South Africa could lose access to its largest automotive export market unless it introduces regulations aligned with the new European Union (EU) vehicle circularity requirements, the Motor Industry Staff Association (MISA) has warned.
The union said R291 billion in export revenue could be at risk if government fails to introduce an end-of-life vehicle (ELV) framework.
The framework would provide a legal mechanism for vehicles reaching the end of their useful lives to be systematically depolluted, dismantled and recycled.
According to MISA, approximately three quarters of vehicles exported from South Africa are destined for Europe.
The EU is finalising regulations that will introduce requirements covering recycled materials, circular vehicle design and manufacturers’ responsibility across a vehicle’s lifecycle.
MISA warned that failure to align South African regulations with these requirements could create a non-tariff barrier for locally manufactured vehicles entering the European market.
South Africa’s automotive industry contributes about 5.2% to gross domestic product and supports an estimated 500 000 formal jobs across the wider value chain.
MISA has called on the Department of Trade, Industry and Competition (DTIC) to accelerate the development of an ELV framework that protects export market access and domestic employment.
Formalising the recycling industry
MISA Operations Chief Executive Martlé Keyter raised the issue at a recent DTIC stakeholder workshop attended by automotive industry representatives and a delegation from Japan’s Ministry of Economy, Trade and Industry.
She said the framework should provide formal employment, enforceable wage standards, collective bargaining coverage and occupational health and safety protections.
“MISA will not accept a framework that treats workers as an afterthought. Every dismantler, recycler and technician must have safe working conditions, recognised qualifications and career pathways,” Keyter said.
“This is about protecting livelihoods today and building sustainable jobs for tomorrow.”
She said existing workers and informal operators handling vehicle scrap need support to enter the formal recycling industry.
MISA has also called for Japanese technical expertise to assist with worker safety, training systems and the commercial viability of small-scale dismantling businesses.
Japan’s Automobile Recycling Law supports thousands of small enterprises and has helped the country achieve vehicle material recovery rates of close to 99%, according to MISA.
Trade, Industry and Competition Minister Parks Tau has also highlighted the need for an ELV policy as South Africa responds to changing international trade requirements.
Speaking at the Export Symposium and Exhibition in the Eastern Cape last month, Tau said measures such as the EU’s Carbon Border Adjustment Mechanism are increasing pressure on South Africa to adapt its industrial and export strategies.
He said automotive policy decisions have to be taken well in advance because of the sector’s long production and investment lead times.
“There is a need to transform our automotive sector’s current difficulties into opportunity by developing an ELV policy and positioning the Eastern Cape as a leader in the renewable energy space,” Tau said.
