer Responsibility is one of the main features of this directive whereby the Vehicle Manufacturer is responsible for the take-back and recycling of all the vehicles they produce from 2007. Producers (vehicle manufacturers or importers) to pay ‘all or a significant part' of the costs of take back and treatment from January 2007. Producers, Dismantlers and Shredders etc. to establish adequate systems for the collection of ELVs from the outset.  Recovery Targets  Recovery Targets for all End-of-Life Vehicles by weight have also been set by the ELV Directive which are :- 85% of by January 2006 (minimum 80% recycling), and 95% by January 2015 (minimum 85% recycling). A Summary of ELVs Directives

17 SR - Cost Drivers Learning Event February 2004 - Gaydon It is estimated that around 2,000,000 cars are scrapped in the UK every year, from which :- Size of the Problem in UK 1,400,000 million are true ELVs, 400,000 crashed/premature write-offs, and 300,000 are abandoned vehicles.

18 SR - Cost Drivers Learning Event February 2004 - Gaydon Some examples of technological challenges in the recovery of ELVs Fuel tanks, made out of high density polyethylene, are now a feature on more than 60% of new European cars and represent one of the biggest plastic components. One of the biggest challenges for recycling has been to find ways of removing fuel residues and other coatings that accumulate on the fuel tank during its lifetime and would otherwise taint the raw mate Heat resistant polyamide plastics, such as Nylon, used in the demanding environment found under the car bonnet account for between 15 and 20% of the plastics used in cars. However, because of tough quality standards, re-use and recycling of polyamides has been very limited. Cost Drivers : New Technology and Processes 1

19 SR - Cost Drivers Learning Event February 2004 - Gaydon Cost Drivers : New Technology and Processes 2 Some examples of technological challenges in the recovery of ELVs :- Two industrial techniques already exist for sorting plastics for recycling. Unfortunately, both have flaws. Laser Induced Breakdown Spectroscopy (LIBS) can sort plastics at high speed with 100% accuracy for some of the most common types of plastics such as polyvinyl chloride (PVC) and polyethylene terephthalate (PET). However, it is unable to identify other types of plastics with the same degree of accuracy. An alternative technology using infrared beams can distinguish between all plastics, but the process speed is painfully slow. Used tyres represent one of the biggest environmental problems attributable to the car industry, with most of the millions discarded every year finding their way into local dumps. One of the main obstacles is economic: although recycling tyres is technically possible, it is cheaper to start from scratch with the original raw material. One way of cutting the pollution problem is to extend the life of existing tyres by rethreading. A reliable cost effective solution for this process is yet to be developed.

20 SR - Cost Drivers Learning Event February 2004 - Gaydon Current ELVs Recycling Practices Source : Automotive Consortium on Recycling And Disposal (www.smmt.co.uk)

21 SR - Cost Drivers Learning Event February 2004 - Gaydon Current Recycling Operators/Actors  Dismantlers  Dismantlers - recover the valuable parts and remove items such as batteries, tyres, fluids, hazardous materials e.g., containing mercury (depollution).  Shredders  Shredders - separate materials by type into ferrous product, and non- ferrous product. Often bear the costs of ELVs waste for final disposal to landfill.  Media Separation Plants  Media Separation Plants - separates non-magnetic shredder fraction by type into separate non-ferrous metal product.  Material Recyclers  Material Recyclers - specialised for recycling Metal, Plastic, Tyres, Oil.

22 SR - Cost Drivers Learning Event February 2004 - Gaydon Source : Waste-Online (www.wasteonline.org.uk) Breakdown of Materials (by weight) within Modern Cars

23 SR - Cost Drivers Learning Event February 2004 - Gaydon  It is estimated that from the total weight of ELVs processed dismantlers and scrap yards :- Typically 70-75% of is metal. and and other 25-30 % are non-metallic waste (often referred to as shredder residues) which includes plastics, rubber, glass, textile, paint, oils and lubricants, paper and cardboard.  From Shredder Residues produced by dismantlers, scrap merchant and feeder yard :- 70% recovered by Shredders to steel, 10 % goes to heavy metal plants for further recovery processes, and 20 % sent to landfill as waste.  Heavy Metal Plants will recover the following from their in feed:- 7 % to steel, 20 % to aluminium, 13 % to magnesium, copper and zinc, and 60 % to landfill as waste.  450,000 tonnes of non-recyclable waste from ELVs is currently sent to landfills in the UK each year, which accounts for up to 10% of the UK’s annual total hazardous waste. Cost Drivers : Materials

