New car prices are predicted to rise if a draft regulation dealing with the disposal of end-of-life vehicles (ELV) is not amended, according to the motor industry.
Following years of discussions between the Department of the Environment and the motor industry, the ELV draft regulation was published recently. The draft, which is open to consultation until the end of the month, will place an annual cost on some of the country's largest car importers of more than €247,000.
Even vehicle distributors who import low-volume marques will be required to pay a minimum licence charge estimated to be upwards of €66,000 every year. These costs will be passed on to the buyers of new cars, according to leading distributors.
The additional costs were written into the draft legislation by the Minister for the Environment, Dick Roche, who is proposing that every vehicle distributor with an annual turnover in excess of €80 million pays an annual licence fee of €7,500 to each local authority that has an ELV treatment centre.
At least 43 treatment centres will be established throughout the state that will between them dismantle between 100,000 and 120,000 ELVs annually.
The Department of the Environment is proposing that there will be at least one treatment centre in 32 local authority regions. And, for regions that have populations of more than 150,000 people, an additional treatment centre will be established for every additional 150,000 people.
The treatment centres, which will be licensed and inspected by the local authorities, will be required to recycle at least 85 per cent of disposed vehicles and remove all pollutants, such as brake fluid and engine oil, in an environmentally responsible manner. They will also issue the last owner with a vehicle 'death cert'.
Minister Roche was keen to point out that all of this will be done at no cost to the last owner. However, it now appears that new car buyers will instead face an additional cost. "These regulations will result in the development of a national network of facilities offering free take-back of old cars and vans that have reached the end of their useful lives," said Minister Roche.
At present, owners of old vehicles due for scrapping are charged anything between €30 and €100 if they bring their old car to a breaker's yard. The cost rises considerably if the car needs towing.
While the motor industry has embraced the need to recycle and dispose of such vehicles correctly, Cyril McHugh from the motor industry representative body, SIMI, criticised the proposed regulations. "The draft regulation is over bureaucratic and we will be pressing for the removal of the licence fees," he said.
However, a spokesman for the Department of the Environment rejected the claim that the licence fees are a stealth tax: "The proposed licence fees are to cover the local authorities' costs only. "
The spokesman added that while the Department will take into account any submissions made, there is little scope for changes to the draft.
"The motor industry can have input in the form of a submission, but as far as we are concerned, our discussions with SIMI have concluded."
The regulations, which will bring Ireland in line with an EU Directive, will come into force on January 1st, 2007.