The EU End-of-Life Vehicle Regulation: contents, opportunities, and challenges

In the so-called linear economy, products are manufactured and disposed of after use. This leads to a very high consumption of resources. This in turn contributes to resource scarcity and resource dependency, man-made climate change and fragile supply chains. 

To break through this pattern, we need to transform into a circular economy in which products and materials are kept at the highest possible value level for as long as possible, e.g. through reuse, repair and recycling.

The EU therefore launched the EU Green Deal in 2018 to transform the EU into a more resource-efficient, resource-independent and competitive economy. The circular economy is one of the most important building blocks of the EU Green Deal. 

Alongside many other end-product groups, vehicles are also affected by legislative initiatives in the EU Green Deal. In this interview, Stefan Vellekoop, Manager Circular Solutions at the Otto Krahn Group and Tony Harrison, Senior Director Global Technical Service & Application Development at ALBIS, explain the background and details of the legislative proposal for an End-of-Life Vehicle Regulation, also known as ELV Regulation. They assess its significance for the plastics industry and discuss the opportunities and challenges of the proposals.


Mr. Vellekoop, Mr. Harrison – you approach the proposed ELV Regulation from different perspectives. What is your respective focus?

Stefan Vellekoop: My responsibilities include the coordination of cross-group topics and the monitoring and preparation of legislative proposals in the area of the circular economy. I support the businesses of the Otto Krahn Group in particular also in the context of the proposed ELV Regulation.

Tony Harrison: We at ALBIS are involved in a company-wide working group that has closely examined the proposed legislation and is looking at the potential impact on our product and service portfolio so that we can provide our customers with the best possible support at an early stage.

Stefan Vellekoop: We are also part of a cross-group network of stakeholders who are involved in the Otto Krahn Group's extensive circular economy activities, particularly in relation to the automotive sector.

These activities include participation in industry-wide initiatives and pilot projects, involvement in standardization committees, membership in various industry associations, the identification of new, circular business opportunities and, last but not least, the continuous expansion of the already extensive portfolio of more sustainable and circular products and services.

What is the background and the focus of the proposed ELV Regulation?

Stefan Vellekoop: For many years, there has been an EU End-of-Life Vehicle Directive that focuses on waste disposal, specifically the treatment and disposal of end-of-life vehicles. The aim is to ensure that as few harmful substances as possible enter the environment.

As part of the EU Green Deal and the proposed EU End-of-Life Vehicle Regulation, the focus is to be expanded to a broader circular management of vehicles, their components, and their materials. Additionally, it is intended to convert the current directive into a regulation. This will strengthen the European internal market, as a regulation has the same effect in all member states.

The proposed measures include, for example, a requirement for disposal companies to recycle a proportion of the plastics contained in end-of-life vehicles. In addition, minimum recycled content quotas for plastics are proposed in order to replace new materials in new cars with recyclates. These measures are intended to strengthen recycling as a whole by targeting both the supply and demand side.

Do the proposed requirements only apply to recycling?

Stefan Vellekoop: No, they go beyond the existing regulations on the disposal of end-of-life vehicles and recycling. For example, certain components are to be designed in such a way that they can be easily removed so that they can be reused with little effort. A digital product passport (Circularity Vehicle Passport) should provide information along the entire value chain that simplifies or enables the proposed measures, such as the reuse of components, the recycling of materials, etc.

The proposed measures therefore go beyond the existing regulations on the disposal of end-of-life vehicles and also beyond recycling. The proposed measures are intended to promote the recycling of vehicles, vehicle components and materials. This should reduce the consumption of resources and make it more efficient, thereby reducing emissions of climate-damaging gases and pollutants.

Which measures are particularly relevant for manufacturers of automotive plastic parts?

Tony Harrison: The most important proposed measure for the plastics industry would be the minimum recycled content quota for plastics. Here, 25% of the total mass of thermoplastics and elastomers used (thermosets and tires are excluded) should come from recycled materials. Of this, another 25 %, i.e. a total of 6.25 % of all plastics to be used, should come from recycled materials from end-of-life vehicles, from so-called closed-loop recycling. 

According to the proposal, only recyclates from post-consumer material can be counted towards the minimum recycled content quota, but not recyclates from post-industrial material. Bio-based plastics cannot be counted towards the minimum use quotas either. The specifications relate to the vehicle level (not to component level). 