24 SR - Cost Drivers Learning Event February 2004 - Gaydon  Mechanical recycling of flexible polyurethane seat foam from shredding residue for carpet underlay  Glass from shredder residue as road aggregate  Shredder residue to make paving slabs  Rubber used in road aggregate and playground.  Tyres are able to replace up to about 25% of the coal which would otherwise be used in cement kilns, This processes could provide a recovery option for up to half of the UK’s total waste tyre arising.  Tyres have a high calorific value, about 20% greater than that of coal, which on burning can be harnessed to produce energy. Reuse of Recovered Non-metallic Metallic Materials within ELVs

25 SR - Cost Drivers Learning Event February 2004 - Gaydon  Dismantlers Estimated at 5000 in total. 3000 of them are licensed. Each processed 250-1000 ELVs every year. 55 % turnover from universal parts/used cars.  Shredders (in UK) 37 Shredders Very expensive to set up Pay for sending the final waste to landfills.  Heavy Metal Plants (in UK) Currently there are 4 heavy metal plants 30-50% of their in feed is from ELVs. 200 tonnes/hour of which 70% steel, 5% al, 20% waste. Cost Drivers : Resources (in UK)

26 SR - Cost Drivers Learning Event February 2004 - Gaydon  Design Modular construction aids replacement, Wearing parts should be easily accessible, Standard parts are better than special designs.  Management Reverse logistics Planning of recovery processes Inventory of new, used and recovered products Uncertainty regarding the quality and quantity of ELVs  Labour Disassembly Depollution Recondition/Repairs, etc Cost Drivers : Skill

27 SR - Cost Drivers Learning Event February 2004 - Gaydon  Marketing implications Availability of market for recovered products, parts, or materials at a viable price. Positive marketing image as a result of environmentally conscious manufacturing Negative marketing implications related to product reliability issues.  Cost-benefit analysis Cost of non-compliance Hidden value of used products versus cost of recovery Capital investment requirements versus recovery revenue Cost Drivers : Market Conditions

28 SR - Cost Drivers Learning Event February 2004 - Gaydon Loss Profit Time A Predicted Pattern for Profit and Loss Account resulted by ELVs The preliminary compliance cost assessment estimated that the cost of meeting the ELV directive in the UK will be in the region of £360 to £520 million.

29 SR - Cost Drivers Learning Event February 2004 - Gaydon  ELVs directive aims to reduce negative impacts to environment caused by vehicles at the end of their useful life.  The significant number of problems with the development and introduction of ELVs Directive, highlights a need for a more effective consultation procedures and input from industrialists and experts to the definition of future environmental legislation and directives.  Solutions for ELVs compliance will have to be :- Sustainable to justify investment. Flexible to counter fluctuations in the global market. Competitive with the cost of virgin material.  ELVs compliance if managed properly could results in profit making opportunities. Concluding Remarks

30 SR - Cost Drivers Learning Event February 2004 - Gaydon ACORD (Automotive Consortium on Recycling And Disposal) E-mail: sfranklin@smmt.co.uk Web: www.smmt.co.uk British Plastics Federation E-mail: bpf@bpf.co.uk Web: www.bpf.co.uk British Metals Recycling Association E-mail: admin@britmetrec.org.uk Web: www.britmetrec.org.uk British Vehicle Salvage Federation E-mail: Email@bvsib.co.uk Web: www.bvsf.org.uk CARE (Consortium for Automotive Recycling) Web: www.caregroup.org.uk E-mail: Peter.stokes@vwg.co.uk Motor Vehicle Dismantlers Association of Great Britain E-mail: mvdaofgb@aol.com Web: www.mvda.co.uk Sources of Information SMMT (The Society of Motor Manufacturers and Traders Ltd) Tel: 020 7235 7000 Web: www.smmt.co.uk Oil Recycling Association Tel and Fax: 01256 840049 E-mail: ora8@excite.co.uk Used Tyre Working Group E-mail: paul.hallett@dti.gov.uk Website: http://www.tyredisposal.co.uk The European Tyre Recycling Association E-mail: etra@euronet.be Website: http://www.etra-www.com/ British Rubber Manufacturers’ Association E-mail: mail@brma.co.uk Website: http://www.brma.co.uk Department of Trade and Industry Recycling Policy Section: 020 7215 1860 Website: www.dti.gov.uk The Environment Agency (EA) Website: http://www.environment-agency.gov.uk


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