EUROPEAN COMMISSION

Brussels, 13.7.2023

SWD(2023) 256 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

ANNEXES 10 TO 15 to the IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Regulation

of the European Parliament and of the Council on circularity requirements for vehicle design and on management of end-of-life vehicles, amending Regulations (EU) 2018/858 and 2019/1020 and repealing Directives 2000/53/EC and 2005/64/EC

{COM(2023) 451 final} - {SEC(2023) 292 final} - {SWD(2023) 255 final} - {SWD(2023) 257 final}

Contents

Annex 10: Legal Environment

10.1Legal Basis

10.2Articulation with other EU policies and legislations

Annex 11: 3R Type-approval Directive Evaluation report

11.1Introduction

11.1.1    Purpose of the evaluation    

11.1.2    Scope of the evaluation    

11.2What was the expected outcome of the intervention?

11.2.1    Description of the intervention and its objectives    

11.2.2    Point of comparison    

11.3How has the situation evolved over the evaluation period?

11.3.1    Current state of play    

11.3.2    Member State implementation of the 3R Directive    

11.4Evaluation findings (analytical part)

11.4.1    To what extent was the intervention successful and why?    

Internal coherence of the 3R Directive and coherence with the ELV Directive    

Coherence with the Waste Framework Directive and REACH    

Coherence with ISO 22628:2002 and UNECE    

11.4.2    How did the EU intervention make a difference and to whom?    

11.4.3    Is the intervention still relevant?    

11.5What are the conclusions and lessons learned?

11.5.1    Conclusions    

11.5.2    Lessons learnt    

11.6Evaluation matrix

11.7Overview of benefits and costs

Annex 12: Overview Of Projects And Research

12.1Under Horizon 2020 programme:

12.2Under LIFE programme:

12.3Under other programs:

Annex 13: SME test for the preferred option

13.1Step (1) − Identification of affected businesses

13.2Step (2) consultation of SME stakeholders

13.2.1    SMEs views relating to measures to increase the re-use of vehicle parts:    

13.2.2    Recycled content target for plastics    

13.2.3    Material specific recycling targets    

13.2.4    Export related requirements for the used vehicles    

13.3Step (3) assessment of the impact on SMEs

13.3.1    EPR related measures    

13.3.2    Impacts on companies involved in the dismantling and recycling sector:    

13.4Step (4) minimising negative impacts on SMEs

13.4.1    EU-wide measures to mitigate impacts for SMEs    

Annex 14: Impacts of the proposed measures for the automotive industry in the international context

14.1Main findings

14.1.1    Decarbonisation efforts by vehicle manufacturers    

14.1.2    Automotive global supply chain    

14.1.3    Factors for the development of the European automotive industry    

14.2Conclusion

Annex 15: Contribution of the revision of the ELV and 3R Type-approval Directives to the circularity of critical raw materials (CRM)

15.1Relevant information on CRMs in vehicles and relevant components

15.2Expected 2035 and 2040 impacts of the measures for the circularity of the relevant CRMs and other materials contained in the preferred option

15.2.1    Measure 1: Mandatory removal of e-drive motor by authorised treatment facilities:    

15.2.2    Measure 2: Design provisions for e-drive motors:    

15.2.3    Measure 3: Mandatory removal of selected embedded electronic components (EEC) group by authorised treatment facilities:    

15.2.4    Measure 4: Request of information from OEMs on specific CRMs contained in vehicles, and their labelling:    

15.3Suggestions for follow-up review clauses on CRM measures for vehicles

15.4Additional contribution of the potential extension of scope to circularity of CRMs

15.4.1    Evidence on CRM content in lorries, buses and motorcycles:    

15.4.2    Challenges on CRM recovery from the extended scope, including export and miss-management:    

15.4.3    Expected impacts of initial CRM measures for passenger cars in case of the proposed extension to new vehicles (lorries/buses/2-wheelers):    

15.4.4    Additional Expected impacts of the proposed extension the current legislation to new vehicles (lorries/buses/2-wheelers) to the recovery of CRM and the implementation of the CRM Act objectives:    

Annex 10: Legal Environment

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10.1Legal Basis

Discussions on waste from ELVs dating back to the 1970s focussed on the concerns caused by the illegal disposal of hazardous waste and the difficulties to treat plastic waste derived from ELVs. Increasing quantities of plastic waste were found in the Light Shredder Residues (LSR) and, due to its limited compacting characteristics, used a large amount of volume within landfills. Incineration of plastic waste was also challenging as it required pre-treatment operations. The treatment of exhaust gas of waste incinerators was less developed at that time. In addition, other environmental and health risks, such as contamination of the metal scrap with heavy metals, raised public concerns. All these factors determined the primary objective of the ELV Directive, to minimise the impact of ELVs on the environment and to improve the environmental performance of all the economic operators involved in the life-cycle of vehicles, as defined in Article 175 of the Treaty establishing European Community 1 . Article 7(4) of the ELV Directive tasked the Commission to propose an amendment to the type-approval Directive 2 and promote European standards relating to design for dismantling, recoverability and recyclability of vehicles. As a result, Directive 2005/64/EC on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability (3R type-approval Directive) was adopted in 2005 3 . Based on the internal market legal base (Article 95 TEC 4 ), the 3R type-approval Directive constitutes one of the separate directives within the framework of the EU vehicle type-approval system which was originally established by Council Directive 70/156/EEC and which is now covered by the type-approval Regulation (EU) 2018/858 5 . Article 7(4) of Directive 2000/53/EC required that the measures to be adopted have to be incorporated into the vehicle type-approval procedure. It is a basic principle of EU type-approval legislation that Member States do not prohibit, restrict or impede the placing on the market, the registration or the entry into service of vehicles, systems, components or separate technical units that comply with the requirements of EU type-approval. To safeguard a consistency of rules between placing a product on the market and the disposal of that product, a single binding set of EU rules is necessary.

It is therefore necessary that the legislative proposal replacing ELV and 3R type-approval Directives is based on Article 114 of the TFEU, which is the appropriate legal basis for measures that aim to establish or ensure the functioning of the internal market. This is essential as it is designed to set out requirements which govern the placing of vehicles on the EU market. Harmonised rules are necessary to ensure that all goods placed on the EU market comply with similar conditions and that manufacturers can rely on a type approval issued by one Member State for the entire Internal Market. This is line with the overall regulatory framework on type-approval for motor vehicles.

The change compared to the ELV Directive, which was based on the environmental empowerment of Article 175 TEC (Article 192 TFEU) is justified as this proposal also regulates the design aspects of vehicles and the free circulation.

The choice of Article 114 TFEU as a legal basis allows to build environmental-related requirements as the core elements of conditions on the type-approval and thereby the placing on the EU market of vehicles. It follows other examples of legislative proposals tabled by the Commission recently, which also aim at covering in one single instrument sustainability/circularity requirements applying to the whole lifecycle of products, like the proposal for a Batteries Regulation, proposal for a Regulation on Eco-design for Sustainable Products and the proposal for a Regulation on Packaging and Packaging Waste.

10.2Articulation with other EU policies and legislations

The 3R type-approval Directive is the main EU-level instrument dealing with vehicles design for recycling, re-use and recovery, and the ELV Directive regulates the requirements of vehicles end-of life. There are also provisions on vehicles or provisions which are relevant for vehicles in other EU legislation. Table 10.1 below lists and compares specific aspects of the different initiatives, showing their interaction, with the ELV and 3R type-approval revision.

Table 10.1: Comparison of the ELV and 3R type-approval revision with specific aspects of other EU initiatives

Annex 11: 3R Type-approval Directive Evaluation report

EVALUATION of Directive 2005/64/EC on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability (‘3R’ Type-approval Directive)

Contents

Annex 11: 3R Type-approval Directive Evaluation report

11.1Introduction

11.1.1    Purpose of the evaluation    

11.1.2    Scope of the evaluation    

11.2What was the expected outcome of the intervention?

11.2.1    Description of the intervention and its objectives    

11.2.2    Point of comparison    

11.3How has the situation evolved over the evaluation period?

11.3.1    Current state of play    

11.3.2    Member State implementation of the 3R Directive    

11.4Evaluation findings (analytical part)

11.4.1    To what extent was the intervention successful and why?    

Internal coherence of the 3R Directive and coherence with the ELV Directive    

Coherence with the Waste Framework Directive and REACH    

Coherence with ISO 22628:2002 and UNECE    

11.4.2    How did the EU intervention make a difference and to whom?    

11.4.3    Is the intervention still relevant?    

11.5What are the conclusions and lessons learned?

11.5.1    Conclusions    

11.5.2    Lessons learnt    

11.6Evaluation matrix

11.7Overview of benefits and costs

Glossary

11

11.1Introduction

Directive 2005/64/EC on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability 45 (hereinafter, the “3R Directive”) was adopted in 2005. This Directive is part of the EU type-approval framework, which ensures that motor vehicles meet certain safety, environmental, and technical standards before they can be sold and used in the European Union (EU). The framework is based on several pieces of EU legislation that set out the requirements for type approval. The type-approval process is administered by national type-approval authorities and involves the review of technical and test data and the performance of tests to ensure that the vehicles meet the required standards.

The 3R Directive is the main piece of EU legislation linking the design of new vehicles with their reusability, recyclability and recoverability. The main motivation for its adoption was the need to ensure coherence between the type-approval procedures 46 and the obligations contained under the Directive 2000/53/EC on end-of-life vehicles 47 (hereinafter referred to as the “ELV Directive”). The latter contains rules on the collection, treatment and recovery of end-of-life vehicles and their components, as well as restrictions on hazardous substances in new vehicles.

Neither the 3R Directive, nor the ELV Directive have undergone substantial revision since their respective adoptions in 2005 and 2000. Meanwhile, the way type-approval is carried out in the EU has known plenty of changes. The European regulatory framework has been revised to restore the confidence in the type-approval system and to include controls during market surveillance. Regulation (EU) 2018/858 48 has introduced from September 2020 new related EU type-approval rules (better quality and independence of vehicle type-approval and testing authorities, more controls of technical services, more checks on the roads, new EU wide recalls and penalties).

11.1.111.1.1    Purpose of the evaluation

This evaluation is being carried out following the presentation of the European Green Deal 49 in December 2019 as a new growth strategy that will foster the transition to a climate-neutral, resource-efficient and competitive economy. Both the European Green Deal and the new Circular Economy Action Plan 50 contain a commitment to review the legislation on end-of-life vehicles with the aim to “promote more circular business models by linking design issues to end-of-life treatment, consider rules on mandatory recycled content for certain materials, and improve recycling efficiency”. This is in line with the New Industrial Strategy 51 , which promotes continued efforts towards sustainable product design to strengthen the competitiveness of Europe’s industry. The reason for this being that, increasing circularity in the automotive sector can deliver substantial material savings throughout the value chain and production processes, generate extra value and unlock economic opportunities.

To confirm the need for a review of the end-of-life vehicle legislation, an evaluation of the ELV Directive 52 was carried out and published in March 2021. This evaluation also touched upon some of the 3R elements and illustrated that the 3R Directive provides useful information how to demonstrate reusability, recyclability and recoverability. However, some of its provisions were found to be unclear, leaving room for interpretation that could weaken its objectives. In addition, the evaluation of the ELV Directive pointed out that no monitoring mechanism for the implementation of the 3R rates has been put in place by the Member States or the vehicle manufacturers. Lastly, this evaluation raised that the 3R Directive has not appeared to incentivise the transition to a circular economy in the automotive sector. While the latter was not an explicit objective of the Directive, it potentially affects its relevance in today’s context of the new Circular Economy Action Plan.

Although the evaluation of the ELV Directive contains brief conclusions on the functioning of the 3R Directive, no formal evaluation of the latter has so far been carried out. Hence, the purpose of this evaluation of the 3R Directive is to analyse to what extend the Directive has achieved its objectives and has led to environmental improvements. In line with the Better Regulation Guidelines 53 , the evaluation examines five evaluation criteria, namely: the effectiveness, efficiency, coherence, EU added value and relevance. In particular, the evaluation investigates the following:

üEffectiveness: the extent to which the actions defined under the Directive have been implemented and whether this has resulted in achieving the 3R objectives;

üEfficiency: assessing whether the obligations arising from the implementation of the 3R Directive have been implemented in a cost-effective way and if there is a potential for further synergies to strengthen delivery while minimising costs and administrative burden, including impact on SMEs;

üCoherence: assessing coherence of the 3R Directive with the EU wide policy objectives on circular economy, as well as possible inconsistencies and overlaps of the 3R Directive with other related EU legislation;

üEU added value: assessing what has been the added value of the 3R Directive compared to what Member States could have achieved acting alone at national or international level;

üRelevance: assessing whether the issues addressed by the 3R Directive still match current needs and contribute to solutions to issues addressed by wider EU policies on circular economy, climate change, plastics, resource efficiency, raw materials, etc.

Since the adoption of the 3R Directive in 2005, the automotive sector has undergone considerable changes. The ongoing transition to greener, decarbonised mobility represents a further transformation of the business model and manufacturing practices of the sector, notably with the increase in rare earth elements used in electric vehicles, which are mainly imported from China. In addition, the current geo-political landscape and the related supply chain disruptions and corresponding shortages of the early 2020s stress the relevance of moving towards more circularity in the automotive industry through improving recycling efficiency on the one hand and increasing the use of recycled materials in the production of new vehicles on the other hand. In that way, a further circular transition would allow for improved mitigation of price volatility and supply risk.

The Commission decided to follow a back-to-back approach in which the evaluation of the 3R Directive and the joint impact assessment for the revision of both the ELV and the 3R Directive are conducted in parallel as a single process. The findings of the 3R evaluation will be used to provide further reflection on where improvements may be needed at the vehicle design and type-approval stage to further facilitate the transition to a circular automotive industry. Potential issues or pitfalls of the back-to-back approach were identified on a continuous basis. An example of this is the formulation of problems identified and preliminary policy options following the evaluation, which were subsequently targeted in the impact assessment of the joint revision of the ELV and the 3R Directive.

11.1.211.1.2    Scope of the evaluation

This evaluation covers Directive 2005/64/EC on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability and Commission Directive 2009/1/EC amending, for the purposes of its adaptation to technical progress, Directive 2005/64/EC (the 3R Directive).

It should be noted that the current 3R Directive only sets requirements for the light-duty segment –i.e., M1 and N1 vehicles (cars and vans). Today, no similar legislation is in place for the heavy-duty segment, or for L-category vehicles (which include motorcycles). This is consistent with the scope of the ELV Directive, from which the 3R Directive derives.

The evaluation covers the period from the adoption of the 3R Directive in 2005 up until the recent past (2022). Geographically, the evaluation focuses on the achievements of the 3R Directive in the European Union. Hence, the evaluation covers the EU-27 Member States and additionally considers the implementation in former Member State, the United Kingdom. Therefore, this report analyses both the issues deriving from the nature of the legislation itself as well as those deriving from its transposition and implementation in Member States, including monitoring and enforcement.

However, the EU automotive sector is not an isolated sector, since many of the manufacturers and their suppliers selling vehicles on the EU market are global players. These players come in direct contact with other requirements in terms of vehicle design and production on other major market, which will be considered throughout the analysis.

This staff working document is supported by a study on the evaluation of the 3R Directive and the impact assessment for the review of the ELV and the 3R Directive and its effectiveness, which was carried out from August 2020 to December 2022 54 .

The methodology followed for the evaluation of the 3R Directive included a stakeholder consultation and the performance of ten targeted interviews with type-approval stakeholders, followed by targeted consultation through a survey of additional stakeholders (type-approval authorities, technical services, vehicle manufacturers and component suppliers) and a targeted review of the 3R Directive and its linkages to the ELV Directive 55 .

This evaluation of the 3R Directive has several limitations. Firstly, it is difficult to accurately measure the environmental impact of the directive, as this would have required long-term data collection and analysis, both on the design characteristics of new vehicles as they enter the EU market and on their treatment at their end of life. Due to a lack of detailed monitoring requirements in both the 3R and the ELV Directives, such detailed historic data are not available. Second, the impact of the 3R Directive on the automotive industry and the wider economy is difficult to isolate from that of the 3R Directive and from technical progress and general automotive industry trends towards greater sustainability. The costs and benefits of the directive for vehicle manufacturers, consumers, and the environment (and their complex interactions across value chains) were particularly difficult to assess quantitatively.

11.2What was the expected outcome of the intervention?

To minimise the environmental impact of vehicles as they reach their end-of-life stage, vehicle manufacturers should take incorporate waste minimisation into vehicle design considerations. The 3R Directive therefore establishes the link between the design and production stages of certain road vehicles and their end-of-life treatment by setting type-approval requirements for these vehicles regarding their reusability, recyclability and recoverability. It lays down the administrative and technical provisions for the implementation of the minimum rates for the reuse and recovery of end-of-life vehicles set out in Article 7 of the ELV Directive. Vehicles of categories M1 and N1 can only be placed on the European internal market if the manufacturer is able to demonstrate that vehicles are either re-usable, recyclable, or recoverable at least up to the ‘3R rates’ of reusability, recyclability and recoverability set by the 3R Directive.

11.2.111.2.1    Description of the intervention and its objectives 

The evaluation of the ELV Directive describes how discussions on waste from ELVs date back to the 1970s. Back then, the main concerns were the illegal disposal of hazardous waste and the difficulties to treat plastic waste derived from ELVs. Increasing quantities of plastic waste were found in the Light Shredder Residues 56 (LSR) and, due to their limited compacting characteristics, took up a large amount of volume within landfills, while their incineration was challenging as it required pre-treatment operations. 57 In addition, other environmental and health risks, such as contamination of the metal scrap with heavy metals, raised public concerns.

As a response, under the Article 175(1) TEC (current Article 192 TFEU), the ELV Directive was adopted in 2000 to minimise the impact of ELVs on the environment and to improve the environmental performance of all the economic operators involved in the life-cycle of vehicles. To achieve this, the ELV Directive set rules on the collection, treatment and recovery of end-of-life vehicles and their components, as well as restrictions on hazardous substances in new vehicles. These rules include quantified targets (by weight) for the re-use and recycling (85%) of ELVs as well as re-use and recovery (95%) of components from ELVs.

For such targets to be achieved, the ELV Directive requires that vehicles should be designed and manufactured in a way that allows this. The need to incorporate end-of-life measures in the design of new vehicles was first realised in the 1990s. 58 At that time, bilateral agreements were concluded between vehicle manufacturers and Member States – first in France and the Netherlands, later in other Members States – that aimed at setting realistic recycling and recovery targets. Subsequently, the concept of ‘design to be recycled’ was brought into the design criteria of vehicles meant for the EU market by vehicle manufacturers active in research in recycling processing.

To translate the above into binding legal requirements at EU level, the ELV Directive committed to the preparation of an amendment for the European vehicle type-approval legislation in which new vehicle models are tested and granted type-approval to meet a minimum set of regulatory and technical requirements before being placed on the EU market (Article 7(4) of the ELV Directive).

Figure 11.1 gives an overview of how the overarching needs or problems were translated into general and specific objectives for the 3R Directive. These objectives were in turn translated into specific activities at EU level. That way, the 3R Directive aimed at ensuring the dual objectives of (i) ensuring the coherence between the type-approval procedures for new vehicles and the obligations contained in the ELV Directive and (ii) protecting the environment and human health by reducing the final disposal of waste from ELVs while ensuring the proper functioning of the Internal Market. The intervention logic of how the Directive was expected to work can be summarised along two main actions:

Figure 11.1 – Intervention logic of type-approval Directive 2005/64/EC on vehicle reusability, recyclability and recoverability

A.Set administrative and technical provisions for the type-approval of vehicles with a view to ensuring their component parts and materials can be reused, recycled and recovered

The main requirements set in place by the 3R Directive directly translates the targets of the ELV Directive into design requirements for vehicles. In particular, the 3R Directive prescribes that M1 and N1 vehicles (cars and vans) shall be constructed as to be:

-reusable and/or recyclable to a minimum of 85 % by mass, and;

-reusable and/or recoverable to a minimum of 95 % by mass.

To verify this, the 3R Directive includes three main administrative and technical elements. A first element introduced in the 3R Directive is the preliminary assessment of the manufacturer to be carried out by the competent authority before granting any type-approval. Through this assessment, the manufacturers must demonstrate that they manage properly the collection of relevant data received from their suppliers with a view to calculating the recyclability and recoverability rates for any version within a vehicle type to be produced. In this context, the manufacturers should inform the authorities of the strategy they recommend in the field of re-use, recycling and recovery. After the competent authority has completed all necessary checks of the preliminary assessment, it will issue a certificate of compliance to ascertain that the manufacturer satisfies the obligations under the Directive. This certificate is designated ‘Certificate of Compliance with Annex IV to Directive 2005/64/EC’.

Secondly, compliance with the requirements of the Directive shall be verified in accordance with general rules on vehicle type-approval. During the type-approval process, the manufacturers shall demonstrate that the vehicle type has been designed and constructed to meet the above rates. The calculation of these shall be carried out on calculation sheets conform to the standards ISO 22628:2002 59 to be submitted to the type-approval authority or designated technical service. Subsequently, the latter issues a validation of the calculation in the light of the above documentation of the certificate of compliance and should conduct physical controls on vehicle prototypes to verify the information submitted by the manufacturer and its suppliers.

Third, in-line with the commonly applied worst-case approach in vehicle type-approval and for the sake of simplification, detailed calculations are restricted to those vehicles within the type that are expected to constitute the greatest challenge in reusability, recyclability and recoverability – i.e., reference vehicle(s).

