Regulation expected before end of 2026
The European Union has moved closer to adopting a new framework governing end-of-life vehicles. Following political agreement, the regulation now awaits formal approval by the European Parliament and the Council of the European Union. Industry representatives expect the legislation to enter into force during the fourth quarter of this year.
Unlike the previous directive, the new framework takes the form of a regulation. As a result, member states must apply the rules directly without national modifications.
Recycled content requirements
A central element of the EU ELV Regulation is the introduction of mandatory recycled plastic content in new vehicles. The regulation establishes a target of 15% recycled plastic within six years and 25% within ten years. In addition, 20% of the recycled plastic content must originate from end-of-life vehicles through closed-loop recycling systems.
The legislation also requires the European Commission to assess the feasibility of introducing recycled content targets for steel, aluminium and critical raw materials. Vehicle manufacturers will have to declare the recycled content incorporated into their products.
A further provision introduces requirements for imported recycled plastics. Material originating outside the European Union must meet standards equivalent to those applied within the bloc. Independent audits of recycling facilities will verify compliance every five years.
Impact on vehicle dismantling and recycling
The regulation strengthens the role of reuse and remanufacturing within the automotive sector. Certain vehicle components must be removed before shredding and recycling to support reuse and remanufacturing activities. However, the requirement does not apply where removal costs are disproportionate.
The legislation also promotes vehicle designs that facilitate easier component removal. At the same time, recyclers will need to adapt to new treatment requirements. Among the measures discussed is the obligation to sort aluminium into four separate grades, which may require additional investment in processing infrastructure.
Expanded role for recyclers
The regulation introduces a new governance framework for extended producer responsibility schemes. For the first time at European level, recyclers will participate as observer members within the administrative structures of producer responsibility organisations.
Industry representatives have long advocated greater recycler involvement in the governance of extended producer responsibility systems. The new provision is expected to provide recyclers with greater input into the development and operation of compliance schemes.
Global implications for supply chains
Participants at the meeting highlighted the broader international implications of the EU ELV Regulation. The automotive sector is undergoing increasing change in areas such as circularity, recycled content, disassembly, traceability and material recovery. Given the global nature of vehicle production, regulatory developments in Europe are expected to influence supply chains beyond the European Union.
In the United States, automotive shredder residue plastics have traditionally been disposed of in landfill due to technical and economic challenges associated with recycling. However, growing demand for recycled plastics could alter market conditions. Industry stakeholders anticipate increased interest in securing both the quantity and quality of recycled material required to meet future regulatory targets.
Research activity relating to plastics recovery from automotive shredder residue has also increased. Current projects include both mechanical and chemical recycling technologies.
Verification and traceability requirements remain a concern for parts of the industry. Stakeholders also noted that similar regulatory approaches are being discussed in other regions, including Mexico.
Debate over green steel methodology
The meeting also examined proposals concerning the classification of green steel. Industry representatives expressed concerns regarding a sliding-scale methodology that could place production routes with significantly different recycled content levels within the same classification category.
According to participants, such an approach risks reducing the distinction between steel produced with high recycled content and steel produced primarily from virgin raw materials. Industry organisations continue to advocate greater recognition of recycled steel as an immediately available pathway for reducing emissions within steel production.
Aluminium export restrictions remain contentious
The discussion further addressed ongoing debate surrounding European aluminium scrap exports. Industry representatives argued that policies designed to retain recycled aluminium within Europe could place downward pressure on material prices and affect recycling economics.
Participants also pointed to recent developments in the plastics sector, where export restrictions have influenced market dynamics. Concerns remain that regulatory measures may create unintended consequences for recycling markets and investment decisions.
As the EU ELV Regulation moves towards implementation, recyclers, vehicle manufacturers and material suppliers across global markets are assessing its potential impact on recycling operations, material flows and future supply chain requirements.
