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ADA – The fight to combat illegal activity in vehicle recycling

Auto Recycling World finds out about the work the Italian Vehicle Recycling Association (ADA) is doing to combat illegal activity in the vehicle recycling sector.

 

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Before learning more about ADA, can you tell us about the size of the Italian vehicle recycling industry? How many recyclers are there, and what volume of vehicles are recycled?

In Italy, there are about 1450 car dismantling plants that process more than 1.2 Mt of ELVs, equal to one million vehicles scrapped in 2021. Last year, the number of ELVs decreased due to the decline in the involvement of the automotive market.

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Anselmo Calò President of ADA

Can you provide a short history of ADA and bring us up to date? How many members does it have, and what roles does it play for them?

ADA was founded in Milan in 1988 by a few local car dismantlers who realized the importance of confronting each other to give an identity to their work. Today, thanks to the efforts put in all these years, ADA is the point of reference for companies in the sector that operate in the national territory. It boasts 230 member companies.

The Association’s objectives include the qualification and professional growth of car dismantlers and are the reference point for the proper disposal of end-of-life cars for citizens, manufacturers and institutions. Moreover, it acts as a spokesperson for the interests of companies through active participation in specific commissions, tables and committees of interest to the car dismantlers and the entire sector supply chain, and through a direct and always open comparison with institutions and local and national bodies with which ADA enjoys credibility gained through seriousness and willingness to have dialogue and constructive confrontation.

The Association signs agreements and collaborates to ensure the recognition of an irreplaceable and qualified role to car dismantling companies that operate with fairness and professionalism.

You recently produced a paper regarding illegal operators; what triggered this, and can you highlight ADA’s proposals to combat this problem?

The current car dismantling scenario faces new challenges related to the spread of spare parts sales on online platforms.

However, we believe that in B2B and B2C relations, the spare parts market presents some difficulties due to increased illegal practices. Specifically, we are referring to the online sale of spare parts of illicit origin, which may derive from criminal activities (theft, counterfeiting, money laundering, often within the framework of real criminal associations) and from the lack of enforcement of rules on end-of-life vehicle management.

In our opinion, the current legislative framework on end-of-life vehicles and spare parts is unable to provide adequate and efficient guarantees in the face of new technologies.

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The Association, therefore, carried out an in-depth investigation into the current state of online sales of car spare parts, which highlighted the following concerns: the need for greater transparency, checks on the reliability of professionals using the services of online sales platforms and on the lawfulness of the origin of products.

E-commerce of spare parts should only be allowed on the condition that their origin is certified through a traceability system certifying their origin (both the type of vehicle and the treatment facility), which would thus prevent the placing on the market of spare parts of stealth origin; offered for sale by private citizens or originating from the treatment of a vehicle in an unauthorized facility.

The Association would consider it useful to amend certain provisions of the proposal for a regulation on digital services (DSA) – a horizontal initiative aimed at creating a European digital single market and focusing on issues such as the liability of online intermediaries for third-party content, the security of online users or asymmetric obligations of due diligence for different providers of information society services, depending on the nature of the risks these services pose to society.

Given the horizontal nature of the DSA, it is possible to integrate the regulatory discipline of online platforms contained therein with the sectoral discipline (European and national) that lays down obligations for the ELVs and spare parts supply chain.

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The discipline of the DSA can be usefully applied, with some appropriate modifications, to the illicit activities of digital systems implemented through online business models in the automotive spare parts sector to:

  • combat illicit practices;
  • strengthen information on the origin of spare parts;
  • provide for direct coordination mechanisms between platforms and the needs of ADA members.

How much assistance do you receive from government agencies to help combat illegal operators?

The topic is not on the agenda of the national agencies. In particular, the Ministries of Interior, Industry and Environment do not care about this issue.

In ADA’s position on the revision of the European ELV Directive, one point, amongst many that arise from it, is that with regards to EPR, ADA is against it; why do you think an EPR scheme is unnecessary?

The Association is not opposed to an Extended Producer Responsibility system in the sector; on the contrary, we believe that an EPR system that is producer-dependent and implemented, not so much in economic terms but through efficient communication with ATFs, ensures the proper dismantling of end-of-life vehicles. Concerning the possible establishment of a deposit or incentive system for the delivery of vehicles to ATFs, we believe that it cannot be classified as an EPR system since it would not be in charge of producers but by the State or the supply chain. Therefore, we are against any deposit and incentive system for the delivery of vehicles to ATFs.

Also, the paper states that ‘ADA is totally opposed to the possibility to fix a binding target for the re-use. To encourage and increase reuse, it is necessary to activate instruments, including economic ones, that incentivize the reuse of spare parts, including reduced VAT. It also suggests that the directive ‘should clearly state that re-usable components coming from ELVs are not waste and, for this reason, they are not subject to the restrictions of the waste legislation’.

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Why have you suggested these proposals, and is it believed that regulations like the directive restrict vehicle dismantlers and incentives such as those you have suggested help make the industry grow organically and provide even more solutions to the circular economy and the lifecycle of a vehicle?

The association is not opposed to the ELV Directive; on the contrary, it regards the implementation of the current ELV Directive as positive, as it has enabled the sector to be regulated at European and national levels over the years. However, it considers that an update is necessary, considering that the current directive is more than 20 years old.

With regard to the inclusion of reuse targets, the association believes that reuse should be encouraged, not by setting new targets but by instruments, including economic ones, such as reduced VAT, obligations for repairers to offer spare parts on more favorable terms, stricter rules for electronic trade of spare parts on the various platforms, and incentives for manufacturers to take back, at the wholesale market price, certain components and distribute them to their networks as guaranteed spare parts, considering the impossibility of using them in new vehicles.

Another important instrument to support the reuse is the communication, from producers to ATFs, of codes for the use of electronic parts assembled in vehicles.

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ADA Premium event 2022 – Conference on 25th June 2022

These measures would lead to an increase in reuse resulting in less waste, a reduction of vehicle repair costs and CO2 emissions by ensuring a better application of the principles of the circular economy, which sees reuse as the second most important factor after waste prevention.

The specification that spare parts from ELV treatment are not waste stems from a particular and erroneous conviction of the Italian Customs Agency, which disputes the fact that in Italian law (but also in the EU directive), this distinction between used spare parts and waste is not clear.

To learn more about ADA, visit associazioneada.it

Please visit adaevent.it to find out about ADA Premium event 2022 – Conference on 25th June 2022

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