B.Set specific provision to ensure that the re-use of component parts does not give rise to safety or environmental hazards

To ensure that road safety and the protection of the environment are not impaired by the re-use of component parts, the 3R Directive contains a list of component parts, which are not allowed to be re-used in the construction of new vehicles ( Table 11.1 ). These parts play a key role in the protection of vehicle occupants and in the general safe use of vehicles making that reusing them in another vehicle after being dismantled from end-of-life vehicles would entail many risks.

Table 11.1 - List of component parts deemed to be non-reusable from Annex V of Directive 2005/64/EC

While separate legislation on safety and environmental vehicle type-approval was already in place 60 , there was not yet any harmonised legislation to ensure that reused component parts continue to offer the same level of performance that is required to obtain type-approval. Component parts such as catalytic converters and exhaust silencers, dismantled from end-of-life vehicles, cannot be guaranteed to offer the required level of environmental protection. In addition, it is extremely difficult to check whether dismantled parts from end-of-life vehicles will meet the durability requirements as provided for in the relevant separate legislation on the Euro standards for vehicle emissions. 61 Similarly, separate legislation was already in place providing test procedures to ensure that component parts such as safety belts and airbags operate safely in the case of accidents. 62 The test procedures entailed resistance tests to traction as well as durability tests on retractors, which can only be performed on prototype parts representative of production parts. Such tests performed on reusable component parts would render them unfit for use.

To adapt 3R to technical progress, the Directive underwent a minor amendment in Commission Directive 2009/1/EC. 63 This amendment was appropriate to ensure that competent authorities can verify –for the purpose of reusability, recyclability and recoverability– the existence of contractual arrangements between the vehicle manufacturer concerned and his suppliers and the communication of arrangements.

11.2.211.2.2    Point of comparison 

The achievements of the 3R Directive will be assessed and compared to a baseline. In this context, the baseline is defined by the date of entry into force of the Directive (2005). Back then, no formal impact assessment of the intervention with an assessment of how the situation would have developed and what could have happened in the absence of the intervention (i.e., counterfactual) was carried out, which limits the possibility to present a comprehensive overview of the original baseline. Nevertheless, the evaluation considers the situation prior to the adoption of the Directive. Considering that the ELV Directive was adopted in 2000, the additional achievements of the 3R Directive over the initial achievements of this closely linked Directive will be assessed to the extent possible.

As indicated above, the ELV Directive committed to the preparation of an amendment to the European vehicle type-approval legislation in which new vehicle models are tested and granted type-approval to meet a minimum set of requirements regarding their reusability, recyclability and recoverability before entering the EU market. Still, the ELV Directive includes some other provisions to improve vehicle design and production in this context.

Firstly, the Directive requires Member States to promote the prevention of waste by encouraging the design and production of new vehicles which take into full account and facilitate the dismantling, reuse and recovery, in particular the recycling, of end-of life vehicles, their components and materials.

Secondly, under the ELV Directive the Member States shall require in each case the relevant economic operators to publish information on the design of vehicles and their components with a view to their recoverability and recyclability.

Although it is highly unlikely that these two provisions – one being an encouragement and the other being an information requirement – would have the same results on the actual reusability, recyclability and recoverability of end-of-life vehicles as the 3R type-approval Directive, the ELV Directive provisions could in principle have led to some improvements in the baseline after 2000. However, the evaluation of the ELV Directive 64 which dived into the specific achievements of the provisions on vehicle design and production, contradicts this assumption. The evaluation found that the provisions in the ELV Directive are insufficiently specific and measurable, while several enforcement problems were also identified for the whole ELV Directive. No information is available which shows that Member States have taken measures in this context. Therefore, we can assume that these provisions had little to no impact on the design and manufacturing of new vehicles making it unlikely that the ELV Directive alone has resulted in new vehicles being easier to dismantle and recycle than they were in 2000.

Some interesting initiatives have been adopted by some car manufacturers, notably to promote the reuse of spare parts, the remanufacturing of components or recycling of materials, as well as the use of recycled materials. These initiatives were taken on a voluntary basis and cannot be traced back to the implementation of the ELV Directive and 3R Directive. This shows that due to business incentives, some improvements in vehicle design for reusability, recyclability and recoverability would most probably still have taken place, even in the absence of the 3R Directive.

Due to a lack of data, this evaluation cannot quantify what share of today’s improvements is a direct result of the 3R Directive distinctly from the share due to the ELV Directive or other business incentives.

11.3How has the situation evolved over the evaluation period?

11.3.111.3.1    Current state of play

The 3R Directive indicates that the preliminary assessment of the manufacturer and the issuing of a certificate of compliance in accordance with the 3R prescriptions shall be carried out by a competent body. The competent body may be a technical service or type-approval authority, provided its competence in this field is properly documented.

Since there are no reporting requirements for Member States on the implementation of the Directive, evaluating the 3R implementation comes with challenges. Still, the new type-approval framework Regulation reinforces the type-approval testing of new cars and vans on the EU market and where tests and investigations show non-compliance, the market surveillance authority of the Member State can decide to demand a recall or, in severe cases, full withdrawal from the market.

For the 3R Directive to contribute to circularity of the automotive sector, vehicle types that are granted a 3R type-approval first need to find their way to the European vehicle fleet before eventually being treated at an Authorised Treatment Facility (ATF) as an end-of-life vehicle. Article 10 of the 3R Directive illustrates that the requirements were to be implemented in type-approval in three distinct stages. These stages are summarised in Table 11.2 . Only from July 2010 on, five years after the adoption of the Directive, were all new cars and vans entering the EU market required to be type-approved in line with the 3R prescriptions. Considering that the service life of vehicles routinely spans twenty years and beyond, the share of vehicles type-approved under the 3R regime in the vehicles that are currently reaching the end-of-life stage is still expected to be limited (with differences across EU Member States).

Table 11.2 – Implementation roadmap of the 3R Directive in type-approval

*Article 7 on the reuse of component parts also applied from this date.

In addition, observations from other type-approval legislation indicate that most vehicle manufacturers are not early implementers of new type-approval requirements. Taking this into account, Figure 11.2 makes a rough visualisation of the share of 3R type-approved vehicles in the current EU vehicle fleet for cars and vans. 65 In 2020, only about 55% of cars and vans in the EU vehicle fleet were expected to be 3R type- approved. To put these developments in the context of ELVs, Figure 11.3 displays the annual number of new registrations of 3R type-approved vehicles against the annual number of vehicles leaving the EU fleet and the share of ELVs in this last number. In every year of the 8-year period, the new vehicle registrations for cars and vans 3R type- approved outweigh the number of vehicles leaving the fleet which confirms the continuous growth in the EU fleet.

Figure 11.2 – Approximation of 3R type-approved vehicles in the EU vehicle fleet for cars and vans between 2011 and 2019, based on: ACEA 66

Figure 11.3 – Annual number of vehicle registrations in comparison to the number of vehicles leaving the EU fleet between 2012 and 2019, based on: ACEA 67 and Eurostat 68

11.3.211.3.2    Member State implementation of the 3R Directive

Many national and Commission reports have been published regarding the implementation of the ELV Directive. However, the progress of the implementation of the 3R Directive has not been documented in the same manner throughout Member States. All Member States transposed the Directive 2005/64/EC within their national deadlines between 2006 and 2007. Subsequently, Directive 2009/1/EC, amending the 3R Directive, was transposed in all Member States between 2009 and 2010. 69 An overview of the national transposition is presented in Table 11.   3 .

Table 11. 3 – Overview of national transposition of 3R Directive and amendment 2009/1/EC 70

To date, no infringements have been recorded in relation to the 3R Directive, which could suggest that Member States are effectively implementing the measures regarding the reusability, recyclability and recoverability of motor vehicles. However, this could also be a direct result of the lacking reporting or monitoring obligations upon Member States in the 3R Directive that hamper its enforcement.

In general, this absence of reporting and monitoring obligations makes it particularly difficult to obtain extensive data regarding the progress of the Directive’s implementation. Moreover, Member States have differing monitoring and market surveillance methods which hampers consistent practice. As an example, the implementation of the 3R Directive in Member State Germany is elaborated further in

Box 11. 1 .

Box 11.1 – German implementation of the 3R Directive

11.4Evaluation findings (analytical part)

This section provides the analysis and the results for the five evaluation criteria of effectiveness, efficiency, relevance, coherence, and EU added value. The findings presented are based on the results from desk research, as well as results obtained through stakeholder consultations.

11.4.111.4.1    To what extent was the intervention successful and why? 

This section provides the analysis and the results for the evaluation criteria of effectiveness, efficiency, and coherence.

11.4.1.1Effectiveness

Effect of 3R Directive on achieving the targets ELV Directive

When assessing the interaction between the ‘3R requirements’ of the 3R Directive and those of the ELV Directive, it is important to note the semantic differences between them: whereas the requirements of the 3R Directive are on recyclability, reusability and recoverability (i.e., on circularity potential of vehicles as evaluated at the design and production stages), ELV Directive 3R requirements are on recycling, reuse and recovery rates (i.e., on effective treatment rates at the end-of-life stage). Moreover, the requirements apply to different actors (3R Directive requirements concern Member States and vehicle manufacturers, whereas the ELV Directive requirements concern the Member States) and at various levels (the 3R Directive operates at the vehicle type level, ant the ELV Directive looks at aggregated annual level for the ‘average vehicle’, i.e., for the flow of end-of-life vehicles, with no recycling rate targets applying specifically to vehicle types or vehicle manufacturers). Therefore, although the nominal values of the 3R rates of both directives are the same (85% for reuse (reusability) and/or recycling (recyclability) and 95% reuse (reusability) and/or recovery (recoverability), the targets have distinct meanings and carry different consequences for authorities and economic operators.

A second point to consider (also more generally when considering the interaction between both Directives, beyond the 3R rates) is that the effect of 3R Directive provisions on ELV Directive targets is mediated by the useful life of vehicle types and the rate at which vehicles reach the end of life: at any given point, the vehicles reaching authorised treatment facilities include vehicles that have been type approved decades ago, vehicles that only very recently entered the market, and everything in between.

A third and last point to consider is that, whereas every Member State in the EU hosts Authorised Treatment Facilities that process end-of-life vehicles, the number of 3R type approvals performed per Member State varies largely. Some Member States have not issued any 3R type approvals since Directive 2005/64/EC came into force (e.g., Latvia, Finland) but do report on type approvals for second stage of N category vehicles. Some Member States perform 3R type approvals regularly (between 6 and 9 annually).

The 3R Directive has remained as part of the EU type-approval framework for motor vehicles through two major overhauls: after two revisions, Directive 70/156/EC on the approximation of the laws of the Member States relating to the type-approval of motor vehicles and their trailers (referred to in the 3R Directive) was repealed by Directive 2007/46/EC, which was in turn repealed by Regulation 2018/858/EU (Figure 11.4).

The changes made in the Regulation on type approval following the amendment prescribed in Annex VI of Directive 2005/64/EC have been maintained throughout the revisions. Therefore, the Regulation on type approval from 2018 further relates to the 3R Directive (step 5 in Figure 11.4). Based on the amendment that 3R Directive, Annex VI stipulates for the general type approval that, if the manufacturer does not meet the requirements of the 3R Directive, no type approval shall be granted.

Figure 11.4 – Timeline of amendments of ELV Directive, 3R Directive and related type-approval legislation. Source: Oeko-Institut.

According to the 3R Directive (recital 2), to facilitate the treatment of vehicles at their end of life, ‘manufacturers should be requested to include [reusability, recyclability and recoverability] at the earliest stages of the development of new vehicles’. This is rephrased in recital 15 of the 3R Directive which states that ‘the objective of this Directive [is] to minimize the impact of end-of-life vehicles on the environment by requiring that vehicles be designed from the conception phase with a view to facilitating reuse, recycling and recovery’. Both recitals point out the importance of the design phase to ensure the effectiveness of the ELV Directive.

The 3R Directive has therefore acted as the link between the vehicle design and production stages and the end-of-life stage by requiring that the design of a vehicle type meets the requirements that ensure that it will not hinder the achievement of the ELV Directive 3R targets that are relevant at the end-of-life stage of a vehicle. It is by virtue of the slow replacement of old vehicles by new vehicles compliant with 3R Directive, and by the gradual arrival of these vehicles at the end-of-life stage, that the flow of end-of-life vehicles being treated at authorised treatment facilities became increasingly more reusable, recyclable and recoverable. This is visible both in the historic and recent data for the attainment of ‘3R rates’ for ELVs by the different EU Member States (Figures 11.5 and 11.6).

Figure 11.5 – Total recovery and reuse rate of end-of-life vehicles (% of weight of vehicles), 2008-2020. Source: Eurostat, 2021. End-of-life vehicle statistics.

Figure 11.6 – Reuse/recovery and reuse/recycling rate for end-of-life vehicles (% of weight of vehicles), 2008-2020. Source: Eurostat, 2021. End-of-life vehicle statistics.

Remaining obstacles in vehicle design

Under the ISO 22628:2002 calculation method, all materials considered to be recyclable (even to a low degree) are fully accounted for compliance with the “reuse and recycling” target. Two limitations are observed here in terms of the 3R type-approval process facilitating recycling by fostering the necessary changes in vehicle design.

For the case of materials for which there are no available recycling capacities in the EU at the time of type approval, the application of the ISO 22628:2002 standard leads to a material being considered recyclable when there are technologies which have been successfully tested, at least on a laboratory scale. The logic behind this is that vehicles have a long service life (it is not rare for vehicle to remain in use for more than 20 years, although a minority of vehicles can have much longer or much shorter lives, e.g., if they are wrecked in an accident) in which it can be expected that a technology at laboratory stage would reach maturity in terms of available recycling capacities. However, it is observed that vehicles that have been type-approved may include materials in substantial amounts that end up being poorly recyclable at end of life.

For materials that can be recycled, the ISO 22628:2002 standard prescribes that the full weight of the material is considered for the calculation of the share of the vehicle that is reused and recycled. Material losses during waste operations are not taken into consideration, even though materials are not recycled at 100% efficiency. In addition, there is no differentiation in this case between high-quality recycling (which generates secondary raw materials that can be used in vehicle manufacture or equivalent uses) and downcycling, such as backfilling or construction filling materials.

Achievements of the 3R Directive in preventing safety and environmental hazards from reuse of components

The ELV Directive (in Art. 7(4)) refers to 3R targets as the only provision for which the type-approval shall be used to ensure the compliance. In addition, Art. 7(5) of ELV Directive states that amendment of Directive 70/156/EEC should also take consideration that the reuse of components does not give rise to safety or environmental hazards. Article 7 of the 3R Directive refers to the list of ‘Component parts deemed to be non-reusable’ specified in its Annex V that cannot count toward recyclability and recoverability rates and that cannot be used in the construction of vehicles covered by type approval legislation. These parts (which include, among others, airbags, electronic control units and sensors, seat belt assemblies, emission after-treatment systems and exhaust silencers) play a key role in the protection of vehicle occupants and in the general safe use of vehicles.

During the stakeholder consultation, upon being asked the question ‘One of the objectives of the 3R Directive is to prevent safety and environmental hazards through restrictions on re-use of certain component parts (e.g., airbags, seat belt assemblies). Has this objective been achieved in your view?’, of the 34 stakeholders that responded, nine agreed that the objective had been met, five did not agree and the rest did not know. There is no evidence that these safety critical parts are reused in the construction of new vehicles. The type-approval framework (beyond the 3R Directive) effectively prevents such reuse because the test procedures for such test components require destructive or durability tests to be performed on several samples.

Reporting and monitoring the achievements of the 3R Directive

The lack of monitoring provisions in the 3R Directive has led to an absence of dedicated monitoring of compliance with the 3R Directive. In any case, because the 3R Directive is incorporated in the type-approval framework, type-approval authorities in each EU Member State are responsible for ensuring that the vehicle types comply with the provisions of the 3R Directive before the type approval can be granted and the type can be placed in the market. It is likely that the relative simplicity and lack of ambiguity of the text of the 3R Directive has facilitated a uniform application of its provisions by type-approval authorities in the different Member States.

Hazardous substance and plastic coding provisions are specifically part of the checks to be performed by the competent body (3R Directive, Annex IV). The legal text states that ‘the competent body shall ensure that the manufacturer has taken the necessary measures’ and that ‘the vehicle manufacturer shall be required to demonstrate’ that compliance is ensured. There are additional explanations as to what is accepted as a necessary measure, e.g., supply chain management and communication with the manufacturer’s staff. It is expected that where the competent body is checking these requirements, they will find the requested information, as the legal text appears clear for this aspect. In both cases, that is point 3.1(f) of Annex IV for the coding and Article 6(2) of the 3R Directive and subsequently article 4.1 and 4.2 of Annex IV for the hazardous substances, there is a reference made to the ELV Directive. These requirements being checked in the preliminary assessment means that they are not checked for each vehicle type to be approved. The 3R Directive, Annex II (‘Information Document for EC vehicle type approval’) does not contain an information request on hazardous substances or material coding. Therefore, documents and data as to how the manufacturer organizes the information flows on hazardous substances and plastic coding in his value chain is being checked every two years with the update of the preliminary assessment. But, for the types approved, there is no indication whether they contain hazardous substances, e.g., where ELV Directive annex II exemptions cover the use of a prohibited substance in a material and/or component part. On the other hand, the masses obtained in the steps of the ISO 22628:2002 standard calculation, i.e., recyclability and recoverability are indicated for each new type to be approved.

One instrument to ensure circularity of vehicles is the ‘strategy for dismantling, reuse of component parts, recycling and recovery of materials’. The manufacturer submits the strategy for dismantling etc. during the preliminary assessment phase (described in Article 6 of the 3R Directive). Although the consultation process confirmed that the strategies of the vehicles manufacturers are checked and approved by type-approval authorities, in practice this strategy does not go beyond commitments to certain strategic goals of the company and is not specific to the vehicles to be type-approved. It can be assumed that this is because there are no explicit requirements as to the content of the strategy, except for that it ‘shall take into account the proven technologies available or in development at the time of the application for a vehicle type approval’. The purpose of the dismantling strategy is not fully clear, and whether its current implementation is relevant to the achievement of the goals of the 3R Directive goals may be questionable.

During the evaluation, it was investigated whether type-approval authorities performed any sort of monitoring of the (actual) achievability of the (potential) 3R targets in the type approval phase at end-of-life; i.e., whether the recyclability, reusability and recoverability (potentials) translated into corresponding effective 3R when the vehicles were disposed of. Most are not performing such monitoring, or even studies that look at this aspect, and only one type-approval service provider taking part in the consultation would occasionally visit authorised treatment facilities to see how dismantling is performed and check how this compares with the data provided by the vehicle manufacturer at type approval. This highlights the need to ‘close the circle’ and bridge information and cooperation gaps between vehicle manufacturers, type-approval authorities and vehicle dismantlers and recyclers.

11.4.1.2Efficiency

Regulatory costs of the 3R Directive, regulatory burden and complexity

When asked the question ‘Since its adoption in 2005, do the economic and environmental benefits achieved by the 3R Directive in your view outweigh the cost of its implementation?’, of a total of 31 participating stakeholders, twenty did not provide an answer, however of those that did, the majority (five stakeholders) considered that benefits are high or that costs are low (three stakeholders) or both (one stakeholder). Only two stakeholders stated that benefits are too low and costs too high and one stakeholder that benefits are too low.

The main costs of the 3R Directive for vehicle manufacturers relate to the provision of the necessary supporting information to justify compliance for each type approval of vehicles under scope. Unlike other aspects covered by type approval (vehicle safety, emissions), the demonstration of compliance does not require the performance of physical tests and is instead performed on a documentary basis. Information is provided in the two steps of the 3R type approval, this is i) the preliminary assessment, and ii) the type approval as such. The requirements as to what data must be provided, are listed in Annex I (Requirements), Annex II (Information Document for EC vehicle type approval), and IV (Preliminary Assessment).

The design of 3R provisions is such that the burden on vehicle manufacturers can be partially mitigated when appropriate. For example, the 3R Directive makes use of the concept of a reference vehicle to avoid the need to conduct repeated detailed calculations under the ISO 22628:2002 process. The selection of a reference vehicle takes account of the version within a type that will constitute the greatest challenge regarding reusability, recyclability and recoverability. The 3R Directive, however, makes clear that all vehicles covered by the type must comply, and that the selection of the reference vehicle should be performed jointly by the manufacturer of the vehicle and the type-approval authority. The exemptions applicable to special purpose vehicles (e.g., motorcaravans, armoured vehicles, ambulances, hearses and others), multi-stage built vehicles belonging to category N1 (provided that the base vehicle complies with the Directive) and vehicles produced in small series have kept the type approval effort proportionate for SMEs. Since the exempted vehicles are still covered by the ELV Directive, this has not measurably hindered the recycling rates at end of life.

In other cases, the information required by the 3R Directive can be reused elsewhere. The preliminary assessment of the manufacturer (according to Article 6(3) of the 3R Directive) requires that the manufacturer prepare a strategy for dismantling, reuse, recycling and recovery 77 . Although the consultation clarified that this strategy and the documents that vehicle manufacturers prepare for the exchange of information using the IDIS platform 78 are not the same, one vehicle manufacturer declared that they provide to IDIS an adapted version of the strategy prepared to comply with Article 6(3) of the 3R Directive. This indicates that the information needed to prepare the 3R strategy is already available in a structured manner within manufacturers.

