End-of-Life Vehicle Management Systems: History
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End-of-life vehicle (ELV) management is becoming increasingly important as the automotive industry is one of the world’s most critical sectors and is rapidly expanding. ELV management is essential for environmental protection and wellbeing under Sustainable Development Goal (SDG) 3, provides more jobs under SDG 8, and promotes a circular economy under SDG 11. All these factors contribute to the importance of ELV management as a research topic. Today, ELV management is well-positioned and an emerging research area particularly on ELV recycling systems in Europe, Japan, Korea, Taiwan and China. This paper aims to provide a review of ELV management in Malaysia, Thailand and Indonesia, which are the major automotive production bases in Southeast Asia, but which lack formal ELV recycling policies. Towards this end, the researchers have adopted a qualitative study in which document research has been used to analyze existing scientific studies and other published sources. The findings reveal that immature ELV management systems in Malaysia, Thailand and Indonesia are the reason that no specific ELV laws and regulations exist, as well as why there are no precise ELV statistics. Nevertheless, there have been growing concerns about ELV management, as evidenced by environmental regulations and programs aimed at better management of ELV recycling in these countries. These findings will assist the respective authorities in formulating specific laws and regulations that will ensure sustainable management of ELV and will also ensure a better life and economy for society and for industry.

  • end-of-life vehicle
  • management
  • laws and regulations
  • recycling
  • Asia
  • review

1. Introduction

The automotive industry has always been at the heart of the industrialization plans of developing countries due to three main factors: firstly, the establishment of the automotive industry stimulates a large amount of employment, investment, and consumption. The automotive industry provides new jobs and promotes economic growth under SDG 8, which reduces poverty in society under SDG 1. This, accompanied by better automotive waste management, will eventually ensure good health and wellbeing under SDG 3. Secondly, the automotive industry has always been thought to generate several significant backward and forward linkages, both with services and manufacturing activities, resulting in spillover effects to the entire economy under SDG 11. Lastly, and for the reasons stated above, the automobile has historically served as a metaphor for the entire process of capitalistic development of societies, rather than just a mode of transportation [1]. In 2020, approximately 78 million new motor vehicles had been manufactured globally and the annual production of automobiles had reduced by 15.22% compared to 2019 (92 million) [2]. Additionally, global car sales in 2020 were 63.8 million units, a 14.82% decrease from 74.9 million units in 2019 [3]. The decrease, both in terms of motor vehicle production and the number of cars sold globally, was primarily caused by the economic recession caused by the COVID-19 pandemic. According to the International Organization of Motor Vehicle Manufacturers (OICA), more than 1.28 billion vehicles had been in use worldwide in 2015, with passenger cars accounting for approximately 947 million of those [4]. Furthermore, more than 1.68 billion vehicles are expected to be on the road worldwide by 2040 [5]. In 2019, the number of passenger cars on the road in the European Union had reached 242.7 million [6].
Automobiles have grown in popularity around the world, including in Southeast Asia, where more than 228.7 million motor vehicles were registered in 2020 [7], an increase of approximately 0.76% over the previous year. According to the ASEAN Stats Data portal, the total number of registered road motor vehicles in Southeast Asia countries had been approximately 2.4 billion from 2008 to 2020. Among the ten Southeast Asian countries, Indonesia currently has the most registered road motor vehicles (approximately 1.4 billion), which is more than half of the total number of registered road vehicles in the Southeast followed by Thailand (approximately 450 million) and Malaysia (approximately 327 million). Thailand ranked among the top 20 major countries in terms of automotive production and sales in 2009 and 2010 [8]. Furthermore, Thailand is now one of the world’s leading producers and exporters of automobiles and auto parts [1]. Indonesia also currently ranks among the top 20 major countries in terms of automotive sales [8]. Meanwhile, Malaysia, Southeast Asia’s third-largest automotive market after Thailand and Indonesia [9], registered 508,911 new passenger and commercial vehicles in 2021 [10], led by national brands such as Proton and Perodua [9].
A large number of end-of-life vehicles (ELVs) are awaiting appropriate treatment as a result of increased automotive production and high consumer demand for new vehicles [11]. For instance, in 2018 the European Union generated 6.083 million ELVs with a total weight of 6.732 million tons (including waste parts) [12]. In the fiscal year 2020, approximately 3.15 million vehicles in Japan had reached the end of their life cycle [13]. Furthermore, according to D’Adamo et al. [14], the annual production of ELVs in Europe is expected to reach 8.1 million tons by 2030. ELVs have been receiving special attention due to their large size, harmful components and valuable materials such as base metals (e.g., iron and aluminum) and critical metals (e.g., rare earth elements) [12,15]. ELV reuse, recovery and recycling are encouraged for a variety of economic and environmental reasons [16]. When a vehicle reaches the end of its useful life naturally, known as “natural ELV”, or when a vehicle has not reached its lifetime, but is ended by a disaster such as flooding or an accident, also known as ‘premature ELV’, it must be properly managed to recover useful materials, particularly metals, and to avoid environmental pollution [17]. Understanding of recycling and quantitative flow of ELVs is critical due to their resource recovery potential as well as the environmental impact posed by their toxic chemicals upon disposal [18]. ELVs are usually composed of 20,000 to 30,000 different parts, which include plastics, ferrous and non-ferrous metals, textiles, rubber, wires, glass and a variety of other materials. Some of the materials are valuable resources such as zinc, iron, aluminum, copper, platinum and lead, but the composition varies depending on the model of vehicle, type, manufacturing year and size. Reusing auto parts such as tires, glass, transmission, engines, batteries, doors and seats from ELVs is beneficial in terms of resource conservation if vehicle safety is maintained. As a result, before proceeding with the dismantling and shredding steps, ELV dismantlers must obtain detailed material compositions in order to identify reusable parts on the market.

2. ELV Management System: Best Practices from Developed Asia Countries

2.1. ELV Management Regulation in Japan and Korea

A market-based ELV recycling flow had already been established across Japan before the implementation of the ELV Recycling Law. As such, ELVs were being collected by vehicle retailers, the valuable parts were being collected by dismantling workers, shredding operators were collecting non-ferrous and ferrous metals via shredding, and finally the ASR was almost completely disposed of in secure final disposal sites with no leachate control. However, measures to prevent illegal dumping and improper industrial waste treatment, leaving ASR, were needed. To ensure the proper treatment of ELVs, the ASR was obliged to go into landfills in control-type final disposal sites in 1995, where liquid fuels, lead batteries, coolant, oil and fluorescent tubes containing mercury were needed to be separated from ELVs before shredding [37]. However, because of the increase in ASR landfill costs and the volatile price of ferrous scrap, ELVs frequently became unsellable.
Hence, the existing market-based ELV recycling system failed, raising concerns about illegal dumping and improper treatment of ELVs. As a result of discussion in government councils about establishing the new ELV recycling system, the Law for the Recycling of ELV Vehicle was enacted in 2002 and enforced in 2005 [23]. With the need to reduce ASR due to a lack of final disposal sites, and effective use of resources, as well as to prevent illegal dumping and inappropriate treatment of ELV due to fluctuations in the steel scrap market [23], the ELV Recycling Law intended to establish appropriate roles among relevant players such as automobile manufacturers, vehicle owners, dismantling firms, ELVs collectors, resource recycling companies, fluorocarbons recycling enterprises and industry associations [38] to promote sound treatment and recycling ELVs.
The ELV recycling law is one that has been specifically enacted for automobile scrapping and recycling disposal. The ELV Recycling Law also stipulates the reuse, recycling and energy recovery rates for ASR as 30% and 50%, beginning from 2005 to 2009 and 2010 to 2014, respectively [23], while the recycling rates for airbags and ASR from 2015 are 85% and 75%, respectively [23]. The Japan Automobile Recycling Promotion Center (JARC) is an organization responsible for the operation of the recycling system [37]. The Ministry of Economy, Trade, and Industry and Ministry of Environment have designated JARC as the designated corporation in charge of the fund management corporation, the information management center and the designated recycling organization. JARC, as the information management center, manages the electronic manifest system [23,37], which covers all transactions between relevant operators in the ELV flows. When collecting and delivering ELVs, gas generators, fluorocarbons, dismantled vehicles and ASR, the relevant operators report to the manifest system. Furthermore, the ELV Recycling Law specifies the responsibilities of automobile manufacturers and importers for the recycling of airbags and ASR, as well as the safe treatment of fluorocarbons, but the recycling fees must be paid by the vehicle owner [37,38,39].
In Korea, the Act for Resource Recycling of Electrical and Electronic Equipment and Vehicles was enacted in 2007 and enforced in 2008 [37], and is quite similar to EU Directive 2000/53/EC. Before this act, the Korean government’s waste management policy had been based on extended producer responsibility (EPR). This act has strengthened the EPR policy, which has been incorporated into the integrated product policy through the implementation of the eco-assurance system [40].
The eco-assurance system necessitates, firstly, preventive management, which guarantees environmentally friendly design and manufacture of products, and, secondly, follow-up management, which guarantees environmentally sound waste management. Furthermore, this act assigns responsibility for ELV recycling to all the stakeholders involved, including manufacturers, dismantlers, shredders, importers, refrigerant gas processors and ASR recyclers, and mandates the recycling rate. Each stakeholder should participate in the recycling and treatment of ELVs by fulfilling their obligations at each stage following the Act’s ELV recycling and treatment standards.
The recycling rate is determined by presidential decree. The mandatory target recycling rate was set at a minimum of 85% before 2015 (including less than 5% energy-recovery rate), and at least 95% at the beginning of 2015 (including less than 10% energy-recovery rate). When the cost of ELV recycling exceeds the price of the ELV, the excess cost is borne by the importers and manufacturers. Besides that, the importers and manufacturers must submit information on recycling performance to the Korea Environment Corporation (KECO), which is then reported to the government [23].

2.2. ELVs Recycling System in Japan and Korea

Despite the existence of a legislative management system, the recycling flow of ELVs has been found to be nearly identical in Japan and Korea. When a vehicle becomes an ELV, the owner is required to deliver it to a collection operator. The collector operator delivers the ELV to fluorocarbons recovery if it contains fluorocarbons; otherwise, the ELV is handed over to a dismantling operator. The dismantling operator collects the valuable materials and parts for reuse and recycling, such as tires and engines, while removing certain items such as batteries and fluorescent lamps. Then, the shredding operator shreds the dismantled vehicle and collects valuable scrap metal that is delivered to the importer or vehicle manufacturer. Otherwise, the dismantling operators and shredding operators deliver dismantled vehicles to scrap dealers who buy whole dismantled vehicles. The scrap dealers then utilize the dismantled vehicles as the raw materials of steel and iron or export them as raw materials. The sorting process is essential for classifying ferrous and nonferrous metal materials. This makes use of an air classifier and the magnetic drum method. To separate non-ferrous metal, heavy media or eddy are used. 
The recycling and management system of ELVs involves several stakeholders including dismantling facilities, ASR-treatment facilities, shredding facilities, manufacturers and importers, and refrigerant-treatment facilities. ELV transporters working with dismantling facilities collect the vehicles from owners either with or without billing the treatment cost, with a market price after deregistration in a local municipality. Automobile manufacturers and importers (or producers) who have contracts with the transporters are also needed to gather ELVs from the owners free of charge, often offering them economic incentives based on market value. In addition, they also contribute to the recycling system by covering the ELV collection and recycling costs when the ELV market price is much less than both costs, while the transporters deliver ELVs to designated automobile-dismantling facilities for both manual and mechanical disassembly processes by recovering reusable and recyclable parts as well as by recovering gases and liquids for proper treatment. After dismantling, the remaining fraction is separated into ferrous and non-ferrous fractions using screening, hammer mill, magnetic, optical, density and manual separations in shredding facilities. The final residue is referred to ASR and is delivered to ASR-treatment facilities. The residue, which is usually composed of textiles, metals, wires, plastics, rubbers, sponges and glass, is approximated to be between 15% and 40% of the ELVs’ total weight. The residue is further processed at the ASR facilities to recover the ferrous and non-ferrous metals as well as glass, rubber and plastics.

2.3. ELVs Management System in Singapore

Prior to 1990, Singapore had been imposing several regulations on the rapidly expanding motor vehicle population, including import duties, road tax, basic registration fee, ad-valorem additional registration fees (ARF) and a lump-sum registration fee [43,44]. Both the ARF and road tax, which is an ownership tax, had been raised periodically to dampen the demand and control for car ownership [43]. The ARF, in particular, had increased approximately twelvefold from 15% of the open market value of a vehicle in 1975 to 175% in 1990 [42]. Although the ARF had significantly increased the cost of vehicle ownership, it had proven insufficient in controlling or limiting the growth of the vehicle population [44].
However, rapid economic growth has had the result of raising household incomes, making these costs more affordable, and the number of vehicle owners has been growing [43]. As a result, the vehicle quota system (VQS) was implemented in May 1990 to regulate, or better control, the growth in the vehicle population in Singapore [43] and to limit the number of cars by controlling vehicle ownership [45], since the usage taxes and fees were insufficient.
Singapore’s vehicle quota system uses uniform-price auctions to distribute certificates of entitlement (COE) or registration rights for various vehicle classes. The cost of vehicle ownership is determined directly by the market under the VQS, as the prices of both quota license premiums and vehicles fluctuate in response to market demand [43]. Each quota license allows a vehicle to be on the road for ten years. At the end of this period, the owner may either de-register the vehicle or renew the license for a further five-year or ten-year period, by paying a “prevailing quota license premium” [43,46]. Following that, no further renewals are permitted [44].
Such a scheme ensures that no individual has permanent ownership rights to a vehicle and contributes to lowering the vehicle population’s age [46]. If a motor vehicle is de-registered, exported, or scrapped before the expiry of the quota license, the owner is entitled to a rebate based on the quota license premium that was paid and this is pro-rated according to the remaining validity period of the quota license [44].
The quota for new motor vehicles is determined following a targeted rate of growth in the vehicle population and considering the projected vehicle de-registration. The VQS should thus be measured by its ability to control the rate of growth in the motor vehicle population. Between 1975 and 1989, the average annual motor vehicle population growth rate was 4.4%, but fell to 2.83% between 1990 and 2002 [44]. As a result, the VQS was able to reduce both the vehicle population and its volatility.

3. Scenario Analysis of Current ELV Management Systems in Selected Southeast Asia’s Developing Countries: Malaysia, Thailand and Indonesia

3.1. ELV Management System in Malaysia

In Malaysia, ELV recycling operates autonomously based on the market mechanism. Malaysia Automotive, Robotics and IoT Institute (MARii), an agency under the Ministry of International Trade and Industry (MITI), promotes the importance of safe and proper ELV recycling with the support of the Malaysia Automotive Recyclers Association (MAARA). The primary goal is to encourage the reuse of green automotive parts while also encouraging the circular economy. MARii concludes a general ELV recycling eco-system, which encapsulates the parties involved in a typical flow of parts, components and material, as well as the processes involved in Malaysia. This includes how MAARA members play vital roles in the dismantling of parts, in recycling, and in disposal.
In 2018, the Malaysian Standard (MS) 2697: 2018 was developed as a guideline for developing process control systems for the reuse, repair, remanufacture, or recycling (4R) of ELV parts or components. This standard would ensure that licensed entities, also known as authorized automotive treatment facilities (AATF), properly process and dispose of ELVs. The first AAFT was launched by the Malaysia Department of Environment (DOE) in March 2021, which addressed the issue of abandoned vehicles. An AATF is a facility licensed by the DOE under section 18 of the Environmental Quality Act 1974, and where components can be disposed of, particularly those containing scheduled waste, from vehicles that have been deregistered by the Malaysian Ministry of Transport following ELV regulations.
Malaysia, as a car-producing country, has taken some steps to ensure the proper handling of ELVs. For instance, the Malaysian government launched an initiative in 2009 with RM29 billion allocated to the “Cash for Clunkers” scrappage scheme, an initiative to encourage vehicle owners to officially declare their unused or unwanted vehicles as scrap by deregistering them [47]. Owners of vehicles manufactured for more than ten years who wanted to scrap their vehicles would receive a RM5000 rebate to purchase a new vehicle manufactured by Proton or Perodua. Kualiti Alam Sdn Bhd was tasked with handling the ELVs, which were supplied by Perodua and Proton. Kualiti Alam Sdn Bhd had successfully processed approximately 48,000 ELVs throughout its operation. Unfortunately, after three years of operation, Kualiti Alam Sdn Bhd ceased operations in 2011 because the rebate allocation for the scheme had been finished.
Due to the low vehicle scrap rate and high average vehicle age on Malaysian roads, the Malaysian government proposed the gradual implementation of ELV policy in the revised National Automotive Policy (NAP) 2009. This policy required an annual mandatory inspection as a condition for renewing road taxes for all vehicles aged 15 years or more and this was the first step towards full implementation of the ELV policy [48]. The gradual introduction of ELV policy, on the other hand, encountered stiff public opposition. It was later discovered that the legislation has been enacted without proper scrutiny [25]. Additionally, the later version of NAP (2014) shifted its emphasis on the Voluntary Vehicle Inspection Policy (VVIP), which was a less superior move when compared to the contentious “full-scale ELV policy” implementation in 2009. Meanwhile, one of the strategies under Safety, Environment and Consumerism in NAP 2020 was to promote the adoption of new, more environmentally friendly technology that would address pollution issues, emphasize vehicle safety and protect consumer rights. Additionally, the National Roadmap for Automotive Aftermarket (NRAA) under NAP 2020 would provide a guide for improving and optimizing the quality of component recycling and reuse. In line with the NAP 2020, a national occupational skills standard (NOSS) on ELV—parts and component salvage is being developed, focusing on the skills and knowledge required to perform competently in the automotive parts and components salvaging and recycling industry. This will ensure environmentally responsible ELV processing in Malaysia.
Furthermore, MAARA has recently signed a memorandum of understanding (MOU) with a local university that allows for the development of a study for an action plan for the remaking of ELV [50]. They have until 2025 to develop the ELV blueprint industry. Moving towards realizing the goal of achieving a 70% recyclability rate in 2030, the Malaysian government supports the industry in the development of significant skills and competencies, encourages the application of high technology and development of standards, while providing the necessary facilities for the automotive recycling industry. The collaboration with the government will transform the recycling industry into a regulated industry that focuses on environmental and consumer needs through the green initiatives of automotive recycling.

3.2. ELV Management System in Thailand

Despite being the largest production hub for global car manufacturers and the second-largest domestic market for automobiles in Southeast Asia, after Indonesia, Thailand has no formal policy regarding ELVs [27,28,29]. In addition, there are no statistics related to the number of ELVs in Thailand because the Department of Land and Transport (DLT) does not enforce the requirement for vehicle owners to de-register. Instead, after three years of failing to renew road taxes, the DLT automatically erases specific vehicles from the registration system [28].
The Thai government has raised the issue of ELV management over the years in order to eliminate waste [29], for instance, the Thai government has attempted to prohibit the importation of used vehicles and parts to protect its own automotive industries. However, in practice, such a strict restriction does not work well due to limited budget allocation, consumer and producer responsibility, or poor organization [51,52]. Automobile repair shops in Thailand are ranked first in terms of sources that generate harmful materials [53] and findings from Techakanont et al. [28] have revealed that the informal sector, such as garages and repair cars, has played a significant role in reusing, recovering and recycling old vehicles.
Although there is no direct law or regulation on ELV management in Thailand, there are several laws and regulations that govern ELV management activities such as the act on The Maintenance of The Cleanliness and Orderliness, which is related to the law about waste management, but this is not directly a regulation about ELV management of how a car should be registered after being used or landfilled [53]. Other laws included the Enhancement and Conservation of National Environmental Quality Act, B.E.2535 (1992), Pollution Prevention and Mitigation Policy (1997–2016), and Environment Standards.
Regardless of ELV management in Thailand, related laws and regulations in Thailand, as well as policy, appear to inspire most people to prolong car usage without keeping their cars in good condition [53]. This is caused by factors such as the presence of a second-hand car shop marketplace reduction of annual tax registration renewal fees and the vehicle value at the time of disposal [54].
Even until 2019, ELVs in Thailand had been primarily dismantled via a labor-intensive manual process, with only a single vehicle dismantled at the factory per day. Because the dismantling process has been disorganized, resources from ELVs have not been recovered efficiently. Furthermore, it was expected that the current capacity for dismantling vehicles would be insufficient to process the growing number of ELVs in the future [55]. In response to the situation, Thailand’s Industry Ministry signed an MOU on 8 February 2019, with the Industrial Estate Authority of Thailand and Japan’s New Energy and Industrial Technology Development Organization (NEDO) to demonstrate the operation of an ELV recycling system using heavy machinery for vehicle dismantling [55]. Toyota Tsusho Corporation had been entrusted with the demonstration project work.
Heavy machinery for dismantling vehicles has been introduced to formalize and optimize the ELV dismantling process, and it is now expected to dismantle 20 vehicles per day as opposed to one vehicle using labor-intensive manual dismantling. Additionally, in collaboration with Japan’s Ministry of Economy, Trade, and Industry, NEDO will also provide guidance on developing laws and regulations related to the proper and safe handling of ELVs suitable for Thailand, based on Japan’s Automobile Recycling Law. Moreover, valuable resources which cannot be processed in Thailand will be recycled in Japan, resulting in the creation of an international resource circulation system. The ultimate goal of the project is to create a model recycling system for Thailand and other Asian countries [55]. The properly recycled vehicle parts could be used in the industry to assist Thailand in reducing steel imports, as well as scrap waste from old vehicles [56].

3.3. ELV Management System in Indonesia

Domestic generation is the primary source of ELV in Indonesia, because the country has prohibited the importation of used cars since 2007. The red cross signs in the figure denote the author’s observation on the missing practices which usually can be found in other countries with ELV policies. ELV recycling in Indonesia has been managed by the informal sector [31] in order to comply with EU Directive 2000/53/EC or Japan’s Automotive Recycling Law of 2005. The informal sector collects and recycles ELVs without clear guidelines [57,58]. Originally from the informal sector, the dismantling companies collect and purchase ELVs on their own, and in some cases, the owners bring their ELVs to the company. Since the majority of ELV parts are too old, they are sold to scrap trading companies, recycling companies or steel plants rather than car owners or repair shops or used parts shops. Steel scraps from ELVs, for example, have been sent to steel plants, where they have been stored and turned into steel [31]. Although the Indonesian car demolition industry is still unrecognized, some local businesses have dismantling facilities. They buy used vehicles that can no longer be repaired from junkyards. This disassembling practice involves metal picking for wire harnesses through open combustion. The car’s body is also hand-cut and used as pieces of steel. Informal recyclers only recycle iron from vehicles, while other materials such as glass and plastic parts are processed separately [59].
Although there is no national regulatory system that directly manages ELV in Indonesia [30], ELV management is subject to strict monitoring under environmental laws. Among the relevant laws and regulations are General Environmental Legislation (2009), Ratified Environmental Convention, Environmental Legislation for Waste Management (2008), Local Environmental Legislation and Provincial Environmental Legislation [31]. Additionally, ELV recycling has also been promoted by Indonesian private vehicle companies, where they practice a take-back scheme to give vehicle users the option of returning their used ELVs if they meet the following requirements: (1) the vehicle must be free from additional waste; (2) all key components such as drive systems, chassis, body, catalytic converter/electronic control units are in the vehicle; (3) the vehicle should fulfil these previous two points before being put into storage; (4) the registration documents are handed over at the same time; (5) a ‘disposal certificate’ is required; and (6) only certified dismantling facilities, certified and authorized recycling workshops, or collection points, which have been nominated by the manufacturer, are permitted to issue these certificates. When an old vehicle is returned to the manufacturer, it is drained of all fluids, including brake fluid and oil. All reusable parts and recyclable materials are then removed. Separate recycling techniques are used for recyclable materials such as large plastic parts, tires, glass and others. The rest of the bodywork is shredded and disassembled into its constituent parts. These are then recovered and reused to the greatest extent possible [31].

This entry is adapted from the peer-reviewed paper 10.3390/su142114317

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