The Danish Auto Recycling Association (DAG) leads the charge for sustainable auto recycling in Denmark, representing 50 diverse companies across the industry. As the country’s only association of its kind, DAG collaborates closely with government bodies, insurers, and industry stakeholders to shape impactful regulations, advocate for second-hand parts, and ensure environmental compliance. Adam Pade, Head of Secretariat, highlights how DAG’s initiatives are essential for advancing sustainable practices within Denmark’s circular economy.
A Look at DAG’s History, Influence, and Industry Impact
DAG, Dansk Autogenbrug, was founded in 1963. The aim was to improve the general image of the trade, its statutes requiring decent sites and compliance with applying legislation.
Currently, DAG represents 50 member companies ranging from one self-employed to companies with a staff of 35+.
As the only association of its kind in Denmark, DAG is consulted by authorities regarding amended and upcoming legislation. We have solid communication lines with insurers and fellow organizations within the automotive trade.
DAG is a member of the Danish Association of SMEs, along with most of our colleagues, which ensures considerable political influence compared to our moderate size. DAG was a co-founder of EGARA in the early 1990s.
About 200 car dismantlers nationwide are government-approved. This implies an environment certificate in accordance with ISO 14001 and various legal requirements. Government-approved ATFs appear on public listing as companies allowed to receive ELVs.
How DAG is Tackling Denmark’s Auto Recycling Challenges
Total vehicles are sold by the insurance companies at auction portals, paving the way for exports abroad. This is leading to a shortage of parts in the Danish market – to such an extent that our member companies, in some cases, are importing second-hand spare parts from abroad. We feel, though, that a breaking point is approaching, as the interest of the insurance companies in prescribing second-hand parts to the repairers is increasing. In this light, they might focus on this issue.
Many repair shops oppose using second-hand spare parts, mostly because they make better profit from new spare parts. We have been lobbying for higher profits and are now looking forward to the implementation of a scheme enabling the insurance companies to offer a kind of bonus for the use of second-hand spare parts. The market share for second-hand parts (in damage repair) is about 2% at present.
A few words on the interface between insurance companies and repair shops: The association of Danish insurance companies are running an app built on Audatex to assess damages. This app – or, rather, portal – is used by all repair and body shops and insurance companies. Alongside this portal is another one enabling insurance companies and repair shops to see and purchase second-hand spare parts and alternative, new spare parts. Data on second-hand parts are delivered by two trade portals run by our members.
A particular challenge – drawing special attention in this era of “green transition” – is the repair limit fixed by government law. In case the damage to a vehicle is calculated to cost 65-75% of the trade value of the car, the insurer should offer compensation in cash or repair. If beyond 75%, the car must be declared totally damaged. Furthermore, damages should only be calculated with new spare parts, pushing even more vehicles beyond the repair limit. The entire aftermarket is lobbying against this legislation, as well.
DAG’s Role in Promoting Recycled Parts Through Strategic Partnerships with Insurers and Repair Shops
As mentioned above, we seem to be reaching a breaking point when insurance companies are taking a greater interest in prescribing second-hand parts (as a consequence of the upcoming ESG requirements). More and more insurance companies are measuring the “performance” of repair shops regarding second-hand parts.
How Danish Auto Recyclers Can Thrive Amid New EU Regulations and Rising Demand for Recycled Materials
At DAG, we are pursuing a strategy to remain relevant – I’d rather say indispensable – when the new EU Regulation on circular production of cars is adopted and implemented.
This means participating in projects to extract materials from cars for the automotive and recycling industries. It’s complicated because only a few ATFs see the full scope of what is going to come, and it will be a challenge to scale up the collection/retrieval of materials such as plastic—should we find the right buyers.
Another important issue is to ensure that we are able – ie allowed – to receive and assess the state of lithium batteries.
We already see an increasing demand for second-hand spare parts. This motivates us to increase quality (the right part for the right car at the right time in the right (agreed) quality).
While insurance companies could further motivate repair and body shops to use our products, it is our job to explain to the consumer the advantages of choosing secondhand.
DAG’s Initiatives to Equip Members for Electric Vehicle Battery Regulations
At DAG, we are constantly on the lookout for future requirements regarding investments and training. As mentioned above, we feel insecure about what rights and privileges we will be stored according to the new battery regulation.
Over the last few years, we have been lobbying for adjustments/amendments to legislation present that provides us with requirements and guidelines for handling traction batteries, including storage.
We have already developed technical courses on safety and handling (according to best practices) in cooperation with technical colleges around the country.
Electric vehicles – and the handling of them – seems to be a mutual challenge for all our colleagues in Europe.
Visit the Danish Auto Recycling Association (DAG)