Compliance with provisions on coding of plastic parts and parts containing hazardous substances are also checked in the preliminary assessment, thus, not per vehicle type, but only whether manufacturers handle data properly and completely over the value chain. This too has a moderating effect on the administrative burden on both vehicle manufacturers and type-approval authorities.

Box 2 – The ELV Directive and the 3R Directive: together or separate?

11.4.1.3Coherence

Internal coherence of the 3R Directive and coherence with the ELV Directive

It could be argued that the 3R Directive was set up as a market oversight instrument to support the ELV Directive (i.e., waste legislation). However, from the interviews and workshop participants, specifically the EU Member State representatives’ workshop, it became clear that the 3R Directive is more often connected to the general type-approval legislation rather than to the ELV Directive, as usually, both are handled in the Member States in ministries of transport or finance. If expected by the regulator that in the future, the 3R Directive is a means to link the design and production of vehicles with their end-of-life stage, and that the 3R Directive shall contribute to the ELV Directive objectives and effectively ensure that vehicles put on the market are more circular, such intention is to be made more explicit in the 3R legal text and to be communicated to stakeholders.

One of the elements that more strongly ensures the internal coherence of the 3R Directive and the coherence of the 3R Directive with the ELV directive is the mirrored ‘3R requirements’ in both Directives 80 . In absence of improvements in the (potential) reusability, recyclability and recoverability of newly type-approved vehicles, it becomes difficult to meet the (effective) recovery, recycling and reuse targets down the line as the vehicles reach their end-of-life stage, although improvements in recycling and end-of-life treatment are also needed to increase those rates (and thereby the circularity of the vehicles in the scope of both directives).

The scopes of ELV Directive and 3R Directive are similar but not identical. Both include M1 vehicles (passenger cars) and N1 vehicles (light-commercial vehicles). The ELV Directive includes three-wheel motor vehicles but excludes motor tricycles, both defined in the type-approval of two- or three-wheel vehicles and quadricycles 81 . In terms of the exemptions, small series and multi-stage built vehicles are exempt from the 3R Directive but not from the ELV Directive. Special purpose vehicles are exempt from the 3R Directive too; however, they are in scope of ELV Directive (although exempt from Art. 7 provisions on the reuse, recycling and recovery rates, so that they do not enter the calculations for the overall 3R rates at end-of-life). There is no evidence that these minor differences in scope have had a detrimental effect on the achievement of the goals of either directive, especially considering how limited the exemptions are in terms of relative share of ELVs.

The questions of the evaluation refer to the future possible requirements and the future legislation to cover the hazardous substance requirements. For the moment, coherence in relation to the substance prohibitions is ensured as far as the legal text of 3R Directive makes a direct reference to ELV Directive Art. 4(2) for the hazardous substances. On the other hand, for the coding of plastic parts, there is no reference to ELV Directive Art. 8(1), but only to Commission Decision 2003/138/EC 82 . Thus, coherence with any changes to ELV Directive Article 8(1), or new part coding standards introduced through other legislation adopted in line with ELV Directive Art. 8 would not be automatically ensured.

The 3R Directive is also seen as coherent with the overall EU type-approval framework, even after the two overhauls that the framework has undergone since the time that the 3R Directive entered into force. Any future modifications to 3R type approvals should at least ensure an update of the legal references (from the old Directive 70/156/EEC to the current Regulation (EU) 2018/858 governing the type approval of and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles). The exemptions of the 3R Directive applicable to certain vehicles (special purpose vehicles, multi-stage built vehicles belonging to category N1 and vehicles produced in small series) are found to be consistent with the normal functioning of the type-approval framework.

Coherence with the Waste Framework Directive and REACH

The various levels of the waste hierarchy are being addressed in a different manner in the 3R Directive. Waste prevention and reuse are not being promoted through the 3R Directive. Also, the 3R Directive does not provide an incentive to improve recyclability with an increasing ambitious level, especially if the 3R targets are being achieved across most of the EU Member States. It is thus likely that the 3R Directive is not effective in ensuring that vehicles placed on the EU market increase in circularity, which would not be fully coherent with the aims of the Waste Framework Directive or with high-level political goals of the European Green Deal. It is estimated that current trends towards greater electrification of the vehicle fleet, or the increased use of new materials for vehicle construction (which, in turn, are motivated by policy initiatives under the European Green Deal) could contribute to make this situation worse.

The key for ensuring that the 3R Directive is effectively addressing substance prohibitions is the direct cross-reference to Art. 4(2) in the ELV Directive. It should be possible to add the direct cross-reference to another legislation, e.g., REACH, if deemed necessary in the future. In the case of merging ELV Directive and 3R Directive and should hazardous substance provisions of the ELV Directive be moved to another legislation, (e.g., REACH), it might be relevant that the (dynamic) reference to the legislation where hazardous substance provisions will be regulated in the future is amended to ensure compliance is checked through the 3R approval process. Alternatively, any legislation addressing prohibitions for vehicles in the future would need to address how compliance is to be ensured or how the future 3R type-approval process works in relation to hazardous substance provisions.

Coherence with ISO 22628:2002 and UNECE

Looking at the wording of the targets, the ELV Directive refers to a reusable and/or recyclable and, secondly to a reusable and/or recoverable target. This is a different wording compared to the outcome of calculations according to the ISO 22628:2002 standard which is a “recyclability rate” and “recoverability rate.” However, these differences in framing, also in relation to reuse, are not perceived to result in any problems in the implementation, except for reuse not playing a role in the ISO calculations, as indicated by stakeholders.

From the formulation of the targets of the 3R Directive, this can only be a potential or hypothetical recyclability and recoverability, since the various masses of materials included in the calculation are ‘considered recyclable for the purpose of the calculation’. In the ISO 22628:2002 standard, recyclability is a yes or no decision, while in practice, different recycling efficiencies are achieved for different materials. Hence, the rates calculated through the ISO 22628:2002 standard do not represent the final shares of what is effectively recycled. But, from how the ELV Directive requirement is formulated, and given that no further discrepancy between the wordings of Art. 7 of the ELV Directive, 3R Directive and ISO 22628:2002 could be identified, it is concluded that the standard is coherent with the objectives of the 3R Directive.

However, a minor point was identified, where coherence between ISO standard and EU legislation (ELV Directive & 3R Directive) was not ensured: In relation to the assessment of dismantled component parts to be considered reusable or recyclable, (a) accessibility, fastening and dismantling technology shall be assessed in relation to the dismantlability, (b) safety and environmental hazards shall be assessed in relation to reuse, and (c) material composition and proven recycling technology shall be assessed in relation to recyclability (requested in step 2 in the ISO calculation). Interviewees were asked how the classification of component parts into reusable parts and recyclable parts is done. One vehicle manufacturer answered that “the reusability of vehicle components is usually possible for all components unless they are explicitly excluded by law, or they are wearing parts. Which vehicle components are reused in practice depends on the requirements over the life of a vehicle. This cannot be foreseen by the vehicle manufacturer.” This suggests that the assessment of dismantled components to be considered reusable or recyclable according to the three criteria mentioned is of no particular importance for manufacturers in the compilation of the 3R type approval.

The stakeholder consultation also addressed the importance of coherence between the 3R Directive and UNECE Regulation No. 133 (used for international type approvals beyond the EU) in the workshop, explaining that it also made the process more efficient for vehicle manufacturers, i.e., as they did not need to perform the type-approval process multiple times for the same vehicle type in different world regions. The evaluation questions asked whether it is ensured that vehicles placed on the market following a type approval under UNECE Regulation No. 133 also comply with the relevant provisions that are required for vehicles that are type approved based on the 3R Directive, and vice versa.

Minor deviations in the criteria for the selection of the worst-case vehicle were found. Another aspect is, that the definition of recovery in the UNECE Regulation No. 133 differs from that included in the 3R Directive and ELV Directive. The latter refers to a list of recovery processes agreed under the Waste Framework Directive. Hence, the definition in ELV Directive is more detailed than the UNECE Regulation No. 133 definition. However, it was neither mentioned by stakeholders nor were there any other indications that pointed out or concluded that this discrepancy between the definitions was problematic. As the 3R Directive has been the main source for the UNECE regulation, and given that there are only slight differences that are not substantial to the objectives and main provisions, it is assumed that the 3R Directive is coherent with the UNECE Regulation No. 133. A stakeholder reported that his company was applying for type approvals under the UNECE regulation.

11.4.211.4.2    How did the EU intervention make a difference and to whom?

11.4.2.1EU added value

The examination of EU added value of the 3R Directive assesses the benefits of developing legislation at EU level, compared to individual action by Member States through the development of their own comparable legislation, or through other combined international efforts, like those of the United Nations Economic Commission for Europe (UNECE). The following analysis is of qualitative nature, having used inputs from stakeholders and previous experience from the type-approval legislation.

When asked ‘In your view, does it make sense to move away from a type-approval Directive on vehicle reusability, recyclability & recoverability to a type-approval regulation on vehicle reusability, recyclability & recoverability?’, 60% of the stakeholders agreed with this thesis. This clear result assumes that the relevant actors acknowledge the added value of regulating 3R on the EU level, by asking for even more EU intervention. As such, the EU should consider expanding its current 3R Directive into a Regulation, while respecting the principle of subsidiarity in accordance with EU law.

The evaluation of ELV Directive already pointed out the advantages of having these issues regulated at EU level, rather than the Member States’ individual national level. Given that the environmental impact of the automotive industry (i.e., pollution, non-recyclable waste, etc.) is affecting all Member States, it was deemed important to prioritise EU legislation supporting the completion of the EU Single Market and to prevent that diverging national regulations emerge.

This is even more so the case for the 3R Directive, considering that the vehicles manufactured in the EU are also sold, transported and disposed of across the Union. Thus, harmonised and coherent regulations concerning the type-approval of vehicles with regard to their reusability, recyclability and recoverability on the EU level are of utter importance for the effective protection of the environment and the functioning of the Single Market.

EU added value of 3R Directive compared to action at national level

During the stakeholder workshop, participants were asked ‘How high do you estimate the added value of having EU harmonised rules for vehicles reusability, recyclability and recoverability, compared to what could have been achieved at merely national level?’ 50% answered that the added value is significantly higher and 38% stated it is somewhat higher. These results underline that stakeholders recognise the need and the advantages of having coherent regulations on the EU level. This is supported by the increased numbers of manufactured vehicles that are made of recoverable, recyclable and/or reusable materials in Member States that are significant actors in the automotive industry (e.g., France, Germany).

The ELV Directive evaluation had also shown previously that the recorded numbers of ELVs across Member States had also increased after the introduction of the ELV Directive, also confirming that EU level regulations in the domain of sustainability of the automotive sector offer a significant added value compared to individual national actions. As already stated, given the cross-border nature of road transport, vehicle manufacturing and air pollution, EU directives in this sector promote the functioning of a sustainable EU internal market.

The development and governing of reusability, recyclability and recoverability standard for the automotive sector at EU level is key to prevent harm to the functioning of the Internal Market. While local or national initiatives could in theory replace EU action, they would also create considerable obstacles for automotive industry to enter national markets, as numerous standards are expected to arise. This shows that national action poses great risks for the internal market.

EU added value of 3R Directive compared to action at international level 

A different approach to action at EU level usually entails action at the international level; i.e., via the UNECE World Forum for Harmonization of Vehicle Regulations. The UNECE intends to establish “global” harmonisation of certain technical regulations, with mutual recognition of type approvals amongst its agreements’ signatories, which include all 27 EU Member States. UNECE regulations are legally binding for its signatories, who must transpose the UNECE provisions to their national legal framework.

In relation to the type-approval of vehicles with regard to their reusability, recyclability and recoverability, the UNECE adopted a very similar regulation to the 3R Directive, namely UNECE Regulation No. 133 (Uniform provisions concerning the approval of motor vehicles with regard to their reusability, recyclability and recoverability), which entered into force in 2014. Therefore, the EU is a driving force behind various measures taken by the UNECE, especially regarding more environmentally friendly and sustainable actions, including established regulations No. 49 and No. 83, which aligned with the EU’s Euro VI and Euro 6. The adoption of a global 3R a few years after the 3R Directive was put in place, confirms the EU’s role as a source of global standards.

During the stakeholder workshop, participants were asked ‘How high do you estimate the added value of having EU harmonised rules for vehicle reusability, recyclability and recoverability, compared to what could have been achieved at merely national level?’ From 34 stakeholders that answered, 30 agreed that the harmonised rules have a higher or somewhat higher added value than national legislation (others did not know). In another instance, participants were asked a question regarding equivalence with UNECE legislation: ‘For the purpose of obtaining an EU Whole Vehicle Type Approval, a certificate in accordance with UNECE Regulation No. 133 is accepted as alternative to the 3R Directive. How important is it to keep such equivalence with UNECE legislation and why?’ The stakeholders that replied to this statement made clear that there is a need to maintain this equivalence with UNECE legislation, mostly because of the global nature of the automotive industry considering the role of export/import of vehicles. They especially mentioned that there are European countries that are signatories to the UNECE without being EU Member States, making harmonised regulations even more important. While the respondents emphasized the importance of continued global harmonisation, many underlined the need for the EU to lead regarding 3R type approval legislation and ‘disregard any negative influences from the UNECE’, which might slow down progress and effectiveness.

As such, it can be assumed that, in the absence of EU level action, (minimum) standards on type-approval of vehicles regarding their reusability, recyclability and recoverability under the auspices of UNECE would only be promoted by like-minded and similarly developed countries (e.g., EU Member States and third countries) promoting similarly advanced requirements. Nonetheless, the level of stringency adopted would most probably be the lowest common denominator necessary to satisfy UNECE contracting parties that would take more time to adopt and implement the established regulations.

11.4.311.4.3    Is the intervention still relevant?

Current relevance of designing vehicles for reusability, recyclability and recoverability

The 3R Directive does not provide an incentive to improve recyclability with an increasing ambitious level, provided the 3R rates are met at type approval (and, albeit indirectly, as long as the 3R targets are being attained across most of the Member States). As for future provisions on circularity, the level of effectiveness will depend on whether the future provisions fine-tune or amend those that are already being covered with lower ambition today, e.g., amendments of the 3R targets or adding new materials to be coded.

As it stands today, the 3R Directive does not sufficiently differentiate between non-recyclable and recyclable materials if technologies are available at the laboratory stage of development and above (i.e., only a low level of development of recycling technologies for the material is required for it to qualify as fully recyclable). In practice, this allows vehicles making use of high volumes of non-recyclable to be placed on the market in some cases, such as carbon-fibre-reinforced plastics (CFRPs) which is increasingly used in vehicles to reduce their weight. For example, BMW placed the first units of the i3 model on the market in 2013, using carbon fibres as a main material for the vehicle body instead of metal to reduce the weight of the vehicle and achieve better efficiency. Based on interviews with waste management operators, capacities for the recycling of this material are still not available for ELV waste management, resulting in a large share of the vehicle weight not being recycled.

Considering that most vehicles sold today do not use CFRPs in significant quantities and yet the 85% reuse and recycling target is not significantly over-achieved, with the trend towards lightweight materials, this could affect the achievability of the 3R targets in the mid-term (as these vehicles are increasingly produced and become progressively more relevant in the ELV waste stream). On the other hand, an increase in use of a non-recyclable material in the vehicle fleet could be sufficient in some cases for recycling capacities to develop over time, having a positive effect on the 3R rates at the end-of-life over time. Should any requirements be introduced in relation to non-recyclables (e.g., obligatory dismantling) it would be beneficial for them to be addressed under 3R Directive to at least ensure that the use and localisation of such materials is communicated to waste operators to ensure the application of appropriate treatment technologies.

Although it has been shown throughout this evaluation that the 3R Directive has been less successful in promoting the reusability of vehicle parts, there is no evidence that the list of parts that are explicitly excluded from reuse has lost relevance.

During the evaluation of the ELV Directive, more than 50% of the consulted stakeholders noted that the increased use of electrified vehicles will increase waste management costs for ELVs. It is thought that dismantling may temporarily become less profitable as costs for storage, equipment, safety (e.g., against fires from lithium-ion batteries) and transportation may increase. The new Regulation on Batteries is expected to improve circularity in the design of batteries of EVs. The articulation with the ELV Directive and the 3R Directive will be important. In addition to the batteries, ELVs from EVs contain very costly components such as electric motors, which may generate income for the dismantlers. Rare earth elements, which are used for permanent magnets in EVs (average weight of 1-2 kg of permanent magnets per electric vehicle), platinum group metals for catalytic converters (77% use share in automotive catalysts) and precious metals from electric and electronic systems in vehicles are also increasingly found in new vehicles. However, dismantlers are not currently experienced with such components and the markets for them is not yet developed.

The circularity challenges associated to the electrification of vehicles is not limited to the end-of-life stage. Compared to the conventional vehicles that were produced at the start of the evaluation period, todays’ vehicles are made up of an increasingly complex mix of materials that includes electronic components and increasing amounts of electronic components that could lower the recyclability of new vehicles as currently evaluated under the 3R Directive, potentially to a point where compliance with 3R rates becomes challenging for new types being brought on the EU market.

Also in the context of the evaluation of the ELV Directive, ATFs referred to the phenomenon of software-locked components or assemblies (e.g., window wiper motors, inverters, navigation systems, and others) which require a proprietary software key to be installed in a new vehicle after removal. This may be an obstacle for reuse as a component removed without the key will not be reusable and the necessary software key does not have to be provided for free. This is understood to particularly affect establishments that work with multiple vehicle models and brands and that do not have contracts with specific OEMs. Vehicle manufacturers on the other side claim that the locks are of importance for the safety of vehicles, anti-theft and data security.

On the other hand, some vehicle manufacturers are already making efforts to introduce more circularity into their products and services. For example, Renault tries to integrate more circularity through using “recycled and recoverable materials” such as recycled textiles in the battery-electric Renault ZOE. They also consider how certain vehicle components could be used for other purposes, such as in the case of second life for batteries. 84 Renault also refers to reconditioning of parts (or remanufacturing) to allow their use when repairing other vehicles. With a look to the future, BMW has set an aim to build a recycled electric car by 2040, referring not only to its composition from recycled materials but also to its being emission free. Whereas BMW states that its new cars are currently made with close to 30% recycled materials, the new circular-based approach should increase this to 50% recycled content 85 .

11.5What are the conclusions and lessons learned?

11.5.111.5.1    Conclusions

To minimise the environmental impact of vehicles as they reach their end-of-life stage, vehicle manufacturers should take incorporate waste minimisation into vehicle design considerations. The 3R Directive lays down administrative and technical rules to ensure that the parts and materials of vehicles under its scope may be reused, recycled and recovered as much as possible. It makes sure that the reused components do not cause any safety or environmental risks.

The 3R Directive therefore establishes the link between the design and production stages of certain road vehicles and their end-of-life treatment by setting type-approval requirements for these vehicles regarding their reusability, recyclability and recoverability. The 3R Directive applies to new models and models already being produced of vehicles belonging to the M1 (passenger cars), and N1 (light commercial vehicles, i.e., vans) categories. The legislation does not apply to special purpose vehicles (such as armoured cars and ambulances), to vehicles produced in multiple stages or vehicles produced in small series.

According to the 3R Directive, new vehicles may only be sold in the EU if they may be reused and/or recycled to a minimum of 85% by mass or reused and/or recovered to a minimum of 95 % by mass. The reusability, recyclability and recoverability rates (the so-called 3R rates) are calculated using a dedicated international standard (ISO 22628:2002 Road Vehicles – Recyclability and recoverability – Calculation method) which provides a simplified methodology for the estimation of the recyclability and recoverability of the vehicle as a whole according to the mass and material composition of its constituent parts. For a material to qualify as recyclable under the ISO 22628:2002 calculation, only a low level of development of existing recycling technology is required. Therefore, the ISO 22628:2002 calculation yields optimistic (potential) recyclability rates, which are difficult to be effectively achieved at the end-of-life stage of the vehicles.

Beyond the 3R rates, the 3R Directive requires manufacturers to have strategies in place to properly manage the reusability, recyclability and recoverability requirements of the legislation. If national authorities consider these strategies satisfactory, the manufacturer receives a certificate of compliance, which is valid for at least two years. This is an additional instrument of the 3R Directive meant to ensure circularity of vehicles. Although the consultation process confirmed that the strategies of the vehicles manufacturers are checked and approved by type-approval authorities, in practice this strategy does not go beyond commitments to certain strategic goals of the company and is not specific to the vehicles to be type-approved. The usefulness of the dismantling strategy, and whether its current implementation effectively contributes to the goals of the 3R and ELV Directives is unclear.

The 3R Directive limits the reuse of certain component parts, such as airbags, seat belts and steering locks since they could present safety and environmental risks. Hazardous substance and plastic coding provisions are specifically part of the checks to be performed by the competent body.

Interaction between the 3R Directive and the ELV Directive

The 3R Directive was adopted with the aim to ensure coherence between the type-approval procedures on one side and the obligations contained under the ELV Directive on the other side. The latter contains rules on the collection, treatment and recovery of end-of-life vehicles and their components, as well as restrictions on hazardous substances in new vehicles which mirror the requirements of the former. Although the nominal values of the 3R rates of both directives are the same (85% for reuse (reusability) and/or recycling (recyclability) and 95% reuse (reusability) and/or recovery (recoverability) and sometimes used interchangeably, the targets have distinct meanings and carry different consequences for authorities and economic operators. Whereas the requirements of the 3R Directive are on reusability, recyclability and recoverability (i.e., on circularity potential of vehicles as evaluated at the design and production stages), ELV Directive 3R requirements are on recycling, reuse and recovery rates (i.e., on effective treatment rates at the end-of-life stage). Moreover, the requirements apply to different actors (3R Directive requirements apply to vehicle manufacturers, ELV Directive requirements apply to Member States) and at various levels (the 3R Directive operates at the vehicle type level, ant the ELV Directive looks at aggregated annual level for the ‘average vehicle’, i.e., for the flow of end-of-life vehicles, with no recycling rate targets applying specifically to vehicle types or vehicle manufacturers).

