Adam Małyszko, CEO of the Association of Car Recycling (FORS) in Poland, shares his insights on the future of the car recycling industry with Auto Recycling World. He discusses challenges such as electric vehicle adoption, the grey market, and evolving opportunities in battery recycling, emphasizing gradual industry evolution over revolutionary changes.
What awaits the car recycling industry in the coming years? This is a question every dismantling station owner asks himself. The media constantly talks about electric cars, the ban on the production of combustion cars, the role of Chinese production and their expansion into the European market. In addition, we feel the effects of the pandemic, the war in Ukraine, inflation and high interest rates. We are not optimistic about the announced solutions to the European Green Deal.
All this does not give entrepreneurs peace of mind. After an unusually large increase in raw material prices in 2022, followed by an equally sharp decline, we have had a stable situation for quite a long time. The chart below shows changes in the price of car body scrap after disassembly in Poland between 2001 and 2024.
Analyzing the data (below), we can see that there were also periods when prices dropped to a very low level.
Although these periods were very short, they resulted in a decline in revenues, but also reduced the cost of purchasing vehicles for disassembly, especially heavily used cars from which parts are not obtained for reuse.
PRICES OF BODY SCRAP in years 2001-2024 (in PLN)
In Poland, due to the huge “grey zone” (not legal operations without licenses and environmental requirements), obtaining vehicles for dismantling is peculiarly difficult. We are often unable to pay as much as the grey zone offers, which of course, has much lower operating costs, not to mention the taxes; it does not pay at all or pays less. Currently, many companies in Poland, especially small family businesses, suffer a lot of difficulties, especially those companies that have not decided yet to dismantle used car parts. Selling parts to many companies gives the opportunity not only to survive in difficult times but also to develop. It is knowledge, experience, intuition, professional preparation of such parts for sale, appropriate pricing and an offer for foreign markets that make many companies in Poland still believe in success despite the ever-present grey zone. These companies no longer believe in any changes in the national or EU regulations; they do not wait for someone to help them; they act with faith and achieve their intended goals.
The situation in Poland is confirmed by the data presented in the Vehicle Deregistration table. There are new challenges ahead of us; these are electric vehicles, that we need to get to know better – or even “like them”. There are many controversial opinions on this topic; we hear that electric vehicles will not be repaired after an accident but will be cancelled because of the high cost of repair, the demand for parts will decrease, and Chinese electric cars will be disposable, lasting for a maximum of seven years.
Vehicle Deregistration table
In my opinion there will be no revolution in our industry, only a gradual evolution involving a change in the vehicle’s power source, where the combustion engine will be replaced by an electric motor and battery. A battery that will not be a problem but a valuable element of the vehicle being dismantled. A large market for battery processing plants is currently emerging. Two large plants were launched in Poland this year, including one of the largest in Europe. This will end the constant scare of the problem of used batteries; this problem has never been and will never be; there are too many valuable elements contained in such batteries.
It’s like saying that there is a problem with the disposal of a used catalytic converter from a vehicle. I believe that we have a lot of opportunities to use batteries. We can sell them as spare parts, sell them to companies that build energy storage facilities or regenerate damaged batteries. Only when we have no longer the opportunity to reuse them, we should carefully examine the market for battery processing plants and hand them over to places where we will be paid fairly for the content of valuable elements. According to my knowledge, currently, for the same lithium-ion battery, some plants demand payment for recycling, others offer free collection, but there are also those that pay from 1,000 to 3,000 Euro per tonne of such batteries.
I am convinced that in the near future, we will have more and more reliable valuations, and as in the case of the catalysts market, we will have a wide selection of good contractors and much higher prices.
I also observe with great interest the emerging market of battery replacement places. Replacing the battery in 5 minutes means new possibilities not only in traveling by electric vehicles, but it is also an opportunity for our industry. In this system, the technical life of the vehicle may last longer, and the battery obtained from a damaged vehicle will enter the replacement system and will also have a longer period of use. We may soon become an element of this innovative system. So, before combustion vehicles disappear from the market in Europe, many innovative solutions may positively surprise us.
*CEPIK – CENTRAL REGISTER OF VEHICLES AND DRIVERS in Poland
** – Archive vehicles are registered vehicles for which more than 10 years have passed since the date of first registration in Poland, and for a period of 6 or more years, no update has been received from the registration authorities, the Insurance Guarantee Fund or vehicle inspection stations.
