The issue of missing end-of-life vehicles (ELVs) is a major concern in both Japan and the EU, with unaccounted-for deregistered vehicles leading to environmental risks and illegal dismantling. Arata Abe, Professor at Yamaguchi University, examines Japan’s experience in tackling this problem through the ELV Recycling Law, which significantly reduced missing vehicles. His insights provide valuable lessons for improving vehicle recycling policies and tracking deregistered vehicles more effectively worldwide.
The European Commission’s webpage on the ELV Regulation states that one-third of the vehicles deregistered in the EU are ‘missing’. The basis for this is shown in several reports about the ELV Directive. These reports show that the number of deregistered vehicles is calculated using data on the stock of vehicles (the number of vehicles owned) and the flow of vehicles (the number of new registrations). The number of vehicles that have gone missing is calculated by subtracting the number of end-of-life vehicles and the number of used vehicles exported from the number of deregistered vehicles.
In fact, something similar happened in Japan in the past. In Japan, the ELV Recycling Law came into force in 2005, and as a result, the number of end-of-life vehicles was counted and made public. In the same way as the EU, the number of deregistered vehicles was calculated using data on the stock and flow of vehicles, and when the number of officially scrapped end-of-life vehicles and the number of used vehicles exported were subtracted, it was found that there were a considerable number of missing vehicles. Specifically, in 2005, over one million deregistered vehicles could not be accounted for in the statistics, and this was referred to as the ‘1 million missing vehicles problem’ in Japan.
These missing vehicles can be broken down into three categories:
(1) end-of-life vehicles that have not been disposed of through the proper channels;
(2) used vehicles exported that have not been counted in the statistics; and
(3) an increase in the number of deregistered vehicles, such as vehicles in distribution stock or abandoned vehicles. The act of dismantling vehicles without going through the proper channels often involves environmental pollution. It can also be a form of tax evasion, which is unfair.
The problem of missing vehicles was identified when the ELV Recycling Law came into force in 2005. As the law became more widely known, the number of missing vehicles gradually decreased. Figure 1 shows this; In 2005, 1.22 million vehicles, or 25% of the total number of deregistered vehicles, were missing. After that, the percentage of missing vehicles decreased to 14% in 2006, 6% in 2007, and 1% in 2008. Since then, there have been some fluctuations, but the figure has generally remained around 100,000 vehicles.
Japan’s ELV Recycling Law requires owners to pay a ‘recycling fee’ when they purchase a new vehicle. The recycling fee is the cost involved in recycling the waste materials (such as CFCs, airbags and shredder residue) that are produced when end-of-life vehicles are dismantled and crushed. The money is pooled and used to cover these costs when the vehicle is scrapped. As the owner is relieved of the burden of paying these costs when the vehicle is scrapped, it is theoretically more reasonable to recycle the vehicle in accordance with the proper procedures.
For vehicles purchased as ‘new’ before 2005, the recycling fee was required to be paid at the time of inspection or when the vehicle was scrapped. Immediately after the law came into effect, there were many cases of vehicles for which the recycling fee had not been deposited being scrapped, and the recycling fee had to be paid when the vehicle was scrapped. It is thought there was an incentive to avoid paying this fee by illegally scrapping the vehicle. On the other hand, after a while, the number of vehicles for which recycling fees had been deposited increased, and the incentive to carry out illegal dismantling is thought to have decreased. This is reflected in the data for 2006 and 2007. This shows the system’s effectiveness in paying in advance for the costs involved in disposing of waste after sorting.
In Japan, the vehicle deregistration system was revised in 2005 to coincide with the implementation of the ELV Recycling Law. Until then, vehicles were sometimes dismantled or exported while still in the temporary deregistration state. However, the amendment made it necessary to notify the authorities when dismantling or exporting a vehicle in the temporary deregistration state. In addition, a system was created whereby weight tax is refunded for vehicles that have been officially deregistered through such proper dismantling. If the incentive to dismantle illegally is weakened by the development of such a deregistration system, paying recycling fees in advance will become unnecessary. This point has not been fully discussed, and further discussion is required.
Figure 1: Breakdown of the Number of Vehicles Deregistered in Japan
Source: Japan Automobile Recycling Promotion Center, Japan Ministry of Finance Trade Statistics, Japan Automobile Dealers Association, Light Motor Vehicle Inspection Organization, e-stat (Official Statistics of Japan)
Note: The number of used cars exported in 2005 is the figure from the trade statistics. For other years, it is the number of vehicles deregistered for export and the number of light vehicles reported for export.