Effectiveness

The 3R Directive has been effective in ensuring that the recyclability, reusability and recoverability rates of vehicles under its scope mirror the requirements of the ELV Directive on vehicle recycling, reuse and recovery at end of life. Looking at the historic data on achievement of the 3R rates by EU Member States at end-of-life stage, a positive trend is observed throughout the years of application of both Directives, although it is not possible to isolate the effect of the 3R Directive form these data. The increases in recyclability and recoverability as reported (in aggregate manner) at the end-of-life stage came about in a gradual way. This is to be expected, considering that the effect of 3R Directive provisions on ELV Directive targets is mediated by the useful life of vehicle types and the (variable) rate at which vehicles reach the end of life.

Although the 3R Directive has been effective in relation with the 3R Rates at the type approval stage, during the evaluation it became clear that the recyclability, recoverability and reusability have an uneven treatment in the 3R Directive, which focuses mostly on recyclability and does not directly address reusability. This is to a considerable extent driven by the ISO 22628:2002 standard, which does not specify reusability rates individually. On the other hand, the ISO 22628:2002 standard (and, as a result, the 3R Directive) does not distinguish between treatment technologies with a sufficient degree of granularity; if a treatment type falls under the definition of recycling (which covers technologies at the early stage of development, and therefore with low recycling efficiencies) it will be fully counted towards achieving the reuse and recycling target.

Thus, the 3R Directive provides no prioritisation of technologies that achieve higher recycling qualities or that reduce the losses of certain materials. This could give rise to problems at the end-of-life stage for materials for which there are no available recycling capacities in the EU at the time of type approval, although this is mitigated by the fact that vehicles usually have a long service life in which it can be expected that recycling technology and the availability of recycling capacities improves.

The lack of monitoring provisions in the 3R Directive has led to an absence of dedicated monitoring of compliance with the 3R Directive , although this shortcoming was mitigated by the incorporation of 3R Directive is incorporated into the type-approval framework, whereby type-approval authorities in each EU Member State are responsible for ensuring that the vehicle types comply with the provisions of the 3R Directive before the type approval can be granted and the type can be placed in the market, including the provisions on hazardous substances and coding of plastic parts.

Efficiency

The administrative costs for vehicle manufacturers and type-approval authorities are modest compared to other aspects of type approval, such as safety or pollutant emissions. The lack of regulatory development of the 3R Directive would indicate that these costs have remained stable throughout the evaluation period.

The main costs of the 3R Directive for vehicle manufacturers relate to the provision of the necessary supporting information to justify compliance for each type approval of vehicles under scope. In some instances, the compliance costs are mitigated by the design of the 3R Directive (e.g., by using a reference vehicle to limit the number of vehicles for which the 3R rates need to be calculated, or through the exemptions applicable to certain vehicles, or by checking the compliance with provisions on coding of plastic parts and parts containing hazardous substances at the manufacturer level instead of at the vehicle type level).

The compliance costs of the 3R Directive for vehicle manufacturers are expected to be passed to customers in full, with no evidence emerging during the evaluation to suggest that the 3R Directive has resulted in excessive costs for industry, authorities or consumers. At the same time, the evaluation of the effectiveness of the 3R Directive suggests that it has had a positive effect in promoting environmentally friendly design practices in the automotive industry (albeit with limited results in the promotion of reuse). Given the difficulty in precisely quantifying the costs and benefits of both the ELV Directive and the 3R Directive, an in performing an allocation of the qualitative benefits between the two pieces of legislation, the cost-effectiveness of the 3R Directive could not be evaluated in detail, although during the stakeholder consultation shared the view that the 3R Directive had led to environmental advantages at a reasonable cost.

Coherence

The 3R Directive was found to be internally coherent and coherent with the ELV Directive. The mirrored ‘3R requirements’ in both directives are seen as a strong element that ensures the coherence between the two texts. The scopes of the ELV Directive and the 3R Directive are similar but not identical. There is no evidence that these minor differences in scope have had a detrimental effect on the achievement of the goals of either directive, especially considering how limited the exemptions are in terms of relative share of ELVs. The 3R Directive was also found to remain coherent with the type-approval framework even though it is the last directive remaining that is a main legal text of the overall framework (the others being regulations) and despite some legal references needing an update to bring them in line with Regulation (EU) 2018/858.

The evaluation of the 3R Directive did not reveal any major coherence issues with other EU waste legislation (notably the Waste Framework Directive) and with other EU legislation aimed at promoting sustainability, such as REACH. In relation to the Waste Framework Directive, it was found that the various levels of the waste hierarchy are being addressed in a different manner in the 3R Directive, with waste prevention and reuse not being promoted through the 3R Directive. The lesser emphasis on reuse is attributed to the logic of the ISO 22628:2002, which was otherwise found to work coherently within the 3R type approval process. Also, the 3R Directive does not provide an incentive to improve recyclability beyond the current 3R targets, and thereby to increase their circularity. This situation would not be fully coherent with the aims of the Waste Framework Directive or with high-level policy goals of the European Green Deal.

Finally, the 3R Directive and UNECE Regulation No. 133 (used for international 3R type approvals of beyond the EU), were found to be fully coherent, as a consequence of the latter being based on the former. It was found that changes in 3R legislation in the EU would necessitate changes at the UNECE level to preserve coherence and ensure a high level of harmonisation that is highly valued by the automotive industry.

EU added value

The 3R Directive is deemed to have created EU added value throughout the years it has been in force, with positive impacts in the automotive sector and in the completion of the EU Single Market. These impacts were, however, only possible to be evaluated in a qualitative manner, and without being disentangled from the positive impacts brought about by the ELV Directive. Considering that the vehicles manufactured in the EU are also sold, transported and disposed of across the internal borders of the Union and beyond, the EU added value of the 3R Directive (and, by extension, of the type-approval framework) is particularly clear, and this was recognised by stakeholders. A clear further indication of the EU added value of the 3R Directive is the fact that it was successfully turned (with only very minor adaptations) into an international UNECE Regulation supporting global harmonisation of type approvals, further cementing the EU’s regulatory leadership in this domain.

Relevance

The relevance of the 3R Directive will be tested by the ongoing transformation of the automotive industry. This is especially true of the increase of vehicles with electrified powertrains on EU roads will pose challenges at their end-of-life. Compared to their conventional counterparts from about two decades ago, today’s electric vehicles contain an increasingly complex mix of materials that includes electronic components and increasing amounts of electronic components that lower the recyclability of new vehicles as currently evaluated under the 3R Directive. The use of materials such as CFRPs may see a further increase, driven by the pursuit of lower vehicle weight and greater energy efficiency. In some cases, parts may be software-locked by the vehicle manufacturer for security reasons, which further limits reuse. Should these trends continue, a decreasing level of recyclability could make type approval increasingly difficult to achieve.

Challenges associated to electrification and broader industry trends affecting the design of new vehicles will become apparent also at the end-of-life stage. For example, electric vehicle batteries are singularly difficult to recycle, and there are potential safety risks associated with their removal from end-of-life vehicles disposal, and recycling infrastructure is at present limited. Whereas this may not pose an immediate problem (electric vehicles do not yet dominate new registrations, and they are still a small share of overall ELVs), the importance of these issues will grow as more electrified vehicles reach the end-of-life stage.

There are also positive signs that point towards increased sustainability and circular thinking, even in absence of regulatory intervention: many vehicle manufacturers are already making efforts to increase the circularity of products by applying novel design solutions and standardisation of materials or exploring modular solutions to component design that facilitate disassembly and increase vehicle repairability. Other manufacturers are increasingly becoming involved in directly managing the end-of-life phase of their products and closing material loops. Electric vehicle batteries and other electric powertrain components such as permanent magnets from electric motors could be a source of valuable critical raw materials upon recycling.

11.5.211.5.2    Lessons learnt

The evaluation of the 3R Directive confirmed that it has been, and remains, a useful piece of legislation whose role cannot be understood without putting it in context with the objectives of the ELV Directive and the functioning of the EU type approval framework, whereby EU Member State authorities national authorities certify that a vehicle type meets all EU safety, environmental and conformity of production requirements before authorising it to be placed on the EU market, and ensure that the relevant requirements continue to be met thereafter through market surveillance activities.

By acting at the design and production stages of the life of vehicles as products, the 3R Directive has supported a broad achievement of the goals of the ELV Directive (especially increasing the recycling and recovery of vehicles at the end-of-life stage, and limiting the use of certain hazardous substances in new vehicles).

The fact that the effect of reusability, recyclability and recoverability measures applied at the design stage of vehicles can only be translated into effective gains in reuse, recycling and recovery once the vehicles reach their end of life in significant numbers (usually with decades-long delays) complicates the evaluation of the 3R Directive, especially in terms of effectiveness. It appears, however, that the design costs to make new vehicle types compliant with 3R rates have remained reasonable throughout the evaluation period, and a tangible increase in the 3R rates at the end-of-life stage is apparent across Member States if one adopts a long-term perspective.

Although it can be concluded from the evidence supporting the evaluation that the 3R Directive has been an effective piece of legislation with clear EU added value, and that it has worked in a coherent manner with related pieces of EU legislation (including the type-approval framework itself, and the UNECE regulation that was developed from it), there were several shortcomings in its implementation. First, it was clear from the evaluation that the focus of the 3R rates calculation method supported by the ISO 22628:2002 standard was on recyclability and recoverability, with a lesser emphasis on reusability. Second, the lack of granularity of the ISO 22628:2002 to qualify the recyclability of materials may have resulted in a lack of support for more efficient recycling technologies. And third, the lack of inclusion of additional circularity aspects (notably, recycled content provisions) and of mechanisms to monitor and reward over-compliance with 3R rates may have resulted in lower overall circularity improvements that could have benefited both the automotive and the recycling industries. The exclusion of heavy-duty vehicles and L-category from the scope of the 3R Directive is consistent with the scope of the ELV Directive, from which the 3R Directive derives. If the scope of ELV is expanded to these vehicles in the future, a consistent expansion of the scope should apply to 3R type-approval legislation.

On the other hand, industry-led initiatives (e.g., the establishment of dismantling information databases, or the voluntary circularity commitments made by several ‘front-runner’ vehicle manufacturers) indicate that the EU automotive industry is ready to respond proactively to environmental challenges despite an uncertain context of rapid transformations, including a dramatic shift toward electrified powertrains in new passenger cars. Any review of the 3R Directive will need to account for this, and adapt the existing framework to ensure it supports further improvements in circularity and increased collaboration between vehicle manufacturers, recyclers and EU and Member State authorities.

11.6Evaluation matrix 

Table 11.4 – Evaluation matrix: Effectiveness

Table 11.5– Evaluation matrix: Efficiency

Table 11.6 – Evaluation matrix: Coherence

Table 11.7 – Evaluation matrix: EU added value

Table 11.8 – Evaluation matrix: Relevance

11.7Overview of benefits and costs 

Table 11.1. Overview of benefits and costs identified in the evaluation

Annex 12: Overview Of Projects And Research

Since 2000, under the Horizon 2020 and LIFE, the EU has funded around 100 of different projects which have contributed to higher scale of knowledge, expertise in advancement of relevant ELV treatment operations, material recovery, reduced use of rare earth materials and manufacturing/recycling costs. The subsections below provide the overview of the key ongoing and completed projects and research in the field.

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12.1Under Horizon 2020 programme:

1.Circular Process for Eco-Designed Bulky Products and Internal Car Parts (2017-2021)

ECOBULK 92 aims at demonstrating and implementing a new Circular Economy model for bulky composite products in automotive, furniture and building component industrial sectors, with high potential of cross-sectoral replicability and transferability to other industrial sectors, to promote greater re-use, upgrade, refurbishment and recycling of these products. ECOBULK is a large-scale demonstration project that develops different pilot activities and demonstrations at different levels. The initial planning for manufacturing, demonstration and validation of the newly designed circular products have already started in ECOBULK by generating a master plan for the demonstration activities. This preliminary demo plans total 7 EU-countries, 11 demonstrators and in 21 individual demonstrations all over the Europe during years 2019-2021 within the three product sectors automotive, furniture (indoor/outdoor) and building and construction.

2.Removing hazardous substances to increase recycling rates of WEEE, ELV and CDW plastics (2019-2022)

The EU-funded NONTOX project 93 targets two waste streams: end-of-life vehicles (ELV) and construction and demolition waste (CDW). It will develop technologies to remove hazardous substances from these two waste streams. The project investigates the thermochemical conversion of non-target plastics and side streams to increase system efficiency by increasing the range of final products and applications. The project aims to develop an economically competitive recycling process that can produce safe and high-quality secondary plastic materials from contaminated plastic waste.

3.New industrial sorting systems based on laser spectroscopy (LIBS), magnetic induction, and machine vision for recycling of non-ferrous metals (2014)

SMEs and research organisations in the EU-funded SHREDDERSORT project 94 have developed and demonstrated a new industrial sorting system to separate non-ferrous shredder scrap into cast aluminium (Al), wrought Al, and non-Al categories. Compared to the unsorted material, the sorted categories are better suited for recycling into secondary metals, have a higher market value, and will reduce the use of raw materials.

4.Controlled Closed Loop Recycling for Life-Cycle Optimised Industrial Production (2005-2007)

The Conclore project 95 aimed to develop a viable, low-emission system for manufacturing 100 %-recyclable single-component car interior products. Materials can be recovered at the end of the vehicle's useful life and be recycled into another product — in any sector. By focusing on modifications to the production of automotive parts, the concept involved reintegration of recycled polymer material with quality equal to that of virgin material.

5.Automotive Residue Valorization (2016)

The AUTOREVAL project 96 aimed at the total elimination of landfill disposal, as regards car-fluff, with the related environmental impact and transportation costs. In the context of this project a new kind of innovative industrial plant was to be developed, which should be able to process and convert ASR (Automotive Shredder Residue or car fluff) and ELT (End of Life Tyres) rubber, into fuel products, reducing the environmental impact and making more efficient the entire automotive sector. In this way, materials transformed into fuels will be used as energy source by the players of the sector, contributing in this way to the development of a circular economy that embraces the whole vehicles life.

6.Advanced Reluctance Motors for Electric Vehicle Applications (2016)

To enable a large scale adoption of EVs, a new generation of electric drive systems is needed to reduce dependency on rare earth materials, while improving energy efficiency, power density and reducing manufacturing/recycling costs. The ARMEVA 97 project developed a new rare-earth-free generation of advanced reluctance motors.

7.Robust recycling technology that separates different plastic types from a mix of plastic waste to produce a plastic material directly marketable to manufacturers (2017-2018)

The technology developed within the TRIBOSORT project 98 allows to 1) recycle all ultimate scrap residues from ELV and WEEE, 2) separate its valuable plastic components with a purity of 95% minimum, 3) provide an industrial scale solution with a production capacity of 1.5t/h 4) produce a final recycled plastic material directly marketable to manufacturers, 5) provide a Recycle certificate along with our final products.

8.X-ray sensor for the recognition of polymer type, additive and fillers in black and coloured plastics for recycling and analysis (2019-2020)

The black plastics, which represent 30-50% of plastic scraps in Waste Electric and Electronic Equipment (WEEE) and End-of-Life Vehicles (ELV), end up as residue and are disposed in landfills, buried or exported outside EU, because the existing plastic sorting technologies are not able to sort black plastics based on the type of polymer and to identify the presence of additives such as Brominated Flame Retardants (BFR) and pollutants which are forbidden by EU directives on recycling. The SELEX project 99 exploits for the first time a combination of X-ray solutions allowing: 1) to discriminate polymers used in the plastic matrix both for coloured and black plastics; 2) to provide quantitative information about presence of fillers, additives and pollutants present in the polymer matrix, including BFR.

9.Supporting the Electric Vehicle REVOLUTION through maximising EV Range and End-of-Life Vehicle Recovery through optimisation of recycled plastics and advanced light materials (2021-2023)

The REVOLUTION project 100 aims at overcoming the challenges hindering the use of recycled materials, but more broadly, restricting the widespread adoption of circular economy principles in the automotive industry. REVOLUTION will use machine learning and artificial intelligence to optimise the input of recycled materials and injection moulding process to deliver high-quality parts.

10.Advanced Light materials for sustainable Electrical Vehicles by Integration of eco-design and circular economy Strategies

The LEVIS 101 project developed multi-material structural parts using thermoplastic-based carbon fibre reinforced plastics/metal hybrid materials integrated with a structural health monitoring system. The aim was to achieve a significant weight reduction while keeping the mechanical in-service performance of the targeted parts. As such, new sustainable materials and suitable manufacturing and assembly procedures as well as advanced simulation methodologies/workflows and innovative sensing/monitoring technologies were developed.

11.Leading the TRansion of the European Automotive SUpply chain towards a circulaR futurE (2021-2024)

The fact that the car industry has little involvement in CRM recovery from end-of-life vehicles (ELVs) led to the development of the idea of the TREASURE project 102 . The TREASURE project will develop a scenario analysis and simulation tool to assess the positive and negative implications of circular economy practices and principles in car manufacturing to facilitate the adoption of CRM recovery and circular economy in this sector.

12.Advanced and sustainable recycling processes and value chains for plastic-based multi-materials (2018-2022)

The MultiCycle project aimed 103 to introduce an advanced and sustainable recycling process as well as the value chains for plastic-based multi-materials. This process will be demonstrated in fibre reinforced thermoplastic composites for the automotive sector from which plastics constitute around 16% of End-of-Life Vehicles weight, i.e. ca. 1 million tons/year in EU.

13.Optimising quality of information in Raw Materials data collection across Europe (2017-2019)

The ORAMA project 104 focuses on optimising data collection for primary and secondary raw materials in Member States. For End-of-Life Vehicles the focus is on developing ‘INSPIRE-alike’ protocols. ORAMA will demonstrate how to create more robust Material Systems Analysis studies and reliable Sankey diagrams for stocks and flows of specific raw materials.

12.2Under LIFE programme:

1.A novel and efficient sorting process for post-shredder ELVs to meet and overcome ELV directive targets (2014-2017)

The LIFE CARWASTE project 105 aims to contribute to the effective life-cycle management of cars through an innovative process to exploit currently landfilled waste material produced at end-of-life. More specifically, it plans to develop and demonstrate an innovative technology and process to facilitate the re-use of ‘fluff’ materials in cement and steel plants.

2.Aim to realise 95% ELV-recycling in the Netherlands by means of post shredder technology (2011-2015)

The PST project's 106 main objective was to reach an ELV recycling rate of 95% by the end of 2014 and thus allow the Netherlands to comply with the ELV Directive. It planned to do this by demonstrating and optimising a PST plant using the VW-SiCon process in the Dutch province of Gelderland. The PST project beneficiary ARN Recycling reported an End-of-Life Vehicles (ELV) recycling rate of 83.7% for material recycling and a total of 96.1% for recycling and energy recovery for 2012; and 86.1% and 96.0%, respectively, for 2014.

3.Industrial Platform Demonstrator to achieve 95% recycling of the "end-of-life vehicle" (2011-2015)

The objective of the LIFE project ICARRE 95 107 was to demonstrate how to recycle 95% of End-of-Life Vehicles (ELVs) at a regional scale (up to 30 000 ELVs per year) and to create a model that can be applied and exported to other sites and countries in France and Europe. To reach its objective, the project concentrated its efforts on plastics, foams, glass, textiles and catalytic converters. The project aimed to outline an effective process for dismantling recovered car and to develop a cradle-to-cradle process for recycling the targeted components.

4.High performance devulcanized masterbatches for End-of-Life Tire reuse in high-volume technical compounding applications (2020-2024)

The LIFE GREEN VULCAN project 108 aims at increasing the reuse rate of rubber waste with an innovative and environmentally-friendly devulcanisation technology. The project contributes to the implementation of the End-of-Life Vehicles Directive by enabling increased recycling rates.

5.ELV DEPOLLUTION BAY -equipped island for the management of materials and components for end of life vehicles (2017-2019)

The main objective of the LIFE De-BAY 109 project was to lower the environmental impact of ELVs by developing more efficient recovery systems and techniques for small and medium-sized dismantlers. This technology would be validated and demonstrated within fully-equipped and integrated depollution islands at two pilot dismantling sites. The aim was to enable the recovery of larger amounts of vehicle materials and components (e.g. plastics, glass and filters) and up to 99% of all ELV fluids by weight, in a much faster and more efficient way than is possible using current tools and systems. The main environmental benefits demonstrated by the project were the increased/improved recovery of spent fuels and other fluids from ELVs, and the reduction of hazardous materials and not-recoverable wastes sent to landfills. On a yearly basis, for example: +50 000 l/year more petrol recovered, +12 000 l/year engine oil, +5 000 l/year brake fluids, and +1 700 kg/year air conditioning refrigerants.

