K K ELV Directive BRAKENET 21/03/02

K K KGP Research Projects KGP is an automotive industry specialist consultancy Large proportion of its work is in technology based market segments: Close involvement in international OE and AM braking business

K K KGP Research Projects cont. Typical recent projects:  OE technology and market acceptance assessment of new disc technology - global  Materials type and usage study - Europe  AM customer satisfaction benchmarking - Europe  AM distribution strategy - Europe  AM marketing distribution strategy - N America

K K KGP experience in ELV SMMT Compliance Company SMMT Government Policy Sewells Conference Supply Chain Issues in the ELV Industry

K K Overview of Directive Objectives: To increase rate of reuse & recovery to 85% by 2006 and 95% by 2015 To increase rate of reuse and recycling to 80% by 2006 and 85% by 2015

K K Overview of Directive cont. Main Requirements: To design & produce vehicles that facilitate recycling To restrict use of heavy metals in vehicles from 2003 Producers to meet all or part of costs of implementing free take back system To increase use of recycled materials in vehicle manufacture

K K Key Issues For VM’s: Financing take-back system Problem of “orphan brands” Design for recycling Historic car parc

K K Key Issues cont. For Suppliers: Increasing use of recycled materials in component manufacture Developing applications for non-metallic materials Material coding – EU wide standards? R&D costs Parts marking

K K Key Issues cont. For dismantlers: Removal and segregation of non- metallic materials Receiving ATF status For shredders: Minimising shredder residue

K K Proposed UK Policy DTI Consultation Paper gave three options: 1) Brand-specific contractual scheme 2) Tonnage target scheme 3) Hybrid scheme

K K Proposed UK Policy cont. Industry Alternative: SMMT’s “Option 4” Majority of support, but not unanimous Trade & Industry Select Committee suggests more dialogue is needed

K K Implementation 2002 for new vehicles 2007 for all cars in parc DTI has suggested bringing 2007 deadline forward

K K Actions to reach conformity VM’s: Preparation of dismantling information Ensuring take back system is in place Information for suppliers

K K Actions to reach conformity cont. Operators/Workshops: Collection systems for old parts

K K Actions to reach conformity cont. Suppliers: Identification of materials – IMDS? Assessing materials applications that need changing Restriction of hazardous material usage Increase in recyclate use

K K Actions to reach conformity cont. Dismantlers: Improve depollution techniques Investments in equipment etc. Meeting requirements to become ATFs Shredders: Improve technologies for material extraction from shredder residue

K K Supplier Concerns Issues raised during previous KGP research: Cost implications Dialogue with customers (VM and Tier 1)

K K ELV and Braking Systems Key Issues: Avoiding heavy metals e.g. lead, chromium etc Ease of fluid removal from brakes and shock absorbers Design for recycling

K K Future technologies Brake-by-wire Systems: Electro-mechanical Electro-hydraulic

K K Conclusions Case for improved communication/dialogue in OE supply chain Identification of development costs for design for recycling Pressure for material re-use