Kai Lindell, Executive Director of the Finnish Car Demolition Association in Finland, talked to Auto Recycling World about what is happening now in the auto recycling industry and what is in the pipeline.
Vehicle recycling figures and how it works in Finland
First, looking at the auto recycling process, Kai explained that the number of vehicles processed at the end of life in Finland is around 70,000 to 80,000 per year, and less than 20,000 of these are dismantled for spare parts. In his opinion, this number should be double to around 40,000. He said the reason why dismantlers are not processing more ELVs is due to the Finnish set-up. He said that unlike many other countries in Europe, there is practically no car industry in Finland, no actual manufacturing; there is only one assembly factory. He said that the problem comes down to producer responsibility system; the car importers control and own the producer organisation – ‘Finnish Car Recycling Ltd’.
Finnish Car Recycling Ltd has a contract with four shredder companies that have activities in many Nordic countries. These shredder companies are not interested in reuse, only the scrap metals. They authorise certificates of destruction (CoDs), but this is not to say that dismantling companies cannot offer CoDs; they just need the authorisation from the Finnish Car Recycling Ltd company so that people can bring their vehicles direct to them and not to the shredder companies. These four Shredder companies are known as the operators in the contract system for Producer Responsibility. They and other collection facilities (which are non-dismantlers) are receiving most of the ELVs i.e 70-80%, which is why dismantlers are left with a low volume of vehicles to dismantle.
Kai said to increase volumes and due to vehicle sales being down by 20% from the previous year, the auto industry lobbied the Government to create incentives for people to purchase new, more environmentally-friendly vehicles. This began from 1st December 2020 and is set to continue until the end of 2021. For those buying EVs, HEVs or cars with low emissions, they will receive an incentive of €1000 to €2000, plus a further €500 from the car dealer to replace their old car.
An advertising campaign of the Finnish Car Demolition Association took place in December 2020 through social media so that people would take their old vehicles directly to legal vehicle dismantlers. When speaking to Kai, he said he was optimistic about this campaign because when there was a similar campaign in 2018, approximately 8000 vehicles were dismantled. And from a reuse point of view, Kai said that this campaign had brought better vehicles to the yards. He said in the past and in previous scrappage schemes, the average age of a vehicle being brought in was over 20 years, the average age of a vehicles on road in Finland is 12.4 years, and thanks to the campaign younger vehicles are being brought in which provide better quality parts. He said that the reason for such elderly cars on the road comes down to high Finnish taxation.
Illegal operators – is there a problem in Finland?
Kai told us that they do not have exact figures, but in Finland, because there is a population of only 5.5 million, he said people are wary, and people tend to follow the rules (maybe this is why COVID-19 has not been as bad there). He said if there were a large scale illegal operation going on, someone would point it out.
He believes that around 5,000 to 10,000 vehicles are being dismantled illegally, which is a considerably low figure compared to many other countries. This has a lot to do with the number of people in Finland being so few. He said that ‘if someone has a hundred, half dismantled vehicles in their yard, their neighbour will call the authorities if they know it not to be legitimate, and the authorities would then take action.’
How easy is it for the general public to know if they are dealing with a legal or illegal operator?
Kai told us that there are about 120-130 legal dismantlers (many of which are only authorised to dismantle 50 vehicles or so a year. Out of these, 60 larger companies are members of the auto recycling association in Finland, and of these 60, 34 even larger companies also belong to a separate special used parts association. This sub-association runs an online trading platform in Finland www.varaosahaku.fi (similar to eBay), and here, they sell about 200,000 spare parts a year (2019 T/o 2,5 mio), which equates to over 10% of the Finnish spare parts business. It is well known in Finland. The sales and rapidly growing and were in February 2021 80% higher than 2020. Expected sales of 5,0+ mio euros this year.
There is also an independent, smaller platform, which is much cheaper, with a turnover of €200,000, about 15 of their members belong to this system. So the legal spare parts sales business is strong and well known by the general public in Finland.
Is there a market for reuse parts in Finland?
With the average age of a car on the road in Finland being 12.4 years and with a market value of around €3500, the people who own these cars can only afford to buy reused parts if their vehicle requires repairs.
Out of the 5.5 million people in Finland, only 1.3 million live in the larger cities where, Kai told us, public transport is excellent, but once you leave these cities, even if it is just 50 or 60 kilometres out, public transport becomes mostly non-existent. There are long journeys to make, even more so for those living remotely – sometimes it could be e.g. 300 kilometres to the closest train. People need their own vehicle, and if it needs a replacement part, the only affordable option is a reused part. Kai told us that the average person in Finland does not have a lot of expendable income, the cost of living is high, e.g. new cars cost 70-100% more than in the UK, due to the taxation, so keeping older cars going with reuse parts is the most viable option.
What next for auto recycling in Finland?
At the beginning of June 2019, in conjunction with the new left-centre government program, the Finnish auto recyclers association began to prompt and lobby a new policy initiative that says the local car registration government body has to establish an online platform. It has to scrutinise how to establish and pay the cost of an online platform where every owner who wants their car to be dismantled must have it listed there before the dismantling process takes place. Kai said that their members should have the initial opportunity to ensure these vehicles are dismantled as part of the circular economy process before going to the shredder. But this policy is not yet in place. He said the next meeting to discuss it is due to take place this month, and they hope to find out if there are any further obstacles, and what the timeframe is for making it become a reality. He said he would try to push it through, but he fears that the government will change again, as it is only two years away from the next election, and he doesn’t know if they will have to begin the whole process over again.