6.Recycling of textile fibres from end-of-life tyres for production of new asphalts and plastic compounds (2015-2018)

The project REFIBRE-LIFE 110 aimed to overcome the two main existing barriers limiting ELT fibre recycling. Its overall objective was that 100% of the ELT fibre material is transformed into a useful secondary raw material within a ‘circular economy’ approach. The project’s objectives were, among others, to construct and validate an innovative industrial pilot plant to treat, clean and process ELT fibres, making them recyclable and re-usable and produce new materials (plastic compounds and asphalts) that have been modified with the fibre.

7.Boosting circular economy of plastics from end-of-life vehicles through recycling into high added-value applications(2018-2022)

The LIFE CIRC-ELV project 111 aims to boost plastic recycling rates in the automotive sector by recycling polypropylene in end-of-life cars and reusing it in new products. Substituting virgin plastics with the recycled kind would contribute to the EU circular economy package. It would also support the Waste Framework Directive and ELV Directive by closing the manufacturing loop for plastics used in car manufacturing and tackle the depletion of fossil resources from which they are currently derived.

8.Low energy chemo-thermal recycling of carbon fibre composites, a central step to a circular economy for CFRP products (2022-2025)

The current manufacturing methods for CFRP parts produce large quantities of scrap. This material is made up of in-production scrap, end-of-life components (e.g. automotive parts, aircraft wings, wind turbine blades, sporting and consumer goods) and full-scale test articles. The LIFE CFCycle project 112 aims to implement and evaluate a low-energy approach for recycling carbon fibre reinforced polymers (rCF). This will be achieved by a low-temperature and low-pressure chemical recycling process known as chemolysis. The objective is to recycle at least 2 000 tonnes CFRP scrap per year from automotive parts, aircraft wings and wind turbo blade to establish a supply chain for CFRP scrap and to demonstrate the suitability of the recycled material in at least three applications. The project contributes to the implementation of the End-of-Life Vehicle (ELV) Directive, which requires that 85% of each vehicle manufactured after January 2015 must be re-used or recovered.

12.3Under other programs:

1.Selective recovery of non-ferrous metal automotive shredder by combined electromagnetic tensor spectroscopy and laser-induced plasma spectroscopy (2014-2016)

The SHREDDERSORT project 113 aims at developing a new dry sorting technology for non-ferrous automotive shredder. First, shredder will be separated into different metals, based on their conductivity. To this end, a new electromagnetic sensing technique combined with a vision system will be used.

2.Future Availability of Secondary Raw Materials (2022-2026)

The FutuRaM project 114 will address, among others, the waste stream of End-of-Life Vehicles. It seeks to (1) develop knowledge on the availability and recoverability of secondary raw materials (SRMs) within the European Union (EU), with a special focus on critical raw materials (CRMs), to enable fact-based decision making for their exploitation in the EU and third countries, and (2) disseminate this information via a systematic and transparent Secondary Raw Materials Knowledge Base (SRM-KB).

Annex 13: SME test for the preferred option

As indicated in Annex 4 of this impact assessment, the preferred option would impact large companies involved in the manufacturing of vehicles as well as the steel and plastics industries. As it would also impact SMEs, this Annex provides an analysis (based on the methodology for “SME test” laid out in the Commission Better Regulation Guidelines 115 ), on:

1.the types of SMEs affected by the measures contained in the preferred option;

2.how they have been consulted in the development of this impact assessment;

3.what the expected impacts on these SMEs are;

4.how possible negative impacts on these SMEs have been minimised.

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13.1Step (1) − Identification of affected businesses 116  

The categories of SMEs affected by the proposed measures have been identified based on their activities (dismantling; shredding/recycling; repair and garage shops; export of used vehicles).

·Dismantlers: there are approximately 12 000 “authorised treatment facilities” (ATFs) in the EU, which are on the frontline for the dismantling of ELVs. Most of them are SMEs. Some others are integrated in larger companies which also carry out shredding activities. A number of them also have contractual links with vehicle manufacturers, while others are completely independent. They receive ELVs from their last owners, carry out their depollution and remove the most valuable parts and components. They make most of their business in the commercialisation of these parts removed (to be reused) and the sale of depolluted ELVs to shredders. Many of them also deal with used vehicles that they purchase and sell inside or outside the EU. They are directly affected by the provisions of the ELV Directive on collection, treatment and depollution, as well as on recycling/re-use and recovery targets. While they have to abide by the EU requirements, they face competition (both to receive ELV but also when selling spare parts) from the informal sector which collect ELVs and dismantle them in less environmentally sound manner (and without an authorisation to do so).

·Shredding/recycling companies: there are a few hundred 117  companies in the EU active in the sorting, shredding and processing of ELVs and waste fractions resulting from ELVs. Some of them are linked to large waste management companies while others are SMEs. They buy depolluted ELVs from ATFs, shred them, sort the resulting waste, sell the resulting sorted and shredded materials to industries using secondary materials as feedstock in their production processes, and send residual waste to landfills or for incineration with energy recovery. Such companies are not evenly equipped with modern technologies, some of them having invested in “post-shredding technologies” allowing to better sort and decontaminate materials mixed during the shredding process, while others rely on more basic technology. They have traditionally been focusing on the commercialisation of ferrous and non-ferrous scrap, which are by far the most profitable waste fractions from ELVs. A large share of this metal scrap is exported outside the EU. Some shredding companies have however been investing in plastics recycling and in improved technologies for metal recovery and have called for the establishment of recycled content obligations for these materials in new vehicles to support their activities.

·Repair shops and garages: The sector of the maintenance and repair of motor vehicles in the EU is composed of around 450 000 companies which are mostly micro SMEs with fewer than 10 employees 118 . They would be mainly affected by measures impacting the purchase and selling of used parts and components. They are indeed important actors in the market of spare parts: this is the case both for new spare parts, which they buy from vehicle manufacturers or spare part suppliers, and used spare parts stemming from ATFs or other garages. Measures dedicated to support reuse of remanufactured and used parts would enlarge the supply of used parts to these stakeholders, but could also generate additional burden for them compared to the baseline scenario, especially if the measures imply obligations.

·Companies involved in the export of used vehicles: most companies exporting used vehicles outside the EU are SMEs. This is the case of some garages or ATFs for which the purchase/sale of used vehicles in just one part of their regular business activities. There are also companies which exercise exclusively these activities, buying used cars from garages, insurance companies or individual owners, and organising their export to non-EU countries.

13.2Step (2) consultation of SME stakeholders 

The review process for the ELV Directive started in 2018 and included extensive consultation of the stakeholders affected by this legislation, especially SMEs. The first consultations took place in the context of the evaluation of the ELV Directive 119 . They were followed by consultations carried out as part of the present impact assessment (Open Public Consultation on the Impact Assessment for joint review of the ELV Directive and 3R type-approval Directive 120 , specific consultation for 3R type-approval aspects, additional targeted consultations and bilateral discussions with different groups of stakeholders). The review of the ELV Directive was also covered by an opinion from the “Fit for future platform 121 ” which reflected views from stakeholders. Particular attention was paid to reach out to SMEs during these consultations, either through their umbrella federations at EU or national levels, or directly.

The analysis of the OPC for the impact assessment carried out from July to October 2021 illustrates how SMEs took part in the consultation process. Among the 208 stakeholders which contributed to this consultation, 62.5% were SMEs or organisations representing the interests of SMEs (130 responses), covering a wide geographical scope.

Among others, these stakeholders included for example the European association for national associations of automotive recyclers in Europe (EGARA 122 ); the Association of ATFs in Catalonia (AETRAC 123 ); the French Private Companies Association for Waste Management (FNADE 124 ); the French federation of companies working on services linked to automotive sector, including repair (Mobilians 125 ); the French Federation of Craft Businesses in the automotive sector and in mobility services (FNA 126 ); Gremi de Recuperació de Catalunya 127 ; a Finnish ATF (Suomen Autopurkamoliitto r.y) 128 ; a Czech metal waste processor (DEMONTA Trade SE 129 ); the German association of recycling companies (Bundesvereinigung Deutscher Stahlrecycling- und Entsorgungsunternehmen e.V. 130 ).

In terms of sectoral representation, vehicle manufacturers, importers, suppliers (50), together with waste management operators (dismantlers, ATFs – 47, recyclers, shredder operators – 45) represented the major groups of stakeholders.

13.2.113.2.1    SMEs views relating to measures to increase the re-use of vehicle parts:

The OPC included a specific question, addressed to the professional audience, on which measures would contribute to increase the reuse of vehicles parts, from 189 responses totally received, 130 came from SMEs mostly representing the ELV dismantling sector. 84 of them supported the view that the introduction of an obligation for repair shops to offer used spare parts (together with new spare parts) to their customers would contribute to increase the reuse of vehicle parts. 75 of them were of the opinion that car manufacturers should be obliged to enable ATFs to unlock parts with digital keys so that these parts could be reused after dismantling. Additionally, 66 of the respondents representing the SMEs agreed that the manufacturers should be obliged to provide the dismantling centres information about the parts. 54 of the participants in this category supported the measure to remove certain parts of ELVs before shredding with the aim to support reuse.

13.2.213.2.2    Recycled content target for plastics

Out of 130 responses from SMEs, 71 strongly agreed or agreed with setting a recycled content target for plastics. 30 of these SMEs belonged to dismantling sector or ATFs, while 15 represented the recycling sector. Only 11 of SMEs in these sectors opposed to setting a mandatory target on use of recycled plastic in new vehicles. Taking the total number of SMEs, 36 (or 27.8 %) of them did not agree, while 28 (or 21.5%) remained neutral.

When asked to indicate other materials for which recycled content targets should be considered, most of the SMEs representing dismantling, ATFs, vehicle producers, manufacturers, suppliers and recycling sector chose glass, platinum group metals, REEs, aluminium alloys, other CRMs and steel alloys and magnesium as the most potential candidates.

From the SMEs cluster, the distribution of the responses to this question is provided below:

13.2.313.2.3    Material specific recycling targets

When inquired about establishing a material-specific targets, on the overall, the SMEs were supportive, 83 of them agreed as it would increase the separate recycling, while 70 also noted the increase of the quality of recycling. Although 70 participants admitted that the establishment of the material specific targets would increase costs, 45 also acknowledged that setting such targets would increase the revenues from the sale of recycled materials.

In this context, 28 ELV management operators also agreed that such regulatory approach on recycling targets would have a positive impact on innovation development. SMEs specified that the major impacts are expected in increasing i) innovative eco-design of products; ii) high-quality recycling; and iii) innovative recycling opportunities and processes.

13.2.413.2.4    Export related requirements for the used vehicles 

70 % of all the participants of the OPC represented SMEs and were in favour of new EU-wide export related measures for used vehicles. Assessing the individual responses received, 64 of SME stakeholders agreed with idea to introduce a requirement to provide a valid roadworthiness certificate as a mandatory condition to authorise the export of a used vehicle to a non-EU country. This response was followed by the support to better enforce the existing ban on export of ELVs (57), while 49 suggested to focus on illegal export of ELVs by improving the traceability of vehicles and introducing mandatory criteria to distinguish waste vehicles from used vehicles.

Taking the overall scope of respondents, the main responses were received from dismantling ATF, recycling sector and vehicle producers, manufacturers, suppliers and importers. 8 car dealers and representatives specialising in import/export of used vehicles responded to this question; 3 of them identified themselves as SMEs.

13.3Step (3) assessment of the impact on SMEs

13.3.113.3.1    EPR related measures 

Stakeholders were asked to provide their opinion whether it is necessary to compensate the authorised treatment facilities (ATFs) for their dismantling efforts that, under the current conditions, are not economically viable, in order to ensure a high quality of recycling.

Overall, more than 64% of stakeholders representing SMEs agreed that it is necessary to compensate the costs incurred by the ATFs. The dismantling and recycling sector alone was represented by 65 SMEs. 40 of them were in favour, while 9 of them indicated as I don’t know/ no opinion. Out of 18 individual respondents who identified themselves as vehicle producers, suppliers or importers, 8 individuals disagreed with such an approach.

From the SMEs cluster, the distribution of the responses to this question is provided below:

13.3.213.3.2    Impacts on companies involved in the dismantling and recycling sector:

The economic viability of SMEs in the dismantling sector is already fragile. Under the baseline scenario, they will face considerable challenges within a 10- to 15-year horizon, due to the consequences of the shift to electric vehicles. The dismantling of EVs will indeed require an evolution of their business model, notably investments for new technologies and infrastructure.

For SMEs in the dismantling sector, the measures in the preferred option consisting in increasing the number of parts and components to be removed prior to the shredding phase will generate important extra costs. These costs would be partly offset by additional revenues, notably linked to the sales of used spare parts, which will be considerably encouraged through measures designed to improve the market for such parts. In the same vein, valuable components removed prior to shredding (parts containing plastics, aluminium, CRMs) and sent for high quality recycling will command higher prices than when these components are sent to shredders. Taking advantage of the digitalisation process will be critical in empowering the smaller and often family-run companies to reach out to new market players by connecting to online platforms and distant marketplaces at both local and international levels. In addition, the ‘pull-effect’ from the mandatory target on recycled content for plastics are expected to boost the competitiveness of dismantlers, as they would become the primary supply spots of the high-demand high-quality secondary materials. The measures designed to address the problems of “missing vehicles” will also have a considerable effect for the dismantling sector, as this will result in an important extra volume of ELVs of up to 3.2 million units delivered to ATFs in 2035, and thereby a considerable increase in their turnover. For the extra costs linked to the proposed measures which cannot be offset through market conditions, the measures proposed on EPR will be key to ensure that vehicle manufacturers provide the necessary financial support to dismantlers so that they maintain their competitiveness and face down unfair competition from the informal sector.

Based on the elements presented above, it clear that an important number of factors will influence the competitiveness of SMEs in the dismantling sector. The proposed measures, especially to increase the collection of ELVs, will lead to an important additional economic activity and increased turnover. According to the modelling from the main impact assessment, it would also lead to the creation of about 8,000 jobs in 2035 compared to the baseline related to implementation of the recycled content, quality of recycling and collection related measures. The expected increase in the demand for spare parts, improvements in their distribution and the fluctuations of prices of secondary materials (i.e., spare parts for re-use and materials destined for recycling) will be essential elements to determine the profitability of ATFs. While it remains challenging to provide an accurate projection of the costs and revenues for SMEs from the measures contained in the preferred option, it is estimated that they would be able to increase their competitiveness, with a higher turnover and additional employees, and an overall increased net revenue of 2 million EUR in 2035.

For SMEs involved in the sorting, shredding and recycling of ELV waste, the most impactful measures are those:

(I)on better collection of ELVs, which would mean that additional ELVs would be supplied to shredding and recycling plants;

(II)on recycled content, which should ensure an increased market share for recycled plastics [and steel] through ensuring a steady supply from these recyclates to industries processing them into new products, and boost their competitiveness;

(III)designed to increase the quality of recyclates and improve the treatment of waste, especially the requirements for selective treatment of a list of parts and components (as described in Measure 13b) and new requirements on the ban on the landfilling for automobile shredders residues and on mixing of ELV scrap with WEEE and other scraps during shredding and post-shredding technologies. These measures would require investments, notably for the companies which are currently not operating modern shredding and post shredding technologies.

Overall, the proposed measures would have a substantial impact on SMEs active in this sector, with a large increase in turnover and also new investment needs. And in that case again, the measures proposed on EPR are meant to ensure that extra costs which cannot be offset under normal market conditions should be borne by vehicle manufacturers to support the recycling sector. As for SMEs in the dismantling sector, the overall economic impact on shredding and recycling companies will be highly dependent on the prices of recyclates, which cannot be predicted with certainty. Taking these uncertainties into consideration and based on the model used for this impact assessment, the overall economic impact for the shredding sector has been assessed as representing a net cost of 190 million € in 2035 compared to the baseline, while it would be of 265 million € net revenues for the recycling sector. As indicated above, the extra costs for the shredding sector would be compensated by contributions from the vehicle manufacturers through EPR schemes, so that the competitiveness of the shredding sector would not be affected. The social impact would translate in the creation of 6 000 jobs for the whole sorting, shredding and recycling sector.

Overall, the proposed measures should support the competitiveness of SMEs in the dismantling and recycling sector through new market opportunities. It is however likely that a number of SMEs might not be able or willing to adapt their business models or invest in the technologies necessary to meet the new requirements. In addition, the measures proposed on the design/production of vehicles, as well as those on EPR, could also encourage vehicle manufacturers to play a greater role in management of ELV waste. This could take the form of contractual arrangements with existing actors in the waste management, or of a more direct intervention through direct investments in this field. As a result, it is likely that the proposed measures could lead to a concentration of actors in the dismantling and recycling sectors and a reduction in the number of SMEs in this field. It should be underlined that this trend for concentration is expected to happen under the baseline scenario, as some vehicle manufacturers intend to exercise a higher control over the recovery of materials contained in electric vehicles, due to their value and relevance for their industry. The proposed measures under the preferred option could exacerbate this trend but it is expected that a concentration of the sector would take place in any event under the baseline scenario.

Impact on companies in the maintenance and repair of vehicles: For the SMEs in this sector, the most impactful measure assessed as part of this report is the measure requiring them to offer used spare parts together with new spare parts to their customers (as is currently the case in France). Adopting this measure would be up to EU Member States. This would represent an additional burden compared to the baseline. This will be the case especially for the companies which are not currently used to proposing used spare parts to their customers, as they would have to carry out an additional task. In practice, this new measure would translate in spending a certain amount of time to search for used spare parts. There are many online platforms offering used spare parts for sale, thus facilitating search for the appropriate one.

Impact on companies involved in the export of used vehicles: They will be affected by the measures designed to ensure a better control on the interdiction to export ELVs outside the OECD, as well as by the new measures governing the export of used vehicles (only authorised upon presentation of a roadworthiness certificate). The companies specialised in the export of used cars will be the most impacted. They would incur costs linked to the obligation for them to carry out roadworthiness tests for vehicles which are currently exported after the certificate has expired. In addition, they are likely to see a decrease in revenues linked to a reduction in the export of used vehicles which do not meet the conditions to obtain a roadworthiness certificate. They would then have to sell these vehicles as ELVs to ATFs in the EU, at a much lower price than what they could have obtained for exporting them. The overall net economic impacts for this sector have been assessed to reach a loss of 510 million EUR costs by 2035 compared to the baseline scenario.

13.4Step (4) minimising negative impacts on SMEs

The negative impacts of the preferred option have been minimised through (i) a careful design and adaptation of the measures to ensure that their cost remains proportional to the expected benefits and are not excessive for SMEs and (ii) the introduction of mechanisms of compensation by vehicle manufacturers for possible extra costs linked to the proposed measures, which could be not offset under normal conditions by SMEs (through the establishment of “extended producer responsibility” schemes).

·Companies in the dismantling/recycling sector: The measures impacting companies in the dismantling and recycling sector have been devised in a way to reflect the different situations in the Member States, their degree of technological development, the need to remain technology-neutral and avoid excessive costs. This is in particular the case for the obligations to ensure an improved treatment of ELV and their related scrap: one of the most important measures in that regard is the obligation for dismantlers and shredding companies to operate a selective treatment of a list of parts and components contained in ELV. The definition of the items contained in this list has taken into consideration the associated costs and benefits linked to their selective dismantling. As a result, the preferred option did not retain the suggestions made during the consultation process to include a number of components (as reflected in Measure 14c, which does not form part of the preferred option), in view of the high costs linked to their dismantling compared to the environmental and economic benefits. The preferred measure in that regard is Measure 14b, which includes a shorter list. In addition, the obligation for selective treatment is less stringent than the suggestion made during the consultation process that the items contained in the list should all be removed manually by dismantlers before the shredding stage. This remains an option, but the selective treatment can also be operated by shredding companies if they provide evidence that the quality of the scrap resulting from shredding will be of similar quality than for components removed priori to shredding. This was an important demand by the shredding operators.

The costs linked to the new requirements for the SMEs in the dismantling and recycling sector are also mitigated through (i) measures designed to stimulate the market for recyclates and re-use of spare parts and (ii) financial contribution by vehicle manufacturers to offset compliance costs which cannot be absorbed under normal market conditions (through EPR schemes).

The measures designed to improve the market for recyclates are in the first place the requirements on the mandatory use of recycled plastics (and potentially steel), which will ensure that a steady supply of recycled plastic and steel from ELV scrap is channelled towards the production of new vehicles. These measures correspond to a longstanding request by the dismantling and recycling industry and have proven to be very effective in boosting the recycling of plastics when they were first implemented at the EU level for bottles made of Polyethylene terephthalate (PET). The measures designed to boost the market for the re-use and remanufacturing of spare parts described in Measure 14b will one the other hand provide a larger access for ATFs to the market of spare parts and help them better compete with informal actors.

The measure foreseeing the establishment of EPR schemes will in addition ensure that the dismantlers and recyclers can benefit from financial support channelled by the vehicle manufacturers to offset compliance costs. In this case, this means that SMEs in the dismantling and recycling sector will not have to face along the extra-costs of measures designed to improve the collection and treatment of ELV waste but would be able to rely on the financial contribution of large companies (vehicle manufacturers). While calling for the establishment of such schemes, the dismantling and recycling sector has also emphasised that EPR schemes should not be used by the vehicle manufacturers to impose their practices and business models towards them. They have insisted in particular on the need that they should be adequately represented in the governing bodies of Producer Responsibility Organisations and that there is an oversight by public authorities on the functioning of the EPR schemes. These concerns have been taken into account in the preferred option, which includes explicitly these points.

