More and more we see and hear talk of the ‘Circular Economy' but what does it mean in practice? The circular economy focuses on reducing nonrenewable materials and energy consumption, promoting renewable feedstocks and energy, and keeping products/materials in use across the life cycle of a system.
Applying that to the Automotive Sector, there are around 33 million cars on UK roads with around 1.7M new cars joining the UK car park in 2022. The number of scrapped cars has been fairly consistent over the last few years with an estimated 1.3M being scrapped last year, so the overall size of the car park is growing, albeit slightly.
It's beyond doubt that motor manufacturers are now focussing on sustainability with the introduction of great new products that are low emission and feature heavily recycled & recyclable content.
Car design and development programmes still take 2-5 years to reach the market, so when most of these reach end of life, a lot of water will have passed under the bridge.
The most commonly scrapped car in 2022 was the Ford Focus, with the average age for end-of-life vehicles being 14 years.
If we use the Ford Focus as an example, ELV processors are typically dealing with cars that were launched in the late 1990's – which means they were developed early to mid-1990's – some 30 years ago!
The world was a different place back then, but, like now, climate change was high on the agenda. The Environment Agency (EA) came into being in 1995 as part of the UK's Environment Act and effort to combat climate change.
Looking at the timescales involved, ATF's will be dealing with ELV's that were designed without the sustainability rigour of the current mindset for the next 5-10 years. The EA has made it clear that it will continue to assist in driving up standards across all industry, with vehicle recycling high up the list.
ATF's will be under pressure to make more effective use of available resources to increase processing standards whilst maintaining margins. The industry will continue to professionalise. Typically, we are likely to see less people involved who are overall more skilled & competent, with increased levels of automation assisting with economies of scale. There will be more demand for higher productivity from these increasingly skilled people. The equipment & machinery used will be more sophisticated and will benefit from the deployment of Total Productive Maintenance (TPM) techniques.
Whilst the world comes to terms with the EV revolution, it's likely that the market for traditional ICE "green" parts will become stronger over the next decade. There will also likely be increased demand for recycled commodities including plastics.
Identifying opportunities, recruiting, and developing enhanced human capital, more reliable and robust processes and better utilisation of capital assets through TPM are all areas for exploitation in the coming years. Here at SMMT Industry Forum we are working directly with ATF's to address these issues and assist them in improving standards.
For more information and a discussion around how, we can help you start the journey, email ian.jolliffe@industryforum.co.uk
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