What would this mean in concrete terms for manufacturers?

Tony Harrison: According to the draft law, car manufacturers would have to describe how they intend to implement the measures with the help of a 'circularity strategy' with regard to a minimum recycled content quota of plastics, dismantling capability of certain components, etc. This 'Circularity Strategy' must be attached to the approval of a new vehicle type.

Automotive suppliers would have to request information from the upstream value chain for the circularity strategy - and also for the digital product passport. This means that they would then need information from their suppliers regarding the materials used.

Should plastics processors already be preparing for the possible changes and what could this look like?

Tony Harrsion: The legislative process is still in its infancy and is currently paused until after the EU elections that took place this weekend. Due to the likely changed composition of the EU Commission and the EU Parliament after the elections, it is currently not possible to predict in which direction the legislative proposal will develop or whether it will be continued at all. 

Overall, however, there is a consensus in the EU to strengthen the circular economy. The EU is also moving in the direction of creating regulatory requirements to ensure that more recyclates are used in products. This has been decided for certain packaging and is to be implemented for various other end-products as part of the Ecodesign Regulation, among other things. 

What is the current status of manufacturers with regard to the use of recyclates?

Tony Harrsion: Irrespective of regulatory developments in the vehicle sector, many car manufacturers are already preparing for the increased use of recycled plastics, as well as working on closed-loop recycling concepts. Recycling and reusing plastics (in all industries) is simply the right thing to do!

Suppliers of plastic parts who are entrusted with development contracts by OEMs can expect corresponding demands. It can take longer for suppliers without development setups. However, it is helpful to have heard about the possible regulatory changes in advance and to be able to assess the topic and its current status – forewarned is forearmed in this case.

Which vehicles are affected by the proposed legislation?

Stefan Vellekoop: Trucks, buses, trailers, two-wheelers, etc. would only be partially affected by the proposed measures, and in different ways. The minimum recycled content quota described above would not apply to the vehicle types mentioned.

Passenger vehicles and light vans, on the other hand, would be affected by the proposed measures across the board. In particular from the minimum recycling rates.
 

What are the timelines for the various measures?

Stefan Vellekoop: The various measures are subject to different deadlines for when they should come into force. 

The minimum recycled content quota for plastics, which would have the greatest impact on plastics processors of all the proposed measures, would come into effect seven years after the regulation is passed, according to the legislative proposal. Due to the lead time in the development of new vehicles, automotive manufacturers are therefore already in the process of dealing with the potential requirements.

What are the challenges in relation to the legislative process?

Stefan Vellekoop: The transformation towards a circular economy is undoubtedly necessary. This also requires appropriate regulation to set the course in the right direction, as the market alone cannot regulate this. This can currently be seen with the price development of recyclates and virgin materials.

Generally speaking, regulation is a difficult tool and can also lead to opposite or undesired consequences. One question here, for example, is how to ensure in a global market that recyclates are made from regional waste instead of using recyclates from other regions of the world without recycling one's own waste? 

Which specific points do you consider to be particularly critical?

Stefan Vellekoop: With regard to the legislative proposal, the 25% minimum recycled content quota for plastics is a challenge, especially as the figure is high and does not include a staggered time scale to allow the market to develop accordingly. At the same time, recycled content quotas are being introduced for other product groups as well, which correspondingly limits the available quantities.

Secondly, only post-consumer material is counted, but not post-industrial material. As a result, there is a risk that this valuable waste stream, which can usually only be processed with higher effort, will be lost as there are no incentives to recycle it.

Another challenge at present is the unclear situation as to how and whether the ambitious proposed requirements will be implemented due to the upcoming EU elections and potentially changing priorities.

Is chemical recycling permitted in the proposed legislation?

Stefan Vellekoop: In the overarching legislation, the term recycling generally includes all recycling technologies. The proposed law also does not discriminate against any technology. However, an attached legal act specifies which mass balance methods may be used. 

Without going into detail here, a specific mass balance method (the fuel-use-exempt method) is necessary for the chemical industry to be able to invest in the upscaling of chemical recycling plants. If this mass balance method is not allowed, investment in chemical recycling will or is likely to be slowed or reduced. 

The process of determining which mass balance method will be allowed is currently taking place within the framework of the Single-Use Plastic Directive.

Thank you very much for the interview.