·companies in the maintenance and repair of vehicles: In view of the relatively limited input received by SMEs in this sector in the consultation, the very small size of many of companies and the concern that a mandatory obligation could place an unnecessary burden on them, the preferred option did not retain the measure making it mandatory at EU level for these companies to offer used spare parts together with new spare parts to their customers. Rather, it provides that Member States should put in place a set of measures to promote the market and acceptance for used spare parts. This could include an obligation on garages to provide offers for used spare parts (as described above), but this would remain at the discretion of the Member States and not be an EU wide obligation.

·Companies involved in the export of used vehicles: the measure on the export of used vehicle has been devised in a way which does not constitute a blanket ban. During the consultation process, suggestions were made to ban the export from the EU to third countries of all used vehicles which would be over a certain age or not complying with Euro emissions. This would have led to a prohibition of export for a wide range of vehicles, even those which are still roadworthy, without the possibility for exporters to overcome it. This suggestion has not been retained in the preferred package, which foresees rather than the export is conditioned upon the presentation of a valid roadworthiness certificate. Exporters could then be able to continue exporting used vehicles for which the certificate has expired, on the condition that they ensure that the vehicle continues to be roadworthy and obtain the required certificate before export. While this would represent a cost, it is deemed proportionate to the aim of the measure, which is to avoid the export of non-roadworthy vehicles outside the EU, and consistent with the obligations applying to vehicles on the EU road which cannot be driven without such certificate.

13.4.113.4.1    EU-wide measures to mitigate impacts for SMEs

The impact assessment has taken into account that the attainment of higher quality treatment of ELV, the uptake of recycled materials in new vehicles, a wider re-use of materials and the design of more circular vehicles can only succeed if the European companies are ready to engage in new circular business models and are equipped to do so. This requires new technologies, investments and reforms that unlock the full potential of such investments. This is the case for SMEs in automotive and recycling sectors, which need to be modernised, extend their capacity in meeting upgraded treatment requirements, customers’ needs and keep up with the digitalisation of the processes.

The EU has put in place in the last years an unprecedented level of public financial support for investments which are specifically geared towards the green transition. This represents considerable opportunities for all actors in the waste sector, which are mostly SMEs, and the industries processing waste to accelerate the transition to the circular economy. It includes funding available under the Multiannual Financial Framework for the period 2021-2027, especially the European Structural and Investment Funds 131 . In addition, the Recovery and Resilience Facility (RRF) 132 , including REPowerEU 133 , which is the key instrument at the heart of the €807 billion NextGenerationEU 134 , supports reforms and investments (with more than €11 billion until 2026) in 21 Member States for innovative and advanced solutions for separate collection, sorting, reuse and recycling, as well as fostering the development and adoption of circular economy innovations.

Circular economy is also embedded in the matrix of the Horizon Europe 135 programme on research, notably its partnership on circularity 136 . It is one of the pillars of the Programme for the environment and climate action (LIFE) 2021–2027 137 , the only EU funding instrument entirely dedicated to environmental and climate objectives, with an allocation of €5 billion for the period 2021-2027. Thanks to these programmes, the EU supports more than 200 000 businesses every year. EU Funding is available for all types of companies of any size and sector including entrepreneurs, start-ups, micro companies, small and medium-sized enterprises. More information on projects under these programmes which are particularly targeting the design and recycling of ELVs is provided in Annex 9 of this report.

The European Investment Bank is also a key player in supporting the transition to a circular economy and has recently stepped up its engagement in this field 138 . The European Investment Fund 139  provides specific support to European SMEs in the form of business loans, microfinance, guarantees and venture capital. The InvestEU programme also supports circular economy approaches, including in SMEs, by mobilising public and private investment through an EU budget guarantee 140 .

Finally, there are a number of different platforms established to coordinate and streamline the support for the SMEs at the EU level. For instance, the Enterprise Europe Network (EEN) 141 helps businesses innovate and grow on an international scale. It is the world’s largest support network for SMEs with international ambitions. It brings together experts from member organisations that are renowned for their excellence in business support, including chambers of commerce and industry, regional development organisations, universities and research institutes and innovation agencies. Such cooperation mechanism supports the SMEs in dealing with different challenges in running their businesses across different sectors.

Annex 14: Impacts of the proposed measures for the automotive industry in the international context

14

14.1Main findings

The European automotive industry has been continuously growing since 1980. Thanks to the technological progress resulting in the emerge of more fuel-efficient and electric vehicles 142 , this growth has further enhanced. Today Europe is the second biggest vehicle manufacturer in the world 143 , whereas 12.1 million vehicles produced in the EU accounts for 15.3% of the total motor vehicle production worldwide. Passenger cars represent 82 % of all the vehicles produced in the EU 144 . Although compared to 2020, manufacturing of passenger cars dropped by 7.7 % in 2021, the EU maintained its global competitiveness by delivering 9.9 million cars 145 .

Based on ACEA statistics, every year the European automobile industry exports 5 747 063 motor vehicles 146 , with a positive trade balance of 2 182 321 units. In 2021, over 3 million passenger cars were imported to the EU 147 . According to JRC estimates in the study on the recycled content for plastics 148 , the import of new vehicles manufactured in non-EU countries presents 30% of the total number of vehicles traded in the EU, while the export of the EU manufactured vehicles to third countries is 46%. The number of manufactured vehicles would increase by 1.3 times in the EU, which can be translated into 19.3 million vehicles in 2030 and accordingly 19.5 million – in 2035 (vs. 14.9 and 15.0 million of the EU sales) 149 .

Table 14.1 Overview of the main countries of origin of passenger car imports in the EU (in units), ACEA, 2021.

To enter the EU market, manufacturers must adhere to a variety of legal requirements:

I)all imported vehicles to the EU must be type-approved. This process involves demonstrating that the vehicles meet the essential safety and environmental requirements of the EU. Certificate of compliance, granted during the type-approval process, shall include the appropriate documentation and describe the strategy recommended by the manufacturer to ensure dismantling, reuse of component parts, recycling and recovery of materials 150 ;

II)vehicles must be designed in way that meets the EU safety standards established in Vehicle General Safety Regulation 151 , such as the electronic stability control, lane departure warning, advanced emergency braking systems;

III)Vehicles shall be labelled 152 and to include the information on the fuel efficiency and emissions. This information helps consumers in taking decisions before purchasing cars and encourage the manufacturers to reduce the fuel consumption in new cars.

All manufacturers placing their vehicles on the EU market shall comply with the EU specific rules on the fuel efficiency and Euro emissions standards. The expected impacts of the new legislation are comparable to those analysed under the impact assessment of the Euro7 proposal 153 which introduces the emission compliance requirements for all motor vehicles put on the EU market, i.e., manufactured and imported to the EU. Based on the compiled evidence, the assessment reveals, most of EU trade partners for the vehicle production, namely the United States, United Kingdom, China, Japan, South Korea, and Switzerland, are developing more stringent standards or are already following the Euro standards. It is in particular relevant for countries, participating in the EU single market as a part of EFTA agreement. It was also revealed that the manufacturers are able to adjust the vehicles’ emission control systems to the markets that do not require compliance with the Euro emission standards, e.g. China or the United States.

Similar reasoning can be applied for assessing the impacts across the global producers regarding the proposed design-related requirements for vehicles that would be placed on the EU market. In this context, it is important to take into account that it is a common practice upon which the vehicle manufacturers worldwide adapt to specific market requirements by designing and producing vehicles that meet the requirements to those markets. Manufacturers align to the markets by offering a range of models fitted to the preferences of the customers. This may include different engine types, trim levels, and other aspects.

Overall, manufacturers adapt to EU requirements by using a variety of strategies and technologies to design vehicles that are compliant with the regulations and that meet the preferences and needs of customers in that market. Manufacturers also often adapt to specific requirements by localizing their production in that market. According to the European Automobile Manufacturers’ Association (ACEA), currently 301 automobile factories operate across Europe, producing passenger cars, light commercial vehicles, heavy-duty vehicles, buses, engines and batteries, with 194 of these plants being situated within the EU itself 154 .

14.1.114.1.1    Decarbonisation efforts by vehicle manufacturers

Although there are no global or the EU wide recycled content requirements for vehicles, many manufacturers have already taken efforts to include higher shares of secondary materials and thus to decarbonise their production lines. Substitution of primary materials with the recycled content reduce the carbon footprint and also brings significant cost savings to the producers. These are examples of car manufacturers already integrating recycled content: an average of just under 30 % of BMW Group vehicles are currently made from recycled and reused materials. It is intended to gradually expand this figure to 50 % 155 . BMW Group has set itself the target of increasing the proportion of secondary materials in the thermoplastics used in new vehicles from currently around 20 % to an average of 40 % by 2030 156 . PEUGEOT 508 has an average of 31% recycled and natural materials in the vehicle; Stellantis 157 plans to boost recycled material content in vehicles by 35% 158 . Toyota aims to increase the use of recycled plastics by more than three times compared to current levels by 2030 – and fully switch to leather-free interiors by that time 159 . In 2021, Ford used post-consumer nylon in a battery box and 50% of post-consumer PP, ocean plastics and nanocellulose PU foam in various applications. Ford Motor expects that by 2035, half of its plastics will come from recycled or renewable materials, and that the company will be completely carbon-neutral by 2050 160 . Volvo, the Swedish manufacturer, set the ambition by 2025 to reach 25 % of its used plastics to be bio-based or from recycled materials, and 25% of steel with 40% aluminium coming from recycled sources 161 . To have a common industry-supported definition and approach for measuring recycled content of automotive products, a group of vehicle manufacturers, such as Ford Motor Company, General Motors, Honda Development & Manufacturing of America, LLC (HDMA), Stellantis, Toyota Motor North America, and their suppliers has recently adopted guidance 162 .

These facts shows that the automobile industry is already taking initiatives in finding solutions that would lead to a more efficient and cost-saving production process of vehicles, by foreseeing optimal use of secondary materials, particularly steel. As these actions are voluntary, they are not currently supported or incentivised by law. Introduction of mandatory recycled content targets would send a clear signal to the automotive sector and credibility to the market players in terms of providing a balanced supply and demand of the secondary materials in a long term.

In addition to voluntary actions at the company level, different countries, where the vehicle manufacturers are established, implement national policies in order to accelerate decarbonisation of the steel industry. These include the following examples:

·China which is responsible for producing well over half of the world’s steel in 2020 has announced it will be putting a price on steel emissions, possibly as soon as 2023 163 . They further announced as part of the 14th Five-Year-Plan (2021-2025) that it will be prioritising the creation of a circular economy 164 , seeking to increase the use of scrap steel to 320 million tonnes by 2025, an increase of around 30% relative to estimates for 2020. This follows India – the world's second largest steel producer in 2020 – releasing their own Steel Scrap Recycling Policy 165 , aiming to promote a circular economy in the steel sector by facilitating steel recycling across the product life cycle. 

·The EU is in the process of developing a carbon border adjustment mechanism 166 for steel, while the United States 167  has announced that it is considering the same. These policies would apply tariffs on imported emissions-intensive goods from jurisdictions with weak or absent emissions policy in an effort to limit carbon leakage and incentivise stronger emissions measures overseas. 

·France 168  and Japan 169  recently released roadmaps for decarbonising the iron and steel sector, setting out specific targets and laying out concrete steps for their steel sectors, with the national plan calling for emission reductions of 31% by 2030. 

·Germany, which is the biggest vehicle manufacturer of the EU, announced earmarking 7 billion EUR 170  for green hydrogen. It also includes EUR 55 million for steel production run by hydrogen. 

These already now ongoing practices are expected to affect the driving forces of the market for secondary metals, and accordingly to balance the supply-demand of low-carbon steel. It is an important factor for the automotive industry which is the major “client” for steel sector operating at the local, regional and global scale.

14.1.214.1.2    Automotive global supply chain 

The automotive industry is functioning on global supply chain for several reasons:

(a)Access to production materials. Manufacturing of vehicles requires a range of different materials (ferrous, non-ferrous metals, plastics, etc.). By having a global supply chain, producers can access these materials from different parts of the world. By outsourcing certain parts of the production process to countries, vehicle producers reduce the overall cost of production and increase profits.

(b)Competitiveness advantage. A well-functioning global supply chain provides the vehicle manufacturers with advantage to be able to quicker respond to changing market demands and trends.

(c)Expertise. Certain automotive components or processes may be better managed by suppliers who hold the specialized expertise. For this reason, a global supply chain gives the vehicle manufacturers the access to a wider pool of suppliers and their specialized knowledge.

Taking in to account the above aspects, the global supply chain plays a central role for the smooth functioning of the automotive industry. In this context, the implementation of the foreseen design requirements builds on this model. The future Regulation aims to respect these principles and does not disrupt but rather to improve the business working model.

Introduction of recycled content targets for plastics would allow the manufacturers exporting vehicles to the EU to maintain their competitiveness within the global supply chain. It would not restrict the vehicle manufacturing companies – established both at the EU and in third countries – to source their recycled plastics or steel from outside the EU if they can verify that that this content used in their production is indeed recycled materials based on the specification criteria (e.g. minimum % share of closed-loop). Being within a global supply chain, manufacturers are in a position find the best quality materials for their production needs. The global supply chain allows manufacturers to source materials from the most cost-effective and efficient sources, regardless of geographical location. As a result, with a possibility to source recycled content from outside the EU, manufacturers enjoy broader access to a pool of suppliers specialising in the concrete areas.

Therefore, introduction of the new design-related requirements for vehicles takes into account the fact that the global nature of the supply chain is an important aspect of the automotive industry. Along these lines, it is therefore, important to set the same legal requirements for both the EU manufacturers of vehicles and importers for the following reasons:

·Legal clarity. Common requirements simplify the process of importing and selling vehicles in the EU, reducing costs and administrative burdens for companies operating in the market.

·Fair competition. By setting up the same requirements for both the EU manufacturers and importers, a level playing field is ensured.

·Market stability. Consistent and uniform legal requirements ensure stability and predictability in the EU automotive market. This attracts investment, foster growth in the industry.

·Consumer protection. Same level of requirements ensures that all vehicles made available on the EU market meet the same requirements. 

Today, many countries where the automobile industry is established, regulate end-of-life treatment. In South Korea, end of life treatment of vehicles has been managed by the Act on Resource Circulation of Electrical & Electronics and ELVs since 2008, which is similar to the EU WEEE and ELV Directives 171 . It regulates the restricted use and prohibition of toxic substances (e.g., cadmium, hexavalent chromium, lead, and mercury) in vehicles and promotes their recycling by establishing a resource-circulation system of ELVs. It set a mandatory target recycling rate of 95% including 10% energy recovery as a maximum in the beginning of 2015. In Japan, legislation on ELV recycling was implemented in 2005 based on the shared EPR concept. Automobile manufacturers including importers take responsibility for the collection and recycling of ELVs 172 . The Circular Economy Promotion Law 173 in China was designed to reduce waste and promote sustainability. The provisions and targets for recycling and waste reduction, as well as regulations for the management of waste, apply to the automotive industry and the vehicles it produces 174 . Overall, these regulations set recycling requirements mainly focussing on the recovery of metals, plastic, and other materials from end-of-life vehicles for re-use.

Since the late 2000s, China has adopted the circular economy as a national priority and defined vehicle remanufacturing as a strategic sector. Remanufacturing uses approximately 60% less energy and 70% fewer materials than making new products. Vehicle remanufacturing in particular has a huge market potential in China, with its existing stock of 365 million vehicles, and an automotive repair and maintenance market worth 157 billion USD annually 175 . There are also other exemplary business cases towards support for the market of used and remanufactured spare parts. Renault Group established an ambitious policy designed to boost the remanufacturing of vehicles parts and components, thereby reducing the use of virgin materials. This approach has led to generate revenues of nearly 120 million EUR in 2019 alone from remanufacturing activities. By 2025, Renault expects to generate 200 million EUR through its recently planned recycling business 176 . Volvo currently remanufactures 36 different component groups, including engines, gearboxes, turbo compressors and clutches. In 2021, Volvocars International saved over 4,000 tonnes of CO2 by remanufacturing over 37,000 parts 177 .

Similar to the situation in recycled content, manufacturers already integrate different elements of circularity into the manufacturing policies. A number of companies publish this information on their websites in a form of strategies, annual sustainability reports 178 or general overviews 179 . Among other information, these documents include the overview on the innovations, investment into R&D, long term climate neutrality objectives, social and corporate responsibility in sourcing materials, measures taken to increase resource efficiency 180 and decrease cost of production. Therefore, new requirement for the manufacturers to prepare and implement circularity strategies for vehicles would complement the current practices by defining common criteria for content and presentation. 

14.1.314.1.3    Factors for the development of the European automotive industry

Europe is the birthplace of the automobile and has a long history of developing breakthrough innovations 181 . Representing 27 percent of the region’s total R&D investments, the automotive industry is Europe’s largest R&D investor. In 2021, Automotive R&D investment (EU) was equal to 58.8 billion Eur. Moreover, Europe has the right talent and human capital to continue successful automotive innovations and has a number of globally leading universities along the ACES trends: 13 out of 17 universities globally leading in the area of electrification are based in Europe; also 4 out of 17 in autonomous driving and 8 out of 19 in connectivity.

The EU contributes to this development by providing a number of different funding opportunities for both public and private sector, through Horizon 2020, LIFE programmes. More information on the projects is provided in Annex 11 of the IA.

14.2Conclusion

From the legal point of view, future requirements would apply equally both to European producers and to importers and would be consistent with the EU’s international obligations on the trade relationships and the WTO, considering that the requirements are non-discriminatory and justified for reasons linked to environmental protection. The new legislation will in due course be notified under the TBT Agreement.

Moreover, the EU manufacturers would not be put in the more advantageous position, as the majority of the manufacturers, representing the most popular brands of the imported vehicles to the EU, already integrate business practices to optimise the functioning of their production lines and the increase the efficiency in material use. These aspects are comparable to the measures proposed under the preferred option of this impact assessment.

Therefore, the design related requirements to be foreseen under the future legislation would be complementary to the current set of the EU rules and would apply in a proportionate and non-discriminatory manner for both importers and those manufacturers established in the EU. Such regulatory approach would therefore not affect the international competitiveness of the EU or third parties.

Annex 15: Contribution of the revision of the ELV and 3R Type-approval Directives to the circularity of critical raw materials (CRM)

The Commission proposal for a Critical Raw Materials Act adopted in March 2023 contains a series of measures linked inter-alia to the development of Critical Raw Materials (CRMs) value chains in the EU, and to the diversification of supply and partnership to reduce supply risks. It contains measures designed to increase the circularity of products containing CRMs and the recycling capacity for these products in the EU. Considering that new vehicles contain substantial quantities of CRMs (see sections 15.1 and 15.4.1 below), and that at the same time end-of-life vehicles represent an important source of secondary raw materials, the joint revision of the ELV and Type Approval Directives represents a key opportunity to improve the recovery of CRMs used by the automotive industry, hence already contributing to the objectives of the CRM Act. Furthermore, the extension of the scope of the EU legislation on ELV and 3R type-approval to new vehicles such as lorries, buses and two-wheelers broadens the EU capability to recover higher quantities of CRMs from vehicles, which represents an additional boosting contribution to the CRM Act circularity objectives.

This annex summarises key information and data related to proposed measures for circularity of CRMs in the preferred package, including: 15.1) Relevant information (EU import reliance, market share, main and expected future use) on CRMs in vehicles and relevant components containing these CRMs; 15.2) expected 2035 and 2040 impacts of these measures for the circularity of the relevant CRMs 15.3) suggestions for follow-up review clauses on CRM circularity measures, and 15.4) additional contribution of the potential ELV and Type-Approval directives extension of scope to a higher circularity of CRM. The data presented in this Annex have been compiled by the Commission Joint Research Centre, and is a part of a study to be published later in 2023 182 .

15

15.1Relevant information on CRMs in vehicles and relevant components

There are more than 60 materials used in ICEVs (internal combustion engine vehicles) and EVs (electric vehicles), although only a dozen of materials represents up to 95% of the total weight of the vehicles. From a CRMs perspective, most of the value of an ELV is not in the most abundant materials and CRM content differs significantly between ICEVs and EVs 183 . ICEVs mainly contain cerium (Ce), lanthanum (La), palladium (Pd), platinum (Pt) and rhodium (Rh) in the catalytic converter, whereas EVs contain many CRMs in the electric power train: namely neodymium (Nd), praseodymium (Pr) and dysprosium (Dy) in the REPMs (rare-earth permanent magnets) of the e-motor, lithium (Li), cobalt (Co), manganese (Mn), and nickel (Ni) in the battery (batteries types and materials are covered by the adopted Battery Regulation). A trend valid for both ICEVs and EVs is the higher and higher amount of electrics and electronics 184 , which corresponds to a higher content of silver (Ag), gold (Au), Dy, Nd and Pd. The possible future deployment of fuel cells vehicles might also require large amounts of Pd and Pt for the appropriate catalyst.

