Download OARA’s submission to the Ministry of Environment here.
Ministry of the Environment
Environmental Programs Division
Modernization of Approvals Branch
135 St. Clair Avenue West Floor 4
Toronto, Ontario M4V 1P5
Phone: (416) 325-7421
April 4, 2014
Re: EBR Registry Number: 012-0678 Technical Discussion Paper (“Discussion Paper”) on Proposed Recycling Standards for End-of-Life Vehicles (“ELV Recycling Standards”)
Dear Mr. Goode:
The Ontario Automotive Recyclers Association (OARA) has been the voice of the automotive recycling industry in Ontario since 1992. Since its inception, OARA has worked with members to improve practices within the industry and to collectively promote the benefits of responsible auto recycling. OARA represents approximately 140 auto recyclers that process and recycle approximately 190,000 end-of-life vehicles (ELVs) annually.
OARA members adhere to the Canadian Auto Recyclers’ Environmental Code (CAREC) a voluntary national standard for recycling ELVs responsibly. CAREC evolved from the earlier National Code of Practice for Automotive Recyclers developed with Environment Canada in 2008 for recyclers participating in the National Vehicle Recycling Program: Retire Your Ride. OARA has been an active participant in developing, promoting and administering these improved standards for recycling ELVs.
ELV Recycling in Ontario today
Unfortunately not all vehicles in Ontario are recycled in accordance with the CAREC standard. In Ontario it is estimated that over 600,000 vehicles come off the road each year. While 94% of these are recovered for recycling and 83% of a typical vehicle can be recycled by weight, over two thirds are not processed in any systematic way.
Like any other business, ELV recyclers strive for profitability seeking both greater number of vehicles to recycle and opportunities to reduce recycling costs. Unfortunately under current regulatory conditions, some ELV recyclers can reduce costs by externalizing them to the environment – it is less costly for ELV recyclers to dump hazardous wastes, such as oils and antifreeze, or release substances of concern, such as ozone depleting substances (ODS) or the contents of mercury switches to the environment than collect them and ensure they are processed properly.
There is an economic opportunity cost to this lack of regulation as well. Lowest common denominator recycling results in many vehicles that could yield reusable parts being scrapped with minimal dismantling. The result is that both ELV recyclers that maximize economic value through the recovery, refurbishment and reuse of parts, as well as consumers who benefit from access to those parts, lose out as ELVs are lost to “scrappers” that undertake little or no environmental management whatsoever.
Recycling Standards for ELVs
OARA is supportive of Ministry’s proposed framework for regulating ELV Recycling Standards (i.e. the Environmental Activity and Sector Registry – EASR) and proposed amendments to Regulation 347 (General – Waste Management) under the Environmental Protection Act (EPA) which will eliminate the current derelict motor vehicle site exemption and require sites that accept and/or store a limited number of end-of-life vehicles for recycling to operate to a common ELV Recycling Standard.
OARA supports the Eligibility Requirements such that if an ELV processing facility meets the eligibility criteria for air and waste, it will not need any further waste or air approvals. OARA also supports the majority of the specific Operating Requirements related to recycling of ELVs prior to crushing and/or shredding.
We provide more detailed comments regarding key elements of the ELV Recycling Standard later in this submission.
OARA believes that if implemented and properly overseen, the Ministry’s proposed ELV Recycling Standards will professionalize auto recycling, create jobs in the sector, maximize parts reuse and recycling, reduce wrecker fires, reduce fraudulent “recycling” of stolen Vehicle Identification Numbers (VINs) and also bolster the competitive footing of the Ontario auto manufacturing sector by ensuring a market-driven approach to ELV recycling that maximizes environmental outcomes with no new costs to consumers.
With regard to costs to consumers it should be noted that by introducing reasonable ELV Recycling Standards, the economics of ELV recycling standards will be significantly improved – those recyclers meeting the standards stand to gain higher volumes of ELVs for processing improving economies of scale and increasing value-added parts reuse. As a result, where an ELV has net positive value as a reusable and recyclable commodity today that value will only increase under a regulated ELV Recycling Standard which will further improve the economics of ELV recycling thereby precluding any need for “eco-fees” or other charges to automobile consumers.
