An analysis of the automotive dismantling industry in British Columbia: current trends impacting the future sustainability of the industry Prepared for the Automotive Retailers Association 2015-06-22 Acknowledgements The Automotive Retailers Association (ARA) would like to thank Meyers, Norris & Penny (MNP) for assembling the aggregate data used in the analysis of this paper. The ARA also wishes to thank the Automotive Recyclers Environmental Association (AREA) and Colin McKean for his assistance with compiling the environmental and salvage export data; the Insurance Corporation of British Columbia for the parts utilization data; Elite Body Shop and Wade Bartok with their assistance in generating vehicle repair estimates; and the members of B-CAR and the executive committee for their assistance, encouragement and expertise. Lastly, thanks to the Automotive Recyclers of Canada (ARC) for its support and financial contribution to this study. Due to these contributors, this study is based on highly reliable data on automotive dismantling in British Columbia. Responsibility The information contained in this report was obtained and/or derived from sources believed to be reliable. However, neither the Automotive Retailers Association nor the author of this paper is responsible for the improper use of any of the information contained herein. The manner of use of the information is the sole responsibility of the Automotive Retailers Association. Table of Contents Executive Summary ................................................................................................................... 1 Context and Objectives .......................................................................................................... 1 Methodology ........................................................................................................................... 1 Research Findings.................................................................................................................. 2 Results and Conclusions ........................................................................................................ 2 Study Limitations .................................................................................................................... 3 About the ARA ........................................................................................................................... 4 About the B.C. Auto Recyclers Division (B-CAR) ....................................................................... 4 The Evolution of the Recycling Industry ..................................................................................... 5 Recycled Parts Locating ......................................................................................................... 5 Metal Recyclers ...................................................................................................................... 6 Automotive Dismantlers and the Environment ............................................................................ 8 Overview ................................................................................................................................ 8 The Automotive Recyclers Environmental Association ........................................................... 8 The Canadian Automotive Recyclers Environmental Code of Practice ................................... 9 Waste Management ............................................................................................................... 9 Recycler Certification ................................................................................................................10 Vehicle Retirement Programs ...................................................................................................11 The Environmental Case for Utilizing Recycled Parts................................................................13 Methodology ..........................................................................................................................13 Analysis .................................................................................................................................14 Results ..................................................................................................................................16 Socio-Economic Impacts of Auto Recyclers in B.C. ..................................................................16 Salvage .....................................................................................................................................17 Overview ...............................................................................................................................17 Salvage Buyer Policies ..........................................................................................................19 Rebuilt Vehicle Inspections Process ......................................................................................22 Salvage Export Market ..........................................................................................................24 Brokered DPO .......................................................................................................................29 Salvage Designations ............................................................................................................31 Salvage Buyers .....................................................................................................................32 Salvage Revenue ..................................................................................................................33 Parts Utilization .....................................................................................................................34 Recycled Parts Spending ......................................................................................................35 The Economic Value of Recycled Parts .................................................................................37 Conclusion and Recommendations ...........................................................................................42 References ...............................................................................................................................44 Appendix A ...............................................................................................................................45 Appendix B ...............................................................................................................................51 Appendix C ...............................................................................................................................52 Table of Figures Figure 1 ICBC Designated Rebuild ............................................................................................................... 20 Figure 2 ICBC Designated Rebuild ............................................................................................................... 21 Figure 3 ICBC Designated Rebuild ............................................................................................................... 21 Figure 4 ICBC Designated Rebuild ............................................................................................................... 21 Figure 5 ICBC Designated Rebuild ............................................................................................................... 21 Figure 6 Improper Repair on a Rebuilt Vehicle ........................................................................................... 23 Figure 7 Improper Repair on a Rebuilt Vehicle ........................................................................................... 23 Figure 8 Improper Repair on a Rebuilt Vehicle ........................................................................................... 23 Figure 9 Improper Repair on a Rebuilt Vehicle ........................................................................................... 23 Figure 10 Salvage Exported Overseas ......................................................................................................... 26 Figure 11 Salvage Exported Overseas ......................................................................................................... 26 Figure 12 Salvage Exported Overseas ......................................................................................................... 26 Figure 13 Salvage Exported Overseas ......................................................................................................... 26 Figure 14 Salvage Exported Overseas ......................................................................................................... 27 Figure 15 Salvage Exported Overseas ......................................................................................................... 27 Table of Tables Table 1 ELV Waste Management in B.C. ..................................................................................10 Table 2 Average Parts Life Span ..............................................................................................14 Table 3 Estimated CO2 savings per recycled part type ..............................................................16 Table 4 Economic Impacts of the automotive recycling activity in B.C. for 2013 ($ millions unless noted) ............................................................................................................................16 Table 5 Average prices paid for