Economic analysis to promote the resource circulation of end-of-life vehicles in Korea

Abstract

This study explores how Korea’s ELV recycling policy can be improved to meet the targeted ELV recycling rate by reviewing the characteristics of the recycling policies adopted in Korea and abroad and conducting an economic analysis of each step of the ELV recycling process, namely, dismantling (including waste gas treatment), shredding, and ASR recycling. The costs and revenues of each ELV treatment process was computed using the data from operators in Korea to estimate their economic feasibility. The findings indicated that, in the case of Korea, dismantling accounted for the largest portion of the ELV recycling process, pointing to the need for policies providing financial support to ELV dismantlers to enhance the overall ELV recycling rate. At the post-dismantling stage, it was found that greater attention to the ELV shredding stage and diversifying the treatment methods for recycled automotive shredder residue (ASR) can be valid measures to reduce Korea’s current reliance on dismantling. However, institutional or financial support will be essential to assist with the initial investment costs for developing ASR treatment technologies and constructing new facilities.