September 18, 2025
European Union authorities advanced a proposed end-of-life vehicles (ELV) regulation, which aims to make the automotive sector more sustainable. The rule would replace the existing ELV Directive with new obligations covering all aspects of a vehicle from its design and placement on the market until its final treatment at the end-of-life.
The proposed ELV regulation marks the latest development in a trend of stricter enforcement for ELVs. Earlier this year, the European Commission—alongside the UK’s Competition and Markets Authority (CMA)—fined a group of vehicle manufacturers and trade associations for operating a cartel related to the recycling of ELVs. The group had agreed amongst themselves not to pay the third-party companies that were responsible for recycling ELVs that automakers are required to offer as a free service for consumers. The entities collectively agreed to fines of approximately €458 million from the Commission and more than £77 million from the CMA.
Key details of the proposal
The Commission’s proposed rule looks to improve automobile circularity. It would require new vehicles to be designed to allow for the easy removal of as many parts and components as possible by authorised treatment facilities for their replacement, reuse, recycling, remanufacturing, or refurbishing.
The regulation would set a mandatory target for recycled plastic, requiring that at least 25% of plastic used to build a vehicle come from recycling. In addition, 25% of that material would need to come from recycled ELVs. The proposed ELV regulation also seeks to recover more and better-quality raw materials, including critical raw materials, plastics, steel, and aluminium, through stricter rules on recycling and reusing, as well as incentives to encourage the sale of spare parts. It leaves a path to set mandatory recycling targets for those raw materials, similar to the goals set for recycled plastic.
As evidenced by the recent enforcement activity, EU authorities have a vested interest in ensuring that manufacturers are complying with rules related to recycling ELVs. They also want to enhance those requirements for the entire vehicle lifecycle.
As such, the Commission proposal would set out rules to ensure proper financing for mandatory ELV treatment operations and to incentivise recyclers to improve quality. It would also require more inspections, interoperability of national vehicle registration systems, and improved distinction of used vehicles from ELVs, as well as a ban on exporting used vehicles that are not roadworthy. These measures are all part of an effort to stop vehicles from going “missing” when they are intended to be recycled.
Notably, the ELV regulation would also cover more vehicles beyond just cars and vans—over time, the requirements would expand to include new categories such as motorcycles, lorries, and buses.
The European Council reached its negotiating position in June, with several changes to expand the scope of the regulation. This includes adding heavy-duty trucks and two- and three-wheel bikes and quadricycles to the scope of the regulation. In addition, the Council recommended a phased approach to the 25% recycled plastic requirement so that it would apply 10 years after the regulation enters into force.
The Council’s other changes focus on decreasing red tape, enhancing documentation to distinguish used vehicles and ELVs, and clarifying obligations around collection and treatment operations.
Looking ahead
The European Parliament reached its negotiating position in early September, which triggered trialogue negotiations amongst the Parliament, Commission, and Council. The Parliament and Council positions are not too far apart, although there will likely be further discussion of the timeframe for the phased approach to the recycled plastic requirement.
Automotive manufacturers, retailers, and suppliers should closely follow the trialogue negotiations to understand what new obligations they may face under the ELV regulation. It is clear that the final regulation will apply to more product categories and that compliance with its requirements will be closely scrutinised. The fact that it will be a regulation, not a directive, also means that the obligations will be the same in every Member State, which should help with compliance. However, it also could mean more surveillance and monitoring by authorities.
The automotive industry should start planning now for how they may need to change their operations to meet additional sustainability requirements and more documentation to prove their compliance throughout the entire vehicle lifecycle.
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