End-of-Life vehicles - guide
13 July 2023by eub2 -- last modified 13 July 2023
The European Commission proposed on 13 July measures to enhance the circularity of the automotive sector, covering the design, production and end-of-life treatment of vehicles.
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1. Why is the Commission revising the Directives on end-of-life vehicles (ELVs) and reusability, recyclability and recoverability (3RTA)?
Every year, over six million vehicles reach the end of their life and are treated as waste in Europe. Inadequate handling of vehicles at the end of their life creates pollution and costs money. The automotive industry is one of the most resource-intensive sectors.
Recent evaluations showed the need to increase the sustainability of both the production and the end-of-life treatment of vehicles. To reach the EU's climate and resilience objectives, vehicle production must pursue a sustainable and decarbonised path, with reduced dependency on primary resources.
The automotive sector in Europe accounts for 10% of the overall consumption of plastics, translating to 6 million tonnes per year. Additionally, the sector is responsible for a significant share of the demand for steel (17%, around 7 million tonnes per year), aluminium (42% for all transport equipment, around 2 million tonnes per year), and copper (6%, used for automotive parts).
The electrification of vehicles will further increase the need for critical raw materials (CRMs) such as rare earths. Making new vehicles more sustainable and circular is essential to address our dependencies, lower the environmental impact linked to the extraction and processing of primary materials used in vehicles, as well to facilitate the re-use and recycling of vehicles reaching the end of their life.
The current EU rules have resulted in improved collection of ELVs, successfully reduced hazardous substances in vehicles and increased the recycling of ELVs to around 85% of the materials that they contain. Most of these materials are however metal waste which are shredded and not sufficiently sorted and valorised. Only 19% of plastics from ELVs is recycled. Electronics and composite materials are hardly recycled. This is an important untapped potential, both for the environment and the economy. Moreover, too many vehicles are currently not properly collected at the end of their life and many old, non-roadworthy and polluting cars are exported to third countries. Finally, lorries, buses and motorbikes are not covered by existing legislation. This represents a potential source of pollution and substantial loss of resources which are not re-entering the economy and need to be replaced with primary materials with a much higher environmental footprint.
2. What are the key elements that the new Regulation proposes?
The first objective of the revised law is to improve circularity in the design of vehicles, while reinforcing the Single Market. The proposal sets out a series of requirements to ensure that new vehicles are designed in a way that facilitates recycling and re-use of spare parts when they reach the end of their life.
Secondly, the proposal aims to increase the use of recycled materials in new vehicles. New vehicles should include at least 25% of recycled plastics. The proposal also allows the Commission to set targets for recycled steel, CRMs and aluminium, based on appropriate assessment of their added-value and feasibility.
The third objective is to increase the quantity, quality, and value of reused and recycled materials coming from ELVs. To this end, valuable parts and materials should be removed from ELVs before shredding and the treatment of waste should be improved to allow high quality recycling.
The fourth objective is to increase the collection of ELVs to reduce the number of "missing vehicles". This will be achieved by new traceability and control measures. The proposed Regulation also sets out new requirements prohibiting the export of vehicles which are not roadworthy for European roads, to avoid that they generate air pollution or risks to road safety in third countries.
The fifth objective is to ensure a fair allocation of costs of the management of ELVs between economic operators. Producers will have to ensure that their vehicles are properly treated when reaching the end of their life, possibly through the financing of costs for recycling which cannot be covered by recyclers themselves.
Finally, the scope of the current legislation is progressively extended to additional vehicle categories including lorries, buses, and motorcycles.
3. What are the overall environmental and economic impacts of the proposal?
The proposed Regulation is expected to lead to an annual reduction of 12.3 million tons of CO2-eq in 2035, equivalent to €2.8 billion. These savings are due to a better valorisation of 5.4 million tons of materials, in addition to the collection and treatment of 3.8 million additional ELVs. 350 tonnes of rare earths would be separately collected in 2035, rising to 1,500 tons in 2040, contributing to EU strategic autonomy for critical raw materials.
When combining the estimated revenues and the monetised value of the CO2 savings, it is expected that this Regulation would generate 1.8 billion net revenue in 2035.
The total cost of the proposed Regulation on all economic operators and consumers together is estimated at less than €70 per vehicle put on the market in 2035.
4. What will be the impact of the proposed Regulation on the automotive sector and on waste management operators?
In the medium to longer term, the proposed measures will generate energy savings at manufacturing stage, reduce dependency on raw materials for the EU automotive industry, whilst ensuring that the transition to zero emission mobility is sustainable and circular. Limited short-term impacts are primarily related to efforts needed to increase the amounts of recycled plastics and improve the treatment of vehicles at the end of their life as part of extended producer responsibility.
For the waste management sector, the proposed Regulation would create both revenues (increased values in spare parts and recycled materials) and costs (investments in new capacity and technologies). The proposed Regulation is expected to significantly modernise the EU dismantling, shredding and recycling industry, creating jobs and growth across Europe.
5. What will change for consumers and users of the vehicles as a result of the proposed measures?
The measures to boost the market for used spare parts will make these parts more widely available to consumers. These are significantly cheaper than new ones. This will make the maintenance of vehicles more affordable and prolong their service life.
Measures making the design of vehicles more circular (like incorporation of recycled plastics) will lead to a modest increase of prices, estimated to be of less than €40 for a consumer purchasing a new vehicle.
6. What is the expected social impact of the proposal? How will it affect employment in the automotive and other concerned sectors? How will the proposal affect small and medium companies?
This is expected to create 22,100 additional jobs, most of them in SMEs active in the waste management and recycling sector.
SMEs in the dismantling sector face important challenges linked to electric vehicles, notably due to new training and investment needs. The proposed Regulation will encourage a modernisation of these companies, foster innovation to improve sorting, treatment and recycling of waste from end-of-life vehicles, leading to higher quality outputs.
In addition, the measures designed to support the market for used spare parts and the mandatory targets for recycled plastics are expected to boost the competitiveness of dismantlers, as they are the primary suppliers of these parts and of plastic waste destined for recycling. The measures to address "missing vehicles" will also positively impact the dismantling sector, as these will result in an important extra volume of ELVs delivered to authorised treatment facilities. The measures proposed on extended producer responsibility (EPR) will be key to ensure that vehicle manufacturers provide the necessary financial support to dismantlers to maintain their competitiveness and ensure better end-of-life vehicle treatments.
7. Why does the proposed Regulation regulate the export of used vehicles?
The EU is the world's biggest exporter of used vehicles. In 2020, the number of used vehicles exported to third countries amounted to 870,000 vehicles at a value of €3.85 billion. Most cars are exported to Africa, Eastern Europe, Central Asia and the Middle East.
While ELVs are considered hazardous waste and their export from the EU to non-OECD countries is banned, this is not the case for used vehicles that have not formally reached the waste stage.
To address this situation, the proposed Regulation sets up a new model where only roadworthy vehicles - passenger cars, vans, lorries and buses - would be authorised to be exported from the Union. To facilitate implementation, the proposed Regulation also clarifies the definition of end-of-life vehicles and introduces mandatory criteria that would allow to easier distinguish waste vehicles from used ones.
Source: European Commission
