A new EU regulation on vehicle design and end of life aims to set the automotive sector on a circular path, but does it have what it takes to drive ambition? Stéphane Arditi, Fynn Hauschke and Roberta Arbinolo examine its potential and identify possible roadblocks.
This article is the first in a series analysing different aspects of the new EU Regulation on Vehicle Design and End of Life Management. It was originally published by Auto Recycling World.
Vehicles are among the largest products we use, second only to buildings, and constitute significant repositories of valuable materials. This makes the automotive industry a pivotal player in saving resources and curbing carbon emissions through circular economy practices.
Towards a circular trajectory?
Circularity in the automotive becomes even more important amidst the ongoing electrification of mobility: in August 2023, in the EU, the share of battery electric vehicles in new registrations reached above 20% for the first time.
As a result of this transition, the climate and environmental impacts of vehicles are set to shift significantly, from the use stage to the manufacturing and End-of-Life stages. Not only an environmental necessity, circularity is also a promising strategy to tap into new revenue streams and improve profitability along the value chain, according to the Accenture report ‘Driving Ambitions’.
In this context, the EU Commission’s proposal for a Regulation on Vehicles Design and End of Life Management (VDEoL) comes just at the right time. This new law merges two outdated ones: the End of Life Vehicles Directive and the 3 R Type-Approval Directive. This ambitious endeavor includes the introduction of a whole life cycle perspective, looking at vehicles from design to disposal, across multiple potential owners; an extended scope to cover most of the vehicles placed on the market, beyond the automotive segment; the introduction of requirements regarding reuse of parts, components’ recycled content, better collection and improved treatment at the end of vehicles’ life, improved traceability and stricter conditions for the export of used vehicles; provisions to hold producers accountable through a EU-wide Extended Producer Responsibility (EPR) system.
Roadblocks
Despite the impressive scope of the law, whether it will be enough to steer the automotive industry away from a linear trajectory and towards a circular model within planetary boundaries is still the question. Environmental organisations have highlighted missed opportunities that could act as roadblocks. These include the lack of measures to reduce the demand for new vehicles, too little focus on reuse and repair, missing footprint information, and the limited geographical scope of the proposed EPR scheme.
First, the law fails to address the need to decrease the number of vehicles on the market as well as the overall material use and footprint of the sector. While circular measures improve the lifetime of resources used, the best environmental protection is to reduce the demand on extraction as much as possible. Improved circularity does not automatically equate to supply reduction, but should be complementary. NGOs are therefore advocating for an overall material footprint reduction target for the sector, potentially with possible tradeable certificates between manufacturers placing products on the EU market.
Besides, the current proposal still favours recycling over the preferable strategies of reuse and repair that aim to extend the lifespan of products before recycling. Notably, the End of Life targets still merge reuse and recycling, while specifying an energy recovery rate. However, other sectors have shown that if there is no dedicated reuse target, there is also no clear incentive to reuse before recycling.
Regarding the illegal export of old vehicles, the proposal introduces specific criteria, and tries to limit the export of vehicles that are deemed unsuitable for EU roads due to excessive energy consumption and safety concerns, by making “roadworthiness” a prerequisite for export. However, as the export of roadworthy and reusable vehicles can and will continue to happen, the new law risks creating an unfair double regime for non-EU countries, which will not be covered by the EPR fees. In other words, the EU will delegate the waste management of vehicles exported outside the EU to the receiving countries but keep the fees that were set aside to support that process financially. This puts an unfair burden on the waste management systems of receiving countries outside the EU, which may be less equipped to deal with all waste fractions of a complex product like a vehicle.
Another key measure that is completely missing in the proposal is the disclosure of carbon and environmental footprint information and performance requirements, as included in the Batteries Regulation and considered within the new Ecodesign for Sustainable Products Regulation (ESPR). Even if the text includes some ecodesign aspects, for instance on minimum recycled content for plastics, the failure to require the disclosure of carbon and environmental footprint data is a significant missed opportunity.
Finally, the proposed Circularity Vehicles Passport is a pale equivalent of the Batteries Passport and the Digital Product Passport proposed under the ESPR – the inconsistency of which is hard to grasp. To be truly effective, the Circularity Passport should include the carbon and environmental footprint information mentioned above and declare all Substances of Concern. This information could also be used for different reporting duties, thus reducing the administrative burden on the industry.
Cruising to Success?
All in all, the new EU law on vehicles could mark a significant departure from the current linear approach and steer the automotive sector towards a more circular future. However, the texts continued to be fraught with missed opportunities which, coupled with prolonged delays in many of the key provisions, risk slowing progress down. In fact, too many implementing measures proposed in the text will not be defined and applied before 2030. As a result, while environmental groups applaud the Commission’s proposal, the forthcoming discussions in the legislative process will determine whether it deserves a standing ovation.
