Auto Recycling World spoke to George Christofilopoulos, General Manager, K.Mavromatis ABEE, about the situation of the auto recycling industry in Greece, including the challenges they face and how he finds the lack of awareness of the auto recycler’s role a major problem.
When referring to the pandemic, George said that during 2020, his company was almost 50% down in sales. He put this down to the many lockdown periods imposed. And although his company has an online store, most sales take place over the counter as people are not used to buying car parts online in Greece; and with a stock of around 17,000 to 18,000 parts, that’s a lot of missed sales.
He said that most of his customers prefer to see them firsthand when buying spare car parts, but this is not to say that Greece’s people are opposed to purchasing other products online such as clothing and electronics. It seems, in Greece, consumers are quite traditional when it comes to buying car parts. According to George, there are very few recyclers offering a service of online parts sales.
When asked about whether companies would use eBay, he said that transportation is costly. All courier services have a fixed price, and with items over a kilo, postage would end up costing over 30 Euros for most parts. Parts sent to Greece are cheaper, but it costs three times as much to send out of Greece. But for George, he is perplexed why this is the case, and after making enquiries, he still has no answer. So for now, their market is in Greece.
Awareness of the auto recycling industry
According to George, there is little awareness by the general public in Greece of what they must do when their car reaches its end of life. The authorities do not actively inform the public on vehicle recycling practices. However, such an obligation exists in active legislature (Presidential Decree 116 article 15). The only aspect of recycling that the general public hears of is how to recycle an old TV, computer or electrical appliances, through TV and printed advertisements. The public usually delivers cars to whoever pays them the most. They are unaware that a Certificate of Destruction (CoD) exists, why they need it, and by whom it can be legally issued. In some cases, the Authorised Recycling Facilities (ATFs) bear the task to inform the public but cannot compete with the unauthorised operators that offer better prices.
Illegal operators
George says that the problem comes back to illegal operations – when someone has a car to recycle, they tend to use a service they have found by searching on the internet. Anyone can advertise freely, legitimate or not. But more often than not, the car to be recycled will go to the company offering the best deal. The customer does not care how much a legal operator has to pay in licenses and permits etc., to operate legitimately; the customer just wants the best deal. Customers wrongly assume that all market participants operate legally. They falsely believe that if dismantlers operate illegally, they would have been closed down by the authorities in the first place; but this is not the case. Hence everybody is legal in their eyes, worsening the situation even more! As a result, the illegal operators dominate the second-hand market for spare parts, and the auto recycling business has turned unprofitable and unsustainable for legal ATFs. Under current market conditions, it is not profitable to recycle the majority of cars over 20 years old, which are usually delivered to ATFs, newer vehicles 10-15 years mostly end up to illegal operators.
In his opinion, the public must be informed of how to recycle end of life cars – to make them aware that they should be responsible for disposing of their vehicles correctly and legally avoiding illegal dismantlers. Incentives should also be used to make it attractive to deliver ELVs to authorised treatment facilities, and third party illegal dismantlers should be convinced to become legal and not the other way around (ATFs becoming illegal), as is the current practice. Inspections by authorities should be more common and severe.
80% of the volume of cars are in Athens and Thessaloniki, the two big cities in Greece, and George believes that only half of all vehicles are recycled legally, the rest illegally. Still, when he says illegally, there are many ways to measure this. He gave an example, ‘if someone takes a car to an illegal dismantler, this illegal dismantler may take it later to a legal ATF. The legal ATF issues the certificate of destruction (CoD) for the owner. The car is then moved back to the illegal dismantler who dismantles this car if he did not earlier dismantle it in the first place. So this particular car has been registered as officially recycled by the legal system. But in reality, the legal system only printed the CoD and received a fee from the illegal dismantler and the car is dismantled off the premises. The legal dismantler chooses to do this because he receives money for doing very little. It seems to be legal because illegal operators hide behind a pretence of operating a spare parts business although they are prohibited from performing recycling and dismantling activities.’
