Foreword
At the end of 2010, economic recovery seemed to be gaining ground, but the crisis is not yet over. This is for example reflected in the lower numbers of new vehicles purchased. The number of trucks sold dropped sharply in 2010, as compared to the previous year; the sales of other commercial vehicles were also lower than in 2009. The sales figures for new passenger cars and light commercial vehicles, on the other hand, showed a considerable increase. The number of new cars sold, at 534,000 was more than 20 percent higher than the 440,000 sold in 2009.
A rise in demand for products in the ARN portfolio demonstrated that, despite the economic crisis, sustainability and consideration for the environment are becoming increasingly important in the activities of modern businesses. ARN was for example highly successful with its ARN Environmental Scan. There was also considerable interest in the new recycling activities at ARN’s Post Shredder Technology (PST) facility in Tiel that was opened in the spring of 2011.
National scrappage scheme
The national scrappage scheme that remained in place until 21 April 2010 gave the automotive industry a considerable boost. A new replacement was purchased for one third of the more than 81,000 discarded cars. The scrappage scheme was both effective and efficient in its structure, and unlike in the neighbouring countries, did not lead to any disruption in car sales, in the Netherlands. ARN made an important contribution to the effective implementation of the scrappage scheme. Its role in preventing fraud was also successful. The effect of the scrappage scheme on the environment has been moderately positive. Less diesel vehicles were registered than anticipated. Among the old cars handed in, a large proportion were fitted either with a none or with a less effective catalyst than the newer models.
Waste disposal fee
To ensure its continued ability to implement its statutory task in the environmentally-sound recycling of end-of-life vehicles, ARN was forced to raise the waste disposal fee from 15 to 45 euros per car (19% vat included) on July 1, 2010. The main reason for this increase was the delayed completion of the PST facility. As a result, recycling costs remained at a higher level than predicted for a longer period. ARN also made an additional financial contribution to the national scrappage scheme. Furthermore, over the coming years, funding will be needed for research into the consequences for recycling of new technologies that are being introduced in cars. This for example includes the processing of high-voltage batteries from electrical vehicles and the composite materials that increasingly are used in cars.
The waste disposal fee of 45 euros per car also applies for 2011. As soon as the consequences of the opening of the PST facility are fully clear, ARN will issue new forecasts for a sustainable level of the waste disposal fee. It should be noted that ARN still considers the waste disposal fee the best instrument for covering the recycling costs for cars. The scheme is transparent and consumers are not required to pay any unnecessary chain margin or purchase tax on passenger cars and motorcycles, which would be the case if the costs for recycling were included in the cost price of a vehicle.
Stakeholder survey
During the first quarter of 2010, a survey in the form of a series of interviews was held among ARN’s external stakeholders. The objective was to chart out the stakeholders’ views of ARN, and to determine how they assess the organization’s plans and ambitions. One of the conclusions is that ARN is well-known among its stakeholders, and is viewed as a well-appreciated and respected institute. The contribution to the environment, the PST facility and ARN as a centre of knowledge scored high with the stakeholders.
The interviewees did sound a critical note in respect of the different roles of ARN now the organization is no longer focused solely on car recycling, but is also undertaking new activities. The stakeholders still primarily view ARN as responsible for carrying out statutory tasks financed by the waste disposal fee fund. They perceive the new market activities of ARN as unfair competition. In 2011, ARN will make every effort to clarify the added value for the stakeholders of making the knowledge and experience accrued in the field of recycling more widely available to the entire mobility sector. There is clear demand from the market for the expertise established by ARN, and any revenue from the new activities will be finally fed back into the fund.
By establishing four independent operating companies, ARN has now introduced a clear separation between activities supported by the waste disposal fee fund and activities for which additional charges are made to third parties (possibly including ARN operating companies). ARN believes that this structure puts an end to the role confusion.
PST facility
ARN has been given the statutory task of ensuring 95% recycling of cars by 2015. The PST facility has an essential role to play in achieving this recycling percentage. In 2010, ARN entered negotiations with the shredder companies on the processing of shredder waste in Tiel, in order to arrive at an acceptable price. It is in the interests of all parties to supply the highest possible volume of shredder waste to the PST facility, to allow the facility to operate at the lowest achievable cost.
The PST facility will unavoidably result in lower income for the dismantling companies, quite simply because less dismantling is necessary. At a very early stage, ARN informed the operators in the dismantling sector of the consequences of establishing the facility, to allow these businesses to take the necessary measures in good time. Cooperation with the dismantling companies remains essential to ARN. ARN will use its expertise to support the sector in other ways.
Outlook for 2011
ARN is optimistic about 2011. Economic recovery is expected to continue. The opening of the PST facility will lead to lower dismantling costs. This in turn will reduce costs for ARN, which in the future will contribute to a lower waste disposal fee. Due to the delayed commissioning of the PST facility, as a result of which the processing of materials eligible for the scrappage premium will continue for longer than predicted, 2011 is expected to show a reduction rather than an increase in the waste disposal fee fund. Other factors are the fact that no significant rise in interest rates is expected, combined with the policy aimed at avoiding investment risks.
ARN organization
2010 saw no changes to the composition of the executive board of the Auto & Recycling Foundation or the Supervisory Board. ARN did mark the departure on 31 December 2010 of its CEO Dave Bebelaar, who retired on that date. With the departure of Bebelaar, a key figure has left the organization, who was responsible for a positive development of ARN’s relationships with manufacturers and other stakeholders. In the almost eight years during which he headed the organization, Bebelaar introduced many new developments at ARN. The PST facility can certainly be considered the jewel in the crown of his work. Within ARN, Dave Bebelaar enjoys a great deal of appreciation and respect, as CEO and above all as a remarkable man. We would like to take this opportunity to wish him many more enjoyable years in good health!
Finally, I would like to thank all the employees of ARN for their dedication and all the external parties for their successful cooperation in 2010!
Arie de Jong
CEO ARN
Amsterdam, 16 May 2011
