EU to investigate Dutch scrap car scheme

Operator rejects Commission allegation of subsidising dismantlers, excluding foreign firms

The director of a Dutch scheme set up to implement producer responsibility for collecting and managing end-of-life vehicles (ELVs) has hit back at a claim by the European Commission today that it could be unfairly subsidising car dismantlers, in breach of EU competition rules. Autorecycling Netherlands (ARN) said the Commission had misunderstood the scheme and vowed to prove it was legal.

According to the Commission, ARN could be contravening state aid rules because it pays a fixed fee to car dismantlers calculated as the average of total car dismantling costs. Companies with lower costs were therefore being "overcompensated," it said. Although the money paid by ARN comes from a fund created by manufacturers, this is government-sanctioned and thus constitutes state aid.

The Commission contrasted this arrangement with ARN's contracts with recycling companies, which involve competitive tendering. The Commission also warned that a clause excluding non-Dutch dismantlers from participating in the scheme could fall foul of EU single market rules.

"We will prove we don't give illegal subsidies," ARN director Jan Zimmerman told ENDS Daily today. Dismantling companies were not being reimbursed excessively, but were paid individually according to how much work they had done and received payment "very near to real costs." ARN could not organise dismantling contracts by tender because it had no control over the number of cars being brought in for scrapping, he said.

Mr Zimmerman said ARN was forced to exclude foreign dismantlers because it was bound by Dutch law to recycle 86% of cars by weight. Sending cars to be dismantled abroad would mean it could not monitor recycling rates. In any case, he said, it was not economic to transport scrap cars across borders because of their low value.

ARN was set up in 1995 and now recycles 90% of Dutch ELVs. Mr Zimmerman claimed that the Commission had only questioned the scheme now because other countries had shown an interest in adopting it following last year's agreement on the EU end-of-life vehicles directive. "We have the cheapest solution. It's successful and people want to see what we are doing," he said.

Follow Up:
European Commission, tel: +32 2 299 1111, and press release; ARN, tel: +31 20 661 3181.

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