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Saturday, 18 August, 2001, 00:46 GMT 01:46 UK
'Recycling law could bankrupt car makers'
Car wrecks
The value of scrap metal has fallen dramatically
By the BBC's business reporter Quentin Sommerville

The motor industry, environmentalists and UK government have clashed over new environmental legislation.

Car makers claim the so-called End of Life Vehicles directive could cost the industry millions of pounds and threaten struggling car producers with bankruptcy.

Britain is pushing ahead with the directive ahead of its European counterparts, starting with a consultation period.

The number of cars being dumped illegally in the UK is being viewed as a growing menace, climbing from under 200,000 abandoned cars a few years ago, to over one million this year.

And car recycling has moved sharply up the political agenda in the UK, prompting pre-election pledges from prime minister Tony Blair.

Abandoned car
Car dumping is a growing problem

Car owners have turned their backs on scrap yards because of the collapse in world scrap prices.

Motorists now have to pay to have their banger crushed, compacted and recycled, instead of the hard cash scrap metal merchants would have paid them a few years ago.

The new legislation from Brussels will mean that in 2002 car-makers will become responsible for some of the costs of recycling new cars.

By 2007 the legislation will go further, making them provide for the recycling costs of all cars - including their historical production.

"Whingeing"

Christopher Macgowan, of the Society of Motor Manufacturers says the new rules could not come at a worse time for the industry.

"The UK government seems to want to make it all move forward to 2002, and that would impose an intolerable financial burden on our industry, at the very moment when the manufacturing industry is going through a very bad time," Mr Macgowan said.

Christopher Macgowan
Christopher Macgowan warned of new law's financial implications

Europe's car makers are struggling with a downturn which has seen some of the biggest names, such as General Motors and Ford, sustaining heavy losses in their UK and continental car businesses.

Sources in the industry says that struggling car-maker MG Rover could be overwhelmed by the scale of the liability due on its new and old cars.

But Roger Higman of Friends of the Earth, dismissed the car industry's complaints as "whingeing".

"The waste from cars that is shredded up is responsible for a tenth of the hazardous waste produced every year in Europe.

"All over the continent, abandoned cars litter the streets because people don't have an incentive to recycle.

This legislation will give them an incentive - the industry should support it," Mr Higman said.

Around 75% of a car is currently recycled, although plastics, glass and toxic and heavy metals still head for landfill sites.

See also:

23 Aug 00 | Scotland
Cars dumped in street 'scrapyards'
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