Rafael Gomez Haro Second Vice President of the Andalusian Association of Dismantlers (AAD) and owner of Provaluta España Reciclaje de Metales, SL, a vehicle recycling centre based in Córdoba-Andalucia, Spain, gives his point of view on the issues he faces in his country as an auto recycler and how the new directive needs to provide guarantees for legal ATFs.
Auto recycling operation loopholes
The Spanish auto recycling industry is very professional. Registered Authorised Treatment Facilities (ATFs) have excellent systems in place, offering depollution and parts sales from their sites and through online platforms but, according to Rafael, there is a downside, and this relates to unofficial ‘dubious legal’ operations. It seems there is a loophole in the system when it comes to vehicle dismantling.
When a vehicle is in temporary deregistration, it gives people who are not registered ATFs, an opportunity to dismantle this vehicle in their own home or small facility and place parts online to sell and there is nothing in the law to suggest this is illegal. If vehicles are being dismantled in large volume, the authorities will get involved, but on a small scale, they are left to their own devices.
In Spain, temporary deregistration represents about 50% of the total deregistrations, this is bad news for the sector and will soon be higher than the definitive deregistrations of ATFs.
The law in Spain recognises as one of the great novelties in Royal Decree 20/2017, which determines that the extraction, reuse and sale of used spare parts can only be carried out by Authorised Treatment Centres (ATF), as long as the vehicles to which they belong have previously undergone definitive deregistration in the General Vehicle Registry of the DGT and have been decontaminated.
Rafael told us that setting up a registered ATF in Spain is a similar process to many other countries around the world. The correct paperwork is required, and it can take anywhere from one up to three years to become a legal auto recycling company. But for people who dismantle on a smaller scale and who do not go through this process, it seems, according to Rafael, they are not penalised and even if they are, penalties are small. If their small facility is closed down by the authorities, they will continue to dismantle elsewhere.
He said for legal operators, it costs a lot of money, but for these unofficial operators, costs are low, and even if they are caught, penalties are also low. Now around 75-80% of vehicles which come into yards in Spain are between 15-20 years old and not profitable because of the amount the operator has to pay to be legal.
In Rafael’s opinion, the government does little to fix this loophole because it seems that it is too much trouble for them to deal with. He said that it is easier for the government to inspect a legal operator than investigate an ‘unofficial’ operator.
Insurance and salvage vehicle classification
According to Rafael, in the past, ATFs made a contract with an insurance company and paid around 10 or 12% of the market value of damaged vehicles, but for the past ten years, ATFs pay from 25% to 100% of the market value of damaged vehicles. Most vehicles are bought through auction, but there is no control of where the vehicles end up as the buyer’s documentation is not checked.
He said there is a categorisation system in place in Spain, but it seems that it is not being utilised. Even on online platforms where parts are sold, documentation must be shown to prove the legality of the ATF selling the parts, but Rafael says that no one checks this. And since the pandemic, businesses have had to close which has provided an opportunity for people to dismantle cars at their home to make some cash without paying tax or other business costs.
What is the solution?
According to Rafael, the government needs to become much stricter; Government and manufacturers need to have responsibility for the entire life cycle of a vehicle. He said there needs to be an Extended Producer Responsibility (EPR) system in place so that when a vehicle reaches its end of life, the owner of the vehicle takes it directly to the registered ATF where they either receive money for the vehicle or discount on the purchase of a new vehicle similar to that of a scrappage scheme.
AAD has proposed to the government a series of measures to control vehicle auctions, control of damaged vehicles. Are they repairable? Destination control repair shop or only ATF, create software for EU member countries to control the export and import of vehicles, control of the Temporary Deregistration, and we have had meetings with the advertising platforms to expose the current situation and that take steps to enlist only legal advertisers.
What if you sell your vehicle second-hand? What is the process?
Rafael said since July, sales of second-hand vehicles (up to 20 years old) in Spain has risen by 31%. Those buying older vehicles are young drivers who do not want to go on public transport because of COVID-19, so they look for older, less expensive cars, but this creates problems; the automobile fleet is ageing which means more cars enter workshops to be fixed and more accidents occur. You may think this is good for the auto recycler as they will be able to supply more parts – true – but this is also good for the illegal operator.
When it comes to buying these parts, particularly online, unfortunately, the consumer is unaware whether they are buying from a legal or illegal operator. Rafael said the government needs to make a campaign to show the public through these online sites what they need to be aware of when making a purchase and give reasons why they should only buy from legal operations.
For Rafael, he is selective on the type of vehicle he buys to depollute as he is only looking for the parts he can sell that are in high demand.
EVs and HEVs
Rafael talked of the concerns he has with EVs and HEVs. He said in Spain, there is little information or knowledge about how to dismantle these kinds of vehicles and little possibility of finding out from manufacturers about this. He said if he was to take on an EV or HEV and there was an accident, this will be the employer’s problem and not the manufacturer’s. Rafael said:
“We have to guarantee the safety and health of our employees. In Spain, there are no EV and HEV handling courses approved by the Ministry of Industry, and this concerns us, we cannot guarantee the correct treatment of these vehicles or the health of our employees.”
Therefore, he suggests clear legislation in the Directive with no room for interpretation so that all ATFs in all European countries work in the same way so that they can accept these vehicles as more and more reach their end of life – One Directive and one EPR system throughout Europe.