Green Fees - Auto Recyclers Add Environmental Fee to Invoices

Auto recyclers spend a lot of money to make sure they meet environmental regulations. Now, some of them are getting that money back.

A "green" surcharge has appeared on some Canadian auto recycler invoices. This nominal amount is listed as an environmental fee, and so far has been very successful.

"What's occurred is that a couple of our members have posted signs that describe the things they do to make sure they're protecting the environment," explained Steve Fletcher, executive director of the Ontario Automotive Recyclers Association (OARA.com). "It's become a profit centre and has grown from word of mouth."

Fletcher saw the signs at three member companies in just one week. When he asked the recyclers, they said they expected a bit of "push back." But as it turned out, the additional fee was not even questioned.

"I think it's because we're used to paying fees for services associated with the environment," said Fletcher. "When they change your oil, they charge you a disposal fee. Other companies charge a transportation fee. It's accepted enough that it's not a hard thing to do."

Fletcher acknowledged this is not an OARA program; however, it does tie into OARA's agenda. "It did start as a cost recovery program and it's a successful one," he acknowledged. "But this is also a trend that we like. It reinforces what recyclers are doing for the environment. When you're telling people that we drain fluids, remove mercury switches, and so on, you're letting them know that we're being responsible. That is the basis of our Green Parts marketing program. But of course, we're not doing it out of the goodness of our hearts. We don't want to pollute our property. It also happens to be the law."

Any recyclers can add the surcharge since it's not an official program, according to Fletcher. They just need to post a sign, and then code it into their inventory system. There may be some training involved so employees add it as a line item number.

John Logel, owner of Logel's Auto Parts in Kitchener, Ontario, put the surcharge into effect three years ago.

"We took a close look at what we were being charged by other shops and what it was costing in environmental compliance," he explained. "The body shops and garages have their environmental fees. We implement our fee, with no complaints."

Logel's Auto Parts (Logels.com) charge $2.99 (CAD) for the environmental fee. The average invoice is about $190 (CAD). To date, the environmental fee has mostly been used for retail customers. It's more difficult to use with wholesale accounts, he acknowledged.

"Eventually insurance companies and shops may accept the charge," he said. "Everyone is responsible for the environment in some manner."

"I'm only guessing," said Fletcher, "but I think it would also work in the United States. If the recycler operates a clean facility and it looks like he's taking action, I don't think it would be questioned. As long as the surcharges are kept at a token amount, I think it would be great."

The surcharge is not designed to compensate auto recyclers for their environmental investment. But it does affect the bottom line and gives a positive perception.

by Felicia Lowenstein Niven, UpFront Magazine, Autumn 2009