The following sections address OARA’s specific comments regarding the ELV Recycling Standards proposal.
Specific comments regarding the ELV Recycling Standards
Having reviewed the Discussion Paper OARA has specific comments about a number of elements of the ELV Recycling Standard proposal. These include:
1. Derelict Motor Vehicle Site Exemption
2. Proposed End-of-Life Vehicle Depollution Standards and Depollution Notice
3. Proposed Eligibility Requirements
4. Proposed Operating Requirements
Derelict Motor Vehicle Site Exemption
OARA believes that the proposed exemption balances the need for covering the widest range of ELV recycling sites with the need to not unduly burden sites that have a small number of ELVs for reasons other than engaging in ELV recycling (i.e. hobbyists). Over time it will be critical to ensure that operators are not circumventing EASR registration by taking on the guise of hobbyists while actually processing more vehicles than the exemption allows for.
Proposed End-of-Life Vehicle Depollution Standards and Depollution Notices
Given its consistency with CAREC, OARA supports the proposed initial list of materials and components to be removed and properly managed prior to an end-of-life vehicle being flattened, crushed, shredded or otherwise processed for metals recycling.
Depollution notice and documentation of Vehicle Identification Numbers (VIN)
Of critical importance is that once depolluted, each vehicle hulk is certified as such via a depollution notice that is tied to both a given EASR registrant’s registry number and the Vehicle Identification Number (VIN). Issuance of depollution notices by EASR registrants is an important element of the proposal for the following reasons:
• By ensuring that only EASR registrants can issue depollution notices it makes it more difficult for unregistered (illegal) operators to pass off wet, unprocessed vehicles to crushers and shredders as depolluted;
• Record keeping facilitates the tracking of ELVs and associated reusable and recyclable materials through various transactions and facilitates environmental reporting as well as aiding law enforcement by thwarting the illicit “recycling” of VINs from wrecked vehicles to stolen vehicles; and
• Facilitates auditing of ELV recyclers.
The requirement for issuance of depollution notices does not create a new regulatory burden as recording and reporting of vehicle information, as part of vehicle “wrecking” is an existing requirement of the Highway Traffic Act R.S.O. 1990 .
The inclusion of a simple list of VINs associated with each shipment of hulks from ELV recyclers to shredders provides shredders with a record that ties the EASR registrant to each hulk in the shipment. This makes it difficult for unregistered operators to pass off wet, unprocessed ELVs to crushers and shredders as depolluted – either the shredder receives an ELV from an EASR registrant certified as depolluted or, it must itself depollute and certify the ELV as such itself.
Where a shredder must depollute and certify ELV received from unregistered 3rd party operators, the value of ELVs that have been partially stripped of valuable materials but not depolluted is reduced. This serves to reduce the incentive for unregistered operators to strip ELVs of valuable materials and then attempt to sell the wet, unprocessed hulks to shredders.
Proposed Eligibility Requirements and Eligibility Criteria
We feel that, as framed by the Ministry, the proposed Eligibility Requirement and attendant Eligibility Criteria for Waste Management focus on the ELV recycling sector without unnecessarily drawing in businesses that are not in the business of recycling ELVs under the regulation. This is important to ensure that the trade in vehicles that are not yet ELVs is not hampered thereby affecting the competitive dynamic in the business of auctions and sales of salvage or used vehicles.
With regard to specific Eligibility Criteria OARA makes the following comment:
ER-6 Crushing Equipment
The operating time period of no more than 7 days in a 3 month period will be restrictive for many registrants because of the seasonal nature of the business and the requirement to move vehicles through a facility for economic and storage reasons. A maximum based on an annual timeframe and consistent with other mobile equipment approvals would be appropriate and we would suggest 60 days in a one year time period.
