The latest instalment of the International Roundtable (IRT) Webinar on Auto Recycling took place on October 8, 2024, with a focus on developments in Australia and Japan. The IRT has been a crucial forum for auto recycling discussions worldwide, fostering global cooperation and knowledge exchange on sustainable practices. This particular session was the third in a series with a regional focus, zooming in on Asia and Australia.
Hosted by Steve Fletcher from Automotive Recyclers of Canada and Haydn Davies, Editor of Auto Recycling World and ATF Professional, the session featured presentations by David Nolan, Executive Director Auto Recyclers Association of Australia, and Minoru Goko, Professor-Nihon Automobile College, Vice President-NPO-JARA from Japan. Fletcher set the stage by outlining the significance of the IRT series, which has spanned 11 global events over the past 20 years, with COVID-19 temporarily interrupting the ability to hold in-person gatherings. However, the advent of virtual webinars has enabled the continuation of valuable conversations, attracting participants from over 15 countries.
David Nolan: Insights into the Australian Auto Recycling Industry
David Nolan, representing the Auto Recyclers Association of Australia, offered an in-depth look at the state of the industry in his country. He began with some striking statistics: Australia has a population of 26 million people and 20 million registered vehicles. The auto recycling industry generates $1.25 billion annually, with 1,800 businesses employing 4,500 people and scrapping 800,000 vehicles each year. Despite its size, the industry remains highly fragmented, with a low barrier to entry, leading to a predominance of small businesses.
Nolan outlined how the industry in Australia has evolved over the past several decades. During the 1970s, Australia began importing vehicles from Japan, leading to a rise in the volume of second-hand parts from Japanese vehicles. By the 1990s and 2000s, the industry saw its most profitable period, with cash transactions and minimal government oversight driving significant growth. However, as the industry became more international, the challenges of competing with operators from the Middle East, who had begun setting up yards in Australia, became apparent.
A key theme of Nolan’s presentation was the impact of electric vehicles (EVs) on the future of auto recycling. The transition to EVs, he noted, would profoundly reshape the industry, particularly in terms of revenue. Currently, a significant portion of auto recycling income is derived from engines, transmissions, and mechanical components. As EVs replace internal combustion engines, the focus will shift to the recycling of batteries and other EV-specific components. Nolan expressed uncertainty about how the industry will adapt to this shift, particularly given the current lack of regulation around battery recycling in Australia.
In terms of future trends, Nolan emphasized the increasing role of government regulation and the need for businesses to embrace technology. He mentioned that 25% of Australian auto recycling businesses are already using network technology, a figure he expects to rise significantly in the coming years. Artificial intelligence (AI), in particular, could transform parts sales and the interchange systems that are currently in place.
Minoru Goko: Auto Recycling in Japan
Following Nolan, Minoru Goko from Japan presented a comprehensive overview of the Japanese auto recycling industry. Japan, with over 82 million cars on the road, is a global leader in vehicle production, exporting millions of vehicles annually. Goko emphasized that Japan’s auto recycling industry is highly efficient, with a recycling rate of over 95% for End-of-Life Vehicles (ELVs).
Goko discussed how the boundary between used cars and ELVs is somewhat ambiguous in Japan due to the country’s vehicle de-registration system. He also highlighted the trend of Japanese ELV recyclers diversifying into other areas, such as car repair, parts sales, and even rental car businesses. This diversification is driven by a shrinking domestic market for ELVs, as more used cars are exported to other countries, particularly in Asia and the Middle East.
A critical point in Goko’s presentation was the impact of EVs and hybrid vehicles (HVs) on the Japanese auto recycling industry. Like in Australia, EVs present both challenges and opportunities. Japan is seeing a gradual increase in EV adoption, but the country is still heavily reliant on hybrid vehicles, which make up a significant portion of new car sales. Goko pointed out that while hybrid and EV components are recyclable, the process is more complex and costly compared to traditional vehicles, particularly due to the risks associated with handling lithium-ion batteries.
In terms of future challenges, Goko mentioned the need for better regulation and enforcement, particularly in light of the increasing number of illegal recyclers operating in Japan. He also touched on the role of AI and digitalization in the industry, echoing Nolan’s points about the potential for technology to revolutionize parts sales and inventory management.
Key Takeaways
The IRT Webinar provided a wealth of information on the state of auto recycling in both Australia and Japan, highlighting the common challenges and opportunities these countries face in the transition to EVs and a more sustainable future. Both presenters underscored the importance of international collaboration and the role of technology in driving the industry forward.
One of the most significant themes was the uncertainty surrounding EV battery recycling and its economic viability. As EVs become more prevalent, both Australia and Japan will need to develop robust systems for recycling batteries and other components, with government regulation playing a crucial role.
In conclusion, the IRT Webinar was a valuable platform for exchanging knowledge and ideas, reinforcing the importance of global cooperation in tackling the challenges facing the auto recycling industry. As the world moves toward a future dominated by electric and hybrid vehicles, webinars like this will be instrumental in guiding the industry through this period of profound change.
Visit irt-autorecycling.org for videos of previous webinars and to find out more about the IRT, and to keep up to date with global auto recycling industry news, head to autorecyclingworld.com.
