For years, car manufacturers and their association ACEA have run a veritable anti-recycling cartel. As the EU revises the rules for vehicle design and recycling, this scandal proves once again the need for a robust system to hold producers accountable and increase transparency.
This article is adapted from an opinion piece originally published in German by Tagesspiegel. The authors are Fynn Hauschke, Senior Policy Officer for Circular Economy and Waste at the European Environmental Bureau (EEB), and Marieke Hoffmann, Senior Expert for Circular Economy at Deutsche Umwelthilfe (DUH).
In April, the European Commission announced that 15 major car producers and the manufacturers’ association ACEA would be fined a total of €458 million for forming a anti-recycling cartel. According to the Commission, the manufacturers agreed not to remunerate dismantling companies for the recycling of end-of-life vehicles.
Moreover, the manufacturers agreed not to inform the public about the recyclability and the share of recycled material in their products, so that there would be no competition on the market on these crucial sustainability-related design aspects. Such illegal agreements are likely to set back the circular economy in the vehicle sector by many years.
Brussels promises changes
The anti-recycling cartel comes to light at a time when EU legal obligations for vehicle manufacturers are being reorganised. In 2023, the European Commission presented a draft Regulation on Circularity Requirements for Vehicle Design and on Management of End of Life Vehicles, which is intended to revise and merge the existing directives on End-of-Life Vehicles and 3 R Type-Approval. The EU Parliament and Council are currently developing their positions ahead of the final negotiations, expected to kick off in the second half of the year.
The proposal includes legal requirements for the entire life cycle of a vehicle: from circular design to end-of-life treatment. Besides, the planned regulation implements the principle of Extended Producer Responsibility (EPR) in a standardised manner across Europe: an environmental policy approach that holds manufacturers accountable for their products throughout their entire life cycle, including the after-use phase.
Similar legal requirements already exist for packaging, electrical appliances and batteries, and will soon be established for textiles too, under the revised EU Waste Framework Directive.
The recently exposed car recycling cartel and earlier scandals such as Dieselgate show that manufacturers do not hesitate to exploit their powerful position in a criminal manner. It is therefore crucial to set up a robust system for producer responsibility in the vehicle sector within the upcoming vehicle regulation.
No way out through the back door
Under no circumstances should manufacturers be able to keep evading their responsibility through non-binding rules or loopholes. The vehicle regulation must ensure that the recycling industry – characterised by small and medium-sized enterprises – will be adequately compensated for the modern collection and treatment of end-of-life vehicles. This is even more important as recycling costs are likely to rise due to the new requirements in the draft regulation.
Effective implementation of EPR should also include an obligation for manufacturers to participate in a joint take-back system (a so-called Producer Responsibility Organisation, PRO). This would not only facilitate enforcement, but also enable all relevant stakeholders to be involved – manufacturers, recyclers, dismantling companies, and civil society organisations.
This is a demand that the recycling industry also shares. Moreover, it is the prerequisite for important environmental policy instruments that are foreseen in the Commission’s proposal. These include, for instance, higher EPR fees for vehicle models that are particularly harmful to the environment, and lower charges for vehicles that are, for example, less resource draining, recyclable, or contain fewer toxic substances – an approach known as ‘eco-modulation.’
Protecting consumers
The anti-recycling cartel also reveals that manufacturers have little interest in informing consumers about the environmental performance of their products. Against this backdrop, the planned vehicle regulation must set binding requirements for greater transparency. For example, the envisaged digital product passport for vehicles (“Circularity Vehicle Passport”) must be accessible for consumers, and include critical information such as on the environmental footprint, reparability, and the use of recycled materials. This will ensure that consumers can take these criteria into account when making purchasing decisions.
In addition to transparency rules, there must be minimum ecodesign criteria for vehicles, covering aspects like reparability, and the use of recycled materials including steel and plastic. Without such criteria, co-legislators risk allowing manufacturers to profit from withholding relevant environmental information for years, as lower environmental obligations – and notably lower ecodesign requirements – have often been justified with poor data availability.
The EU Commission’s impact assessment and background studies provide robust evidence of the environmental benefits of the policy measures included in the proposal. An ambitious vehicle regulation is therefore necessary, if only to create a level playing field vis a vis manufacturers of packaging and batteries – for both, European product and waste legislations was recently overhauled fundamentally.