He said, unfortunately, the inspections concerning illegal operators are limited in numbers and insufficient to deal with the problem at hand; it is not being actively monitored. Contacting the authorities usually bares minimal results as they do not have the manpower or knowledge to intervene. Making formal complaints regarding illegal operators is not straightforward and bureaucratic. But this is not to say that all illegal operators should be closed down, they need to be made aware of their activities and have the opportunity to become legal and learn how to improve their dismantling practices. The rules for all market participants should be the same for all and not against legal ATFs as it is happening now.
George told us that the authorities seem to have a very good understanding of how this market operates, but it is not a priority for them to act upon. The market has adopted accordingly and deems it unnecessary obtaining a full ATF license paying the extra costs. They prefer to operate illegally because it costs them less, and they are left to operate unhindered.
In Greece, George said they are significantly behind with what is happening with the auto recycling industry compared with the rest of the world. Most auto recyclers evolved from scrap dealers; before 2004, these recyclers were recycling metal parts, not cars. Currently, a minority of them actively indulge in organised dismantling and trading activities of spare parts. Since 2004, an official recycling system was established, and some of these recyclers made investment to become legal facilities. There are currently 150 ATFs who are official members, including George’s company.
Incentives and selling parts
George conveyed that between 2004 and 2012, the government gave the public many incentives to trade in their old cars and buy new ones cheaper. Many vehicles were coming into ATFs for free, and money was received from the government. The industry was booming because scrap prices were very high, reaching €300 per tonne of weight, and because of this, and the incentive schemes, vehicles were being scrapped whole after the depollution process. A lot of money was being made. Therefore there was no need to sell parts.
And from 2010, George told us, these incentives to recycle cars grew smaller and slowly scrap prices fell considerably in Greece. Last year the price dropped to €65 per tonne, but right now it is just over €100 per tonne fluctuating intensively throughout the year. Because dismantlers were not making much money, they began taking parts out of cars to sell them, but they soon realised that this was not easy. Only about 15% of companies dismantle and catalogue vehicles entirely. A minority of them sells parts on-demand and keeps the vehicle in storage. The majority of them scrap the vehicles altogether. But because George’s company is based in Athens, space is limited. Hence his company dismantles a vehicle entirely and sells the parts. But the majority of dismantlers don’t have the expertise in selling parts so they sell the car whole to those who will then dismantle and sell the parts natively or in some cases, export to developing countries. Custom authorities find it difficult to decide if used cars or end of life vehicles are exported and apply correct inspection procedures. Selling parts for ATFs is a losing battle against illegal operators because of their cost disadvantage, but it is the only way for them to survive financially.
A large part of second-hand parts trading is performed online via unregulated sites. All members can sell parts regardless of their origin. He states that selling online in numbers should be made available only to legal enterprises that can verify the origin of the parts they sell and their ability to dismantle legally.
Regarding green parts in Greece, he said that if a vehicle needs to be fixed, the repair shops do not consider using green parts first, they prefer to use new, cheaper parts from China than buy a green part from a dismantler in Greece. They rely on second-hand parts usually for those that cannot be acquired or do not exist new (engines, gearboxes etc.). Insurance companies do not actively require green parts to fix their customers’ vehicles and are indifferent to their origin. Concerns for circular economy matters are absent from market participants. Recycling is not a priority.
All these problems and inefficiencies detected in Greece are not unique. They are common in many European countries. It is reassuring to know that the current revision process for the ELV Directive initiated by the EU considers all these problems. He estimates the number of ELVs with unknown whereabouts in Greece to be over 40%, suggesting that stricter and more frequent inspections should be carried out by the authorities accompanied by heavier penalties. He believes that the revised Directive should hold the producers and local authorities accountable to inform the public in effective and measurable ways of ELV recycling matters. George is confident that the new ELV Directive will make governments intervene more effectively, alleviating many of the obstacles ATFs deal with nowadays by promoting legitimate and acceptable recycling practices.
The general public needs to be made aware of how to recycle their car legally, they need to be informed about their obligations as vehicle owners, on how to contact ATFs to obtain their certificate of destruction legally, and finally on how to help achieve good recycling practices such as buying legally derived green parts.
If you would like to contact George, please email him at geochrist@gmail.com or visit his www.usedparts.gr & www.autorecycling.gr sites.