Proposed Operating Requirements
The operating requirements proposed by the Ministry are generally consistent with existing best practices amongst Ontario automotive recyclers that adhere to CAREC. With regard to the following operating requirements we have additional comments:
OR-1 Covered Structures for housing ELV Recycling
OARA supports the requirement for covered structures to house ELV depollution activities. It is difficult, if not impossible to properly manage fluids and the removal of other materials and components in a systematic way if the operations and the operators involved in removing them are exposed to the elements.
There are regional issues with some recyclers being prevented from building suitable depollution facilities because of municipal requirements or restrictions. We anticipate that MOE field staff will work cooperatively with industry to implement this requirement in a judicious manner.
OR-3 Storage of Flattened or Crushed ELV
OR-3 poses undue costs to many ELV recyclers.
The requirement to depollute vehicles, do it indoors, on impermeable surfaces, and crush with equipment containment on an impermeable surface – are all proactive steps that will recover and contain the vast majority of any potential pollutants in an ELV. Storing those crushed vehicles on impermeable surfaces will provide the smallest environmental benefit at the largest cost of any new requirement in the proposal.
ELV recyclers can store a significant number of depolluted hulks until such time that they have sufficient volume to warrant shipping them to shredders for processing. Additionally, given the variability in scrap steel commodity prices ELV recyclers may sit on crushed inventory in periods when market prices are depressed.
To require all flattened or crushed ELVs to be stored on an impermeable surface is essentially to require the concrete paving of what are in some cases very large areas. This poses an extraordinary cost that does not confer proportional benefits to the environment given that the hulks to be stored are to be thoroughly depolluted first.
Finally, some existing ELV processing facilities that have received stormwater/waste sewage approvals from MOE, have not been subject to this requirement. As such it is too onerous a requirement to be assumed as a standard site requirement for EASR registration.
OR-19-24 Personnel Training and Other Documentation Requirements
OARA appreciates that the training and documentation requirements may be new to many ELV recyclers. However, any modern business that is engaged in environmentally sensitive activities has a responsibility to ensure staff can comply with the requirements of the law and can verify that the practices codified in laws and guidelines are being adhered to.
The proposed requirements under the ELV recycling Standards mirror existing requirements under CAREC and as such are adhered to by many ELV recyclers in Ontario today.
Oversight and enforcement of the ELV Recycling Standards
OARA recognizes that one of the key elements of successful implementation of any new standard is effective oversight and enforcement. Without uniform application and effective oversight across markets, standards can do more economic harm than good. The cost differential between those businesses that comply with the standard and those that do not can actually widen if enforcement of the standard is not effective.
To improve the effectiveness of regulation and reduce the Ministry’s cost of ensuring compliance, OARA will be working with both the Canadian Vehicle Manufacturers Association (CVMA) and the Global Automakers of Canada (GAC) to establish an End-of-Life Vehicle Industry Standards Council (ELVISC). At its inception OARA envisions that ELVISC will:
• Provide training and guidance to ELV recyclers regarding adherence to the EASR requirements;
• Offer ELV recyclers with compliance audits and certification of compliance to the EASR requirements;
• Provide clearinghouse services for exchange of technical information between vehicle manufacturers and ELV recyclers related to vehicle dismantling and recycling;
• Undertake an outreach program to ensure ELV recyclers across Ontario are aware of their obligations to register and comply with EASR requirements under Ontario law; and
• Undertake outreach and education to ensure the public and businesses handling significant ELVs (ie dealers, auctions, insurers) are aware of the new requirements.
OARA expects that ELVISC will significantly reduce the cost of administering regulation through proactive outreach and provision of resources to aid ELV recyclers in achieving compliance.
The ultimate objective of establishing ELVISC will be to reduce the Ministry’s role in the ELV recycling sector to law enforcement as a measure of last resort.
If you have any questions please do not hesitate to give me a call.
Ontario Automotive Recyclers Association (OARA)