Larger requests of copper 185 (Cu) and other base metals such as aluminium (Al) are occurring due to the transition from ICEVs towards EVs. Moreover, metals alloys often contain CRMs: 4xxx and 5xxx Al-alloys contain respectively silicon metal (Si) and magnesium (Mg), beside to other metals as Cu and Mn while steel laminations (also named electrosteel or Si-steel) contain up to 3.5 wt.% of Si, and high-strength steel is relevant for the content of niobium (Nb). Similarly, Mg alloys are made-up also of Al and Mn and, in general, the automotive sector corresponds to 50% of the Mg demand in Europe 186 . In Table 15.1 Table 15.1 a summary on import reliance, current use in the automotive sector and market share for the automotive or all the EU sectors and future demand of some critical and precious metals are reported. Through the parameters in Table 15.1 Table 15.1, an analysis of the relevancy of CRMs in ELV is provided together with failures in the EU strategic autonomy and in circularity of the same materials, which might be mitigated by one or more measures. The parameters were already defined in the methodology for establishing the EU list of CRMs 187 and the data, in particular, were extracted from the Raw Material Information System - RMIS dataset 188 . A circularity failure is observed when the circularity of a CRM contained in key components is not maximized, e.g. because of technical limitations or because of market reasons (e.g. limited demand of secondary raw materials). In the criticality assessment, the parameter on the market share provides insight on the importance of a material for the EU economy, in particular in terms of end-use applications. It is significantly important to know the current and expected market share of the automotive industry for given CRMs to suggest a product or specific waste policy measures.

Table 15.1 Summary of key features of relevant CRMs contained in vehicles

Source: JRC elaboration, based on RMIS dataset. https://rmis.jrc.ec.europa.eu/  *EU end-use sector, not specifically related to automotive sector **It is considered that a CRM or a CRM based component is characterised by a circularity failures if circularity principles are hindered, due either to technical challenges of market failures (no demand of recycled materials).

While platinum group metals (PGM) in catalytic converters are already recovered due to their high market values, Pd from car electronics and controllers are not targeted in the current sorting and recycling processes. Precious metals (Au and Ag) in the same vehicle controllers can also be targeted together with Pd, as their recovery potentials from ELV are not maximised.

REEs from ELVs are not recycled at all. REEs are present in several components of both ICEVs and EVs: for instance, glass windows and catalytic converters do have La and Ce (albeit not recovered); electronics, actuators and small motors do have REPMs even if they belong to specific ICEVs segments as found from indirect evidence of shredded ICEVs. However, undoubtedly, the largest consumption of REPMs is in the e-drive train motors. Si-steel in steel laminations can also be targeted together with REEs in e-drive motors. It has been reported that the current and expected 2035-2040 EU passenger car fleet would rely mainly on REPM e-drive motors, containing the highest concentration of REEs (Nd, Dy and Pr) in vehicles. A second type of e-motors does not have REPMs but a Cu induction coil (labelled in the JRC report as REPM-free e-motors). This later expected market share would be less than 23% in the forecasted period of 2035-2040. REEs have a very high future supply risk and are crucial to e-motor as well as other EU strategic sectors. At the same time, their expected increased use in the coming years make them a priority target to be legislated. As electric motors are developing in all sectors, there is also currently an untapped potential related to re-use opportunities of electric motors coming from end-of-life vehicles. Finally, it is supposed that vehicles also have significant amounts of gallium Ga, in integrated circuits, sensors and microchips, but little to no data are available for these two materials.

REEs in REPMs and Si-steel in steel laminations, both in e-drive motor, are used here as examples to illustrate current circularity failures. The baseline scenario for e-motors is, once reaching an Authorised Treatment Facility (ATF) that they are not disassembled from the car hulk prior to shredding, and therefore leading to REPM and Si-steel loss, while copper contaminates some ferrous and non-ferrous metals fractions.

Figure 15.1 reports the forecasted amounts (in number per year) of e-motors collected at ATF level.

Figure 15.1: Forecasted (number of) e-motors from EVs (passenger cars) expected to enter ATF in the EU

Source: JRC 2023 189 . It is assumed here an average of one e-drive motor per EV.

REPM e-motors contain circa 1.2 kg of REPMs, up to 5 kg of Cu and up to 23 kg of Si-steel. REPM-free e-motors do not contain REEs but still contain similar amount of Si-steel and up to 10 kg of Cu. As the know-how of REEs recycling and the lack of recycling infrastructures in Europe currently prevent from recovering REEs from REPM, the potential quantities above would be diluted (downcycled) in the ferrous and non-ferrous fractions or send to landfill if no relevant measures would mitigate such circularity failures.

15.2Expected 2035 and 2040 impacts of the measures for the circularity of the relevant CRMs and other materials contained in the preferred option 190

The measures aiming at improving circularity of CRMs and other relevant materials are reminded in this section and are assessed against three dimensions:

·Impact on material flows and on production of Secondary Raw Materials (SRM)

·Environmental based assessment

·Socio-economic assessment.

Impacts on innovation as well as administrative burdens are also captured in this analysis of impacts. While the full assessment is available in the JRC report 191 , initial selected expected impacts are reported below.

15.2.115.2.1    Measure 1: Mandatory removal of e-drive motor by authorised treatment facilities:

Linked to the option PO3A, M13a in Annex 7.2.3

The scope of this measure only targets EVs (PHEV+HEV+BEV).

The assessed measure on e-drive motors is thus targeting circa. 2.5 million ELV reaching EU ATFs in 2035, and circa. 5 million ELV at ATF level in 2040. Of those motors, it is also forecasted that 2.3 million and 4.3 millions permanent magnets e-motors from ELV would be separately collected from ATFs in 2035 and 2040. The SRM production estimated is presented in Table 15.9 Table 15.9 .

Table 15.9: 2035 and 2040 SRM production from measure 1. Units in kt.

Source: JRC, 2023. *it is considered here the recovery of silicon steel as a separate flow. However, further assessment is ongoing to assess this recovery’s feasibility.

For SRM from REPM recycling, the potential corresponding flows available for recycling due to this measure are up to 2 kt in 2035 and 4.2 kt in 2040. Since the assumed 2035 and 2040 recycling rate for magnets would be respectively 18% and 35%, the output flows (e.g. REEs, Fe, Co) produced would be up to 0.35 kt in 2035 and up to 1.4 kt in 2040. Such flows would in principle cover, in closed loop perspective, 3% to 12% of the expected e-drive motors 2035-2040 EU demand scenarios (for passenger cars), with contributions to the reduction of supply disruptions and to the EU strategic autonomy.

This measure would also increase reuse flows. The potential of reuse of permanent magnet is relevant for e-drive motors as well as other markets and can also contribute to remanufacturing strategies, implying the creation of further incentives for reuse and the development of second-hand products and markets. In this sense, the content of Dy, which increase the resistance to demagnetization, will be a significant parameter in the REPM composition.

The assessment of environmental impacts of changing the End of Life (EoL) handling of e-drive motors is based on a review of life cycle assessments (LCA) on e-drive motors and NdFeB magnets. Based on a first analysis, this measure would lead to a reduction of climate change impacts thanks to separate removal and recycling of the e-drive motor, instead of shredding it with the car hulk. The potential incorporation of secondary REOs to replace primary REOs into new products would significantly lower the environmental impacts and hazardous (connected to generation of radioactive waste) from primary mining. The reduction of resource scarcity is also significant.

From socio-economic dimension, this measure would lead to a further job creation at ATF level and would lead to an increased turn over at ATF and recyclers level thanks to the expected surplus of SRM flows from e-drive motors removal.

The cost of removal of e-motors, revenues at ATF level as well as those returned that incur from their recycling or reuse were assessed. Initial results estimate a 10 minutes removal time of e-motor for recycling purposes at ATF level, and 20 minutes non-destructive removal time for reuse purposes. The assessment was based on a labour cost of 35€ per hour, 8 working hours a day and 200 days of work per annum representing a single job. 19€ and 129€ of additional logistic costs for the ATF per e-motor in case of removal (for recycling) and disassembly (for reuse) were therefore calculated. Such costs cover logistics not related to the removal actions, like costs of storage of removed motors or their inclusion in a sales platform in the case of reuse and may have some overlap with the costs estimated for removal. Revenues for recyclers were based on the same sources as the ones used in the ELV impact assessment main support study 192 .

Thus, the partial socio-economic impacts would be:

·Overall, costs for ATF operators can be allocated to two main entries (see  Table 15.10 Table 15.10 ): i.e., removal activities and its accompanying logistic costs. It is assumed that the costs for removal operations would be up to 15 M€ in 2035 and up to 29 M€ in 2040. The ATF logistic costs (transport, storage…) would be up to 50 M€ in 2035 and up to 96 M€ in 2040. The difference of costs between the assessed years is also linked to the significant increase of EVs reaching EoL over the years. Collected e-motor flows from ATF would in principle be diverted to reuse or recycling purposes. Overall, the main challenge towards the feasibility of this measure relies on the development of magnet recycling infrastructure as well as market opportunities for e-motor materials (including REPM but also electric steel). Furthermore, the development of markets for reused e-motor would lead to higher environmental savings compared to recycling routes, the latter may create economical pressure to favour reuse of e-motors rather than recycling where the motors are still intact (meaning that recycling and its benefits could still take place at a later point in time).

·Revenues are distributed over ATFs (see  Table 15.10 Table 15.10 ) and recyclers (see  Table 15.11 Table 15.11 ). Thanks to this measure, it is estimated an overall ATF additional revenue up to 98 M€ in 2035 and 214 M€ in 2040, respectively. The additional revenues at recyclers’ level are expected to be respectively circa. 68 M€ in 2035 and up to 181 M€ in 2040. Here also, the higher increase of revenues is also due to the higher share of EVs reaching EoL over the assessed years. Recyclers’ revenues consider here the recycling of REPM materials, assuming the establishment of future recycling facilities. In a conservative scenario, where no magnet recycling is considered, revenues will decrease to 56 M€ for recyclers in 2035 and 130 M€ for recyclers in 2040. Revenues are considered as conservative as the separate treatment of e-motor might generate additional revenues thanks to the production of other metals flows such as secondary Si-steel or secondary copper.

·Looking only at the costs expected for ATFs and the end-of-life HEV, PHEV and BEV being collected for treatment, it is estimated that the cost of the measure per vehicle for the ATF would be around 25€ over the assessed years. The benefits for the ATF are currently lower than expected costs and so would not cover the burden of implementation. Though the expected revenues to recyclers would help set off gradually the burden in 2035 and completely in 2040, the cost calculations are initial and some form of compensation (through the EPR) or allocation of revenues (through an increase in the cost recyclers are willing to pay ATFs) would be needed for ATFs to retain economic feasibility. This assessment only considers the EVs fleet since they contain e-motors. In case of all ELV flow considered, it is estimated that the cost of the measure per vehicle (all drive trains considered) for the ATF would be around 7€ in 2035 and 12€ in 2040.

Table 15.10: ATF economic assessment

Table 15.11: Recyclers economic assessment

*Considering revenues from recycling electrosteel as steel in general.

·Jobs to be created at ATF level would be up to 270 in 2035 and 520 in 2040, should the e-motor measure be applied. Removal of e-motors can also be performed in (semi-) automated process, leading to a decrease of destructive removal time to less than 1 minute. The use of (semi-) automated processes might decrease the forecasted jobs to be created at ATF level, but will require an investment in equipment. Impacts are not expected to change in cases where the e-motor would be disassembled for reuse purposes, instead of recycling routes, as at present equipment only shortens the time needed for destructive removal. Employment at recyclers’ level is not assessed because of lack of data. The latter is dependent on the future development of EU recycling facilities to recover Nd and magnet materials.

Overall conclusions stemming from this partial socio-economic impact assessment describe the benefits and some main challenges towards higher efficiency of this measure to fulfil its objective of improving REE circularity. As compared to the baseline, this measure leads to a higher job creation and additional revenues for both ATFs and recyclers. The reuse of e-motors could generate even further revenues for ATFs and may motivate ATFs to perform non-destructive reuse should the demand for second hand motors develop. Additional costs are generated due to the separate sorting and recovery of e-motors. The level of benefits and thus also of their ration to costs is highly dependent on whether robust REE recycling processes and market will develop by 2040. Clearly, this measure contribute to setting-up such an infrastructure and market in the EU. Overall, more benefits than burdens are stemming from this measure, when compared to the baseline option when e-motors are shredded with the car hulk. EPR might support the additional burden at ATF level in order to ease the implementation of this measure in the early times where the total revenues related to this measure do no suffice for the practice to be economically feasible. Another opportunistic benefit related to the removal of e-drive motors from passenger cars would be linked to the optimisation of costs related also to the collection and removal of batteries from ELVs. As the Battery Regulation would require 100% collection of EVs batteries, treatment and removal costs might be allocated to batteries and near-by components such as e-drive motors or inverters, leading to a decreased ATF burdens related to the removal of e-drive motors.

This measure would also have a positive impact on innovation and R&D devolvement in EU. The available e-drive motors flows would thrive research, innovation and the development of new recycling technologies to increase the recovery of SRM from these flows. It is unlikely that such measure would hinder advances in performance and new technology approaches.

15.2.215.2.2    Measure 2: Design provisions for e-drive motors:

Linked to the option PO1B, M7 design requirements in A7.2.1

This measure would be applied for new types put on the EU market and would enhance the eco-design of e-drive motors in future vehicles. The core of the measure is defining design constraints on the OEM to provide clear and succinct instruction on the disassembly operations. Such instructions should include a list of interfering components and parts to be taken out to reach the e-drive motor, the different tools required as well as the number of fastening techniques to unlock and extract the e-drive motor. This measure also ensures that the design of the vehicle and joining, fastening or sealing techniques do not prevent disassembly operations. While this measure would not markedly influence the potential SRM production from e-drive motors recycling, nor their environmental impacts, the estimated reporting and design costs might be slightly impacted.

The assessed measure would require OEM investments in the reporting of instructions and reports to be provided to ATF to ease the disassembly of the e-drive motor. Besides, in order to ensure eco-design provisions and possibly optimise disassembly operations at ATF level to extract the e-drive motor, R&D costs would be generated at OEM level to enable technologies and processes. Such costs are aligned with the five strategic R&D areas identified by the European Council for Automotive R&D 193 . However, it is expected that these R&D costs allocated to the ease of disassembly design of the e-drive motors would be distributed over the next decade and are also aligned with most of the OEMs perspective towards the development of sustainable vehicles and improved mobility, see for example the BMW I vision circular 194 , or Renault Re-factory 195 . This measure is not foreseen to hinder innovation and the development of new technologies.

From ATF perspective, the measure aims to facilitate disassembly operations of the e-drive motor when present in the ELV. It is then expected a decrease in removal and disassembly times as well as the optimisation of ATF costs.

15.2.315.2.3    Measure 3: Mandatory removal of selected embedded electronic components (EEC) group by authorised treatment facilities:

Linked to the option PO3B – M13b, A7.2.3

The JRC analysis 196  is building mostly on methodologies and results from the recent project EVA II 197 , conducted by Empa for the (Swiss) federal office of the environment (FOEN). This measure would apply to selected electronic components embedded in vehicles. The key characteristic of those components is that they require electricity to function, either from an external source through a cable, or with the help of an internal battery. These components were shortlisted by the JRC from four main categories: Controllers, Headlights, Actuators and Cables. Such components contain base and strategic metals (steel, Al and Cu), plastics but also precious metals and CRM such as Palladium (Pd) and Gallium (Ga). Pd content is expected to increase due to more electronic components and due to the electrification of the EU fleet.

Those metals are mostly lost at the end-of-life if the components are not removed from ELVs prior to their recycling, because car recycling processes are currently optimized to recover basis metals such as Fe, Al or Cu. In order to improve the performance of the recovery of CRM and precious metals from vehicles, the measure requires the removal of selected electronic components embedded in vehicles in order to recycle them separately in e-waste recycling facilities, which are optimized for precious metals recovery. Electronic components recycling infrastructure is already well established in Europe. Initial JRC analysis shortlisted the following components to be dismantled prior to shredding:

·Inverter (for EVs);

·Control module/valve box of automatic transmission;

·Infotainment control unit (sound, navigation and multimedia).

The JRC analysis reports the analysis of impacts of embedded electronic components; see Table 21 of the JRC report for potential secondary raw material produced from each assessed category, see table 22 of the JRC report on the environmental impacts of the recycling of each assessed category, see figure 9 of the JRC report on the cost distribution over waste management operators, assessed per category of EEC). Afterwards, the shortlisting rational is introduced and the potential additional benefits at EU level of the three components are presented in Table 15. .

As also stated in the additional opportunistic benefits linked to the removal and collection of EVs batteries (covered by the Battery Regulation), near-by components would be more accessible after such removal, leading to a decreased allocated ATF costs related to their treatment and removal. The inverter (for EVs) is positively affected by this synergy and its related removal costs would decrease thanks to the removal of EVs battery.

Table 15.5: Potential additional benefits of the shortlisted components, calculated at EU level

15.2.415.2.4    Measure 4: Request of information from OEMs on specific CRMs contained in vehicles, and their labelling:

Linked to the option PO1A – M3 – A7.2.1

The measure on declaration of CRMs has already been applied previously in the context of eco-design regulations, in particular on requirements for servers and data storage products 198 : this regulation requests (in Annex II, section 3.3) manufacturers to declare compulsory information on CRMs content (mainly Cobalt and Neodymium) at component level. This measure was introduced to address the lack of information on present CRMs in the targeted products and to provide relevant information for recyclers to decide to disassemble such components materials and invest in recovery infrastructure, and for policy makers to take further measures in the future building on solid knowledge.

Considering the previous experience on servers and data storage products, a similar measure can be applied to REEs at REPM level of e-drive motors and Ga in size fixed controller category in order to address the same lack of information. The assessment of the impacts of this measure presented in this section is largely based on the assessment presented in the Impact Assessment of the Eco-design regulation proposal for enterprise servers.

It was stated in the SWD on servers and data storage products that 199 , once separated, Nd scrap can be further processed to recover the CRM. Due to the different types and sizes of e-drive motor technologies available in the EU market, a mandatory information requirement at this component level could inform on the presence, location and the exact amount of the targeted CRMs that the e-drive motor contains, and this would encourage the separation at early stages of disassembly in the authorised treatment facilities. Similar mandatory information requirement could be applied to Ga content at controllers’ level larger than 10 cm2 and sensors. A previous JRC study had mentioned the lack of information on the use of this CRM in vehicles, in particular Ga 200 . Additionally to the initial assessment on information on weight and location of REEs in e-drive motors, further requested information on number of permanent magnets, their coating and whether gluing was used in their assembly within the rotor could significantly increase the dismantler and recycler knowledge to adapt the necessary operations to efficiency extract the permanent magnets from the e-drive motor.

The available standards on material efficiency, including those developed under CEN/CLC/JTC 10 201 (e.g EN 45558 - General method to declare the use of CRMs in energy-related products) could also be used to ease the enforcement of this requirement at e-drive motor level.

Labelling parts or products with specific material content (to ease its depollution or sorting) would in principle incentivise the dismantling and separate collection of the e-drive motor at authorised treatment facilities.

As for expected economic impacts, no costs for transposition into national legislation is foreseen since the form of the envisaged legislation is an EU regulation (linked to 3R type-approval). The estimated compliance costs for OEMs would be mainly concentrated in reporting and documentation delivery from supplier to OEMs. Since the automotive industry is already equipped with material and component communication channels (e.g. IMDS, IDIS), costs of compliance are estimated to be limited. From EoL value chain perspective, additional costs could be related to the search of relevant information in documentation but in principle these would largely be compensated by additional revenues from the sales of CRMs. The estimated overall additional costs for ATFs and recyclers are then supposed to be low to medium. This measure adapted to the e-drive motors would increase ATFs and recyclers knowledge on this component and it is likely to increase recycling, reuse, and remanufacturing actions as well as relevant investment in recovery infrastructure.

It is estimated that limited additional direct socio-economic and environmental benefits would be generated from the implementation of this measure 4 (linked to M3). However, it is expected that the quality of treatment and of output flows of secondary raw materials (hence of value) that will be generated by measures 1 (linked to M13a) and 2 (linked to M7) on e-drive motors and the measure 3 (linked to M13b) on selected EEC components is likely to be enhanced thanks to this measure on CRM information request. It is also unlikely that this requirement would impact negatively job creation. This measure is not intended to hinder innovation and the development of new technologies.

15.3Suggestions for follow-up review clauses on CRM measures for vehicles

The measures presented in this report could in the future be complemented by others, to be potentially mentioned in review clauses. Follow-up (potentially more ambitious) measures might tackle further circularity failures by addressing other CRMs and components (e.g. Ga or Ti) when more data are available, or by introducing new targets (e.g. recycled content or recycling efficiency for REEs or Mg) when initial recycling infrastructures will be operational in the EU. These pre-requisites would be necessary to trigger CRM recycling and thrive investments as well as innovation in the automotive sector.

15.4Additional contribution of the potential extension of scope to circularity of CRMs

As mentioned in the main SWD document, the ELV and Type-Approval directives apply to passenger and light commercial vehicles; M1 and N1, respectively. It was stated that 85% of the EU vehicles fleet falls within the current scope of the ELV/Type-Approval directives. The remaining is therefore not covered and represents circa. 52 million vehicles that include trucks (lorries), busses, two- and three- wheelers, estimated in the core document to account 4.13 million tons of materials. In the context of ensuring higher circularity of vehicles and ensuring alignment with the circularity objectives of the CRM Act, the present section provides additional information, from a CRM perspective, to support the possibility of including additional vehicles within the scope of the ELV/Type-Approval; namely lorries, buses and motorcycles (two- or three wheelers).

15.4.115.4.1    Evidence on CRM content in lorries, buses and motorcycles:

Newest environmental standards and constraints for heavy-duty vehicles (EU 2019/1242) and EURO 6/7 standards will require the integration of additional technology devices in vehicles to ensure alignment with 2025 and 2030 targets 202 . These controllers included in vehicles would lead to the increase of specific CRMs in vehicles. For instance, controllers would be included for exhaust gas control, leading to more Cu or Pd/Pt in vehicles. The electrification or hybridization of the power train to reduce CO2 emissions would also increase contents of Cu, Si-steel, REPM and others CRMs in these vehicles. While an average passenger BEV is equipped with one e-drive motor of 45 kg and an average peak of 100 kW, an electric truck drivetrain could afford multiple e-drive motors and reach for instance a peak power of 490 kW 203 . This would lead to the significant increase of numbers and mass of e-drive motors in the truck drivetrain. Volvo FH electric drivetrain is for example equipped with 2 to 3 electric motors, the Tesla Semi is also propelled using three e-drive motors, similar to those used in Tesla model 3. The introduction of electric lorries, buses and motorcycles will also increase CRM content in batteries, especially lithium, nickel and cobalt 204 . It is also estimated that PGM average content in lorries will raise by 30%, with palladium covering the major share of PGM used in automotive applications (compared to platinum and rhodium 205 ). Pd content in a class 7/8 heavy duty truck catalyst can be up to 60g 206 , 207 . Assuming same Pd content for buses, and considering EoL vehicles from these two categories, the untapped potential of Pd in EoL vehicles from these two vehicle categories is presented below in Table 15.6.

Table 15.6: Untapped recovery potential of Pd from lorries and buses catalysts, calculated at EU level

Source: EoL data from IA main study, Pd content from World Platinum Investment Council (March, 2020)

Pd is widely used in catalytic converters and to a lesser extent in vehicle electronics. The automotive industry (all vehicle categories) is the largest consumer of Pd, covering more than 80% of supply annually.

In order to ensure higher performances, OEMs are also relying on REPM motors for heavy vehicles, leading to the use of Rare Earth elements and Si-steel laminates in the engine. Based on IDTechEx benchmark on electric motors used in vehicles, most of e-lorries (all types of truck), e-buses and electric two-wheelers are propelled with permanent magnet motors, relying heavily on laminated Si-steel and also rare earth materials, see Table 15.7.

 Table 15.7: Motor types in vehicles (e-lorries, e-buses and electric two-wheelers) and main CRMs used

Source: IDTechEx, 2021

Consequently, more CRMs are expected to be used in electric motors for hybrid and electric trucks, buses and motorcycles. This includes REE materials (Neodymium and Dysprosium) but also Si-steel, Terbium, Niobium and also Cobalt. The fleet electrification would also generate an increase of electric and electronic devices (e.g. inverter), leading to the increase of copper, precious metals (gold and silver) and PGM, as stated in the JRC report.

Besides, electric infrastructure would lead to higher CRMs demand, with a slightly higher demand for truck infrastructure, compared to passenger vehicles ones. Infrastructure includes charging station, post and connexions to the grid, as modelled by Raghavan et al. 208 . Other scenarios illustrated by the latter reference also describe higher metal demands for hydrogen fuel cell electric cars and trucks implying significant demand for PGMs.

Thus, these vehicles categories contain relevant CRMs in their drivetrain, electric and electronic devices, with an even higher content for trucks and buses due to the increase of their overall weight and the multiplication of e-drive motors used to reach higher performances. These vehicles also contain significant shares of steel and aluminium in their bill of materials.

15.4.215.4.2    Challenges on CRM recovery from the extended scope, including export and miss-management:

As stated in the main document (see section 2.4 Problem area 4), these vehicles do not currently abide by specific legal requirements on their design or end-of-life phases, leading in principle to the loss of important share of secondary raw materials, including CRMs. Main circularity failures are related to:

·Design phase: circularity or design for recycling are not necessarily integrated as a requirement in the design of these vehicles. In addition, lack of information of CRM content and location in these vehicles could prevent EU dismantlers and recyclers to properly recover these materials from collected vehicles.

·Collection phase: the main challenge is related to the absence of structured and professional end of life value chain to properly collect and manage end of life vehicles such as truck, buses 209 . Main EU authorised treatment facilities (ATFs) are generally designed to collect and treat M1 and N1 vehicle categories. They do not treat two- and three- wheelers neither. This failure compromises circularity and guaranteed environmentally sound management of waste stemming from these vehicles. This failure is also worsened by the export trends of end of life trucks and buses from EU to third part countries, leading to the loss of significant amount of materials from Europe (estimated to be up to 4.13 million in 2019). Current ATF facilities are certainly not prepared to appropriately treat these vehicles and recover CRMs. Collection of e-motorbikes is currently not established and will benefit from the collections targets for Light Means of Transport (LMT) proposed by the battery regulation.

·Recovery phase: the absence of reuse and/or recycling incentives of these vehicles prevent the proper reuse and recycling of parts and materials, including CRMs. These vehicles are also likely to be mainly exported outside Europe at their end of life.

15.4.315.4.3    Expected impacts of initial CRM measures for passenger cars in case of the proposed extension to new vehicles (lorries/buses/2-wheelers):

A wider scope covering new vehicles such as lorries, buses and motorcycles will mathematically increase the fleet size targeted by the ELV/3RTA directives, and mathematically increase number and mass of CRM-rich components potentially targeted. This could in principle lead to the development or creation of new business models in EU internal markets, but also reduce environmental hazards stemming from these EoL vehicles.

From a CRM perspective, the extension of vehicle scope to lorries, buses and motorcycles would enhance the transition to a circular economy and improve the performances of measures (see above) already assessed for passenger vehicles, which are:

-Measure 1: mandatory removal of e-drive motors by authorised treatment facilities, linked to the option PO3A, M13a:

This measure can be strongly impacted by the scope extension , as the number of e-drive motors covered would significantly increase, leading in principle to a linear increase of impacts assessed for passenger vehicles e-drive motors.

As the majority of motor types of the new scope are based on several permanent magnet motors with REPM, it is expected an increase of secondary raw materials (REPM materials, Si-steel, copper and aluminium) production from this measure. The increase of e-drive motor’s flow size could also in principle increase reuse flows. Both recycling and reuse flows are expected to contribute to the reduction of supply disruptions and to the EU strategic autonomy.

From a socio-economic perspective, a scope extension would increase the number of motors targeted, leading to similar impacts assessed for passenger vehicles, but with a higher extent.

Assuming:

·that the extension of scope would increase the number of vehicles collected by 15%,

·that trucks and lorries contain significant number of REPM motors,

It can be then assumed that at least 17.5% (=15%/85%) of additional REPM motors and additional mass of CRMs would be collected and treated (JRC rough estimates).

Additionally, a positive synergy is foreseen with batteries removal obligations described in the Battery Regulation. This would lead to a cost optimisation at ATF level of batteries near-by components, hence reducing e-drive motors removal costs.

-Measure 2: design provisions for e-drive motors, linked to the option PO1B, M7:

The new scope to be covered by eco-design requirement would increase dismantlers and recyclers capacity to effectively manage e-drive motors from the extended scope. A better design that facilitates disassembly operations of e-drive motors will decrease removal and disassembly times as well as the optimisation of ATF costs, leading to even further optimised impacts of the measure 1 (PO3A, M13a).

-Measure 3: mandatory removal of selected small parts by authorised treatment facilities, linked to the option PO3B, M13b:

Similarly to measure 1, and based on the expected electrification of the new scope, an increased flow of copper, PGM and precious metals are expected to be recovered, especially from lorries and buses. Thus, a very positive contribution is also foreseen in case of scope extension. The inverter removal from EVs would also in principle benefit from removal obligations of batteries described in the Battery Regulation, hence reducing its removal costs at ATF level from the extended scope.

-Measure 4: request of information from OEMs on specific CRMs contained in targeted vehicles, and their labelling, linked to the option PO1A, M3:

As most of motor types included in the scope extension are REPM materials, providing information on location, content and characteristics of REEs in e-drive motors would significantly increase dismantlers and recyclers information and support their decision on rare earth permanent magnet proper end of life management.

An increase of scope’s size would have the same expected impacts as assessed for passenger vehicles, both for REE in e-drive motors and Ga in controllers.

15.4.415.4.4    Additional Expected impacts of the proposed extension the current legislation to new vehicles (lorries/buses/2-wheelers) to the recovery of CRM and the implementation of the CRM Act objectives:

Additional measures assessed in the main document could also support further recovery of CRM in case of scope extension to lorries, buses and motorcycles. Main additional benefits are linked to:

-Requirements for manufacturers to provide additional information to dismantlers/recyclers on recycling/dismantling (M28):

Similarly to the analysis of impacts of measure 4 for passenger cars (linked to M3), this measure is strongly linked to the improved circular design of vehicles under the scope of the ELV/3RTA directives. It is expected an improved dismantler and recycler knowledge on CRM based parts, their location, CRM content characteristics and the relevant information to properly dismantle and recycle CRM from wastes stemming from these vehicles. This measure is also in strong synergy with M30a, should these vehicles need to be properly treated in authorised treatment facilities.

-Mandatory treatment of End of Life vehicles in authorised treatment facilities (M30a):

The implementation of EURO 6 rules should in principle decrease the export of lorries and buses to third part countries, leading to the increase of wastes stemming from these vehicles in the EU. This would develop new business models related to the end of life management of these vehicles to properly collect and treat them. It is unsure if the current authorised treatment facilities would be able to collect and treat large sized vehicles such as lorries and trucks, as they are more designed for the treatment of M1 and N1 vehicles. It is expected in short terms a higher additional investments at ATF level to ensure their capacity to receive and treat lorries and buses. If new types of ATF are to be created, they will have to fully consider the novel CRM components of these types of vehicles. However, the expected impacts of this scope extension will lead to higher material recovery from wastes stemming from these vehicles as well as the increase of CRM flows available for recycling. It is also expected an additional jobs created at waste management operators level and also an increase of their revenues related to the management of materials stemming from this new scope. Similarly to measure 1 for passenger cars (linked to M13a), a positive cost-revenue ratio is foreseen in the medium-long terms, as new business model related to this scope extension should emerge.

The CRM Act is clearly supporting actions on CRM recovery to be included in the revision of the ELV/3RTA directives, based on its current scope (limited to M1 and N1 vehicles). In overall terms, a scope extension to lorries, buses and motorcycle would lead to a higher circularity of CRMs contained in these vehicles. It would also ensure the implementation of CRM Act objectives related to the design and recycling of CRM from all vehicle categories. These vehicles, if properly treated in authorised treatment facilities including through mandatory separate dismantling and recovery of selected CRM-rich parts prior to shredding and supported by an increased knowledge of CRM content would in principle contribute to reach the CRM Act 15% recycling targets aimed. It should also in principle support reuse flows and the creation of secondary markets for (CRM) parts in the EU.

The scope extension of the ELV/3RTA directive would then be inclusive and encourage the setting-up of up-to-date treatment and recovery facilities for these vehicles and contribute to the development of CRM value chains in Europe.

(1)

 TEC; in the current legal state, the wording corresponding to Article 175 TEC is expressed in Article 192 TFEU.

(2)

Council Directive 70/156/EEC of 6 February 1970 on the approximation of the laws of the Member States relating to the type-approval of motor vehicles and their trailers (OJ L 42, 23.2.1970, p. 1–15).

(3)

OJ L 310, 25.11.2005, p. 10.

(4)

In the current legal state, the wording corresponding to Article 95 TEC is expressed in Article 114 TFEU.

(5)

 OJ L 151, 14.6.2018, p. 1.

(6)

 Proposal for a Regulation of the European Parliament and of the Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020 (COM/2023/160 final).

(7)

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A secure and sustainable supply of critical raw materials in support of the twin transition (COM(2023) 165 final).

(8)

Permanent magnet types addressed by CRM Act are: Neodymium-Iron-Boron; Samarium-Cobalt; Aluminium-Nickel-Cobalt; Ferrite. All of described obligations stemming from CRM Act, except for labelling of product containing the magnet specifying its type, do not apply to ferrite permanent magnets.

(9)

Articles 27(9) and 27 () of CRM Act.

(10)

Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of ecodesign requirements for energy-related products (OJ L 285, 31.10.2009, p. 10–35).

(11)

Proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting eco-design requirements for sustainable products, amending Regulation (EU) 2019/1020 and repealing Directive 2009/125/EC (COM/2022/142 final).

(12)

Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, amending Regulations (EC) No 715/2007 and (EC) No 595/2009 and repealing Directive 2007/46/EC (OJ L 151, 14.6.2018, p. 1–218).

(13)

Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 (OJ L 218, 13.8.2008, p. 30–47).

(14)

Decision No 768/2008/EC of the European Parliament and of the Council of 9 July 2008 on a common framework for the marketing of products, and repealing Council Decision 93/465/EEC (OJ L 218, 13.8.2008, p. 82–128).

(15)

Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, amending Regulations (EC) No 715/2007 and (EC) No 595/2009 and repealing Directive 2007/46/EC, (OJ L 151 14.6.2018, p. 1).

(16)

Proposal for a regulation on type-approval of motor vehicles and engines and of systems, components and separate technical units intended for such vehicles, with respect to their emissions and battery durability (Euro 7) (COM(2022) 586).

(17)

 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner air for Europe (OJ L 152, 11.6.2008, p. 1).

(18)

Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312 22.11.2008, p. 3).

(19)

Commission Implementing Decision (EU) 2019/1004 of 7 June 2019 laying down rules for the calculation, verification and reporting of data on waste in accordance with Directive 2008/98/EC of the European Parliament and of the Council and repealing Commission Implementing Decision C(2012) 2384 (notified under document C(2019) 4114).

(20)

Directive 2006/66/EC of the European Parliament and of the Council of 6 September 2006 on batteries and accumulators and waste batteries and accumulators and repealing Directive 91/157/EEC (OJ L 266, 26.9.2006, p. 1–14).

(21)

Regulation of the European Parliament and the Council of [date] 2023 concerning batteries and waste batteries, amending Directive 2008/98/EC and Regulation (EU) 2019/1020 and repealing Directive 2006/66/EC (OJ L […]).

(22)

Interinstitutional file: 2020/0353 (COD).

(23)

Article 6(2) of the Batteries Regulation states: “In addition to the restrictions set out in Annex XVII of Regulation (EC) No 1907/2006 and in Annex II of Directive 2000/53/EC, batteries shall not contain substances for which Annex I contains a restriction unless they comply with the conditions of that restriction”.

(24)

Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste (OJ L 190, 12.7.2006, p. 1).

(25)

Proposal for a Regulation of the European Parliament and of the Council on shipments of waste and amending Regulations (EU) No 1257/2013 and (EU) No 2020/1056 (COM/2021/709 final).

(26)

Cf : https://ec.europa.eu/environment/pdf/waste/shipments/correspondents_guidelines9_en.pdf  

(27)

Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC (OJ L 396 30.12.2006, p. 1).

(28)

It will be similar as the assessment used when evaluating applications for authorisation under REACH.

(29)

 Regulation (EU) 2019/1021 of the European Parliament and of the Council of 20 June 2019 on persistent organic pollutants (OJ L 169, 25.6.2019, p. 45–77).

(30)

More information on the Stockholm Convention on Persistent Organic Pollutants http://www.pops.int/TheConvention/Overview/TextoftheConvention/tabid/2232/Default.aspx  

(31)

Regulation (EU) 2022/2400 of the European Parliament and of the Council of 23 November 2022 amending Annexes IV and V to Regulation (EU) 2019/1021 on persistent organic pollutants (OJ L 317, 9.12.2022, p. 24–31).

(32)

Directive 2011/65/EU of the European Parliament and of the Council of 8 June 2011 on the restriction of the use of certain hazardous substances in electrical and electronic equipment (OJ L 174, 1.7.2011, p. 88–110).

(33)

Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1–17).

(34)

Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles, and repealing Regulations (EC) No 443/2009 and (EU) No 510/2011 (OJ L 111, 25.4.2019, p. 13–53).

(35)

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new passenger cars and new light commercial vehicles in line with the Union’s increased climate ambition (COM/2021/556 final).

(36)

  Paris Agreement (OJ L 282, 19.10.2016, p. 4).

(37)

 Regulation (EU) 2019/1242 of the European Parliament and of the Council of 20 June 2019 setting CO2 emission performance standards for new heavy-duty vehicles and amending Regulations (EC) No 595/2009 and (EU) 2018/956 of the European Parliament and of the Council and Council Directive 96/53/EC (OJ L 198, 25.7.2019, p. 202–24).

(38)

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2019/1242 as regards strengthening the CO₂ emission performance standards for new heavy-duty vehicles and integrating reporting obligations, and repealing Regulation (EU) 2018/956 (COM(2023) 88 final).

(39)

 Council Directive 1999/37/EC of 29 April 1999 on the registration documents for vehicles (OJ L 138, 1.6.1999, p. 57–65).

(40)

Commission Decision 2005/293/EC of 1 April 2005 laying down detailed rules on the monitoring of the reuse/recovery and reuse/recycling targets set out in Directive 2000/53/EC of the European Parliament and of the Council on end-of-life vehicles (OJ L 94, 13.4.2005, p. 30–33).

(41)

  Tougher vehicle testing rules to save live (europa.eu) , Vehicle safety – revising the EU’s roadworthiness package (europa.eu)

(42)

Directive 2014/45/EU of the European Parliament and of the Council of 3 April 2014 on periodic roadworthiness tests for motor vehicles and their trailers and repealing Directive 2009/40/EC (OJ L 127, 29.4.2014, p. 51–128) and Directive 2014/47/EU of the European Parliament and of the Council of 3 April 2014 on the technical roadside inspection of the roadworthiness of commercial vehicles circulating in the Union and repealing Directive 2000/30/EC (OJ L 127, 29.4.2014, p. 134–218).

(43)

Directive (EU) 2019/1161 of the European Parliament and of the Council of 20 June 2019 amending Directive 2009/33/EC on the promotion of clean and energy-efficient road transport vehicles (OJ L 188, 12.7.2019, p. 116–130).

(44)

Recital 20.

(45)

  Directive 2005/64/EC on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability.

(46)

  Council Directive 70/156/EEC on the approximation of the laws of the Member States relating to the type-approval of motor vehicles and their trailers.

(47)

  Directive 2000/53/EC on end-of life vehicles.

(48)

  Regulation (EU) 2018/858 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.

(49)

  COM(2019) 640 final , The European Green Deal.

(50)

  COM(2020) 98 final , A new Circular Economy Action Plan.

(51)

  COM(2020) 102 final , A New Industrial Strategy for Europe, COM(2021) 350 final , Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery.

(52)

  SWD(2021) 60 final Commission Staff Working Document Evaluation of Directive (EC) 2000/53 on end-of-life vehicles.

(53)

  https://ec.europa.eu/info/sites/default/files/br_toolbox_-_nov_2021_-_chapter_6.pdf  

(54)

Baron, Y.; Kosińska-Terrade, I.; Loew, C.; Köhler, A.; Moch, K.; Sutter, J.; Graulich, K.; Adjei, F.; Mehlhart, G.: Study to support the impact assessment for the review of Directive 2000/53/EC on End-of-Life Vehicles by Oeko-Institut, June 2023.

(55)

The fourteen-week public stakeholder consultation was carried out between 20 July and 26 October 2021 as well as an extensive targeted stakeholder consultation carried out late 2021 and early 2022, stakeholder workshops and Member State meetings in March 2022, and extensive desk research.

(56)

Light Shredder Residue are all the light fractions left over from recycling ELVs. This material contains many different materials: plastics, rubber, glass, sand, textiles, wood, metals, and others.

(57)

The treatment of exhaust gas of waste incinerators was less developed at that time.

(58)

COM(2004) 162 final.  Proposal for a Directive on the type-approval of motor vehicles with regard to their re-usability, recyclability and recoverability and amending Council Directive 70/156/EEC.

(59)

  ISO 22628:2002 on Road vehicles — Recyclability and recoverability — Calculation method.

(60)

In this respect, most of the component parts listed as non-reusable cannot be tested on new vehicle types because the test procedures already required destructive or durability tests to be performed on several samples.

(61)

At the time of the proposal of the 3R Directive, Euro 3 was in the process of being revised for the purpose of Euro 4.

(62)

  Commission Directive 96/37/EC of 17 June 1996 adapting to technical progress Council Directive

74/408/EEC relating to the interior fittings of motor vehicles (strength of seats and of their anchorages)

OJ L 186, 25.7.1996, p. 28.

(63)

  Commission Directive 2009/1/EC of 7 January 2009 amending, for the purposes of its adaptation to technical progress, Directive 2005/64/EC of the European Parliament and of the Council on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability.

(64)

See footnote 8.

(65)

This approximation of the cumulative number of registered vehicles conform to the 3R Directive does not consider new vehicles conform to the Directive before July 2010 and/or early termination of new vehicles conform with the Directive.

(66)

  ACEA, 2022. Size and distribution of the EU vehicle fleet; ACEA, 2022. Passenger car registrations in Europe 1990-2021, by country; ACEA, 2022. Vehicles in use Europe 2011-2021.

(67)

See footnote 27 (ACEA data).

(68)

  Eurostat, 2021.  End-of-life vehicle statistics.

(69)

The only exception being Croatia, which only became a Member State in 2013 and transposed the Directive 2009/1/EC in 2011.

(70)

Based on information from https://eur-lex.europa.eu/legal-content/EN/NIM/?uri=celex:32005L0064 and https://eur-lex.europa.eu/legal-content/EN/NIM/?uri=CELEX:32009L0001 .  

(71)

  Automobilwoche, 2007.  Audi erfüllt als erster EU-Richtlinie zum Recycling.

(72)

  KBA, 2022. Designated test laboratories (EU).

(73)

  Ministerium für Landwirtschaft und Umwelt (sachsen-anhalt.de) (pp. 10-11).

(74)

Linked to the ELV Directