A cost estimation framework to support increased value recovery from end-of-life vehicles

Abstract

The imminent introduction of the European Directive relating to the recovery and recycling of two million end-of-life (EoL) vehicles per annum has resulted in significant developments and changes within the UK vehicle recovery chain. The economic ramifications of this conformance have left many EoL stakeholders in a uniquely different market, based on contract negotiations, investment and very challenging targets. The archaic and reactive nature of the recovery industry has meant that the demands of being part of the extended enterprise have never been present, and as such waste reduction and value improvement have never been major industry concerns. With the introduction of this legislation comes an increased need for the recovery chain to understand the economics of its own operations, to better support any investment or processing decisions within the new market. This paper provides an overview to the stakeholders and their relationships within the UK recovery chain, and discusses the development of an EoL vehicle costing framework based on the current direct and indirect costs and revenues affecting vehicle retirement, to facilitate increased value recovery to an array of EoL operators. Each of the costing techniques adopted or developed within the framework are then further discussed, before the intended industrial applications of the framework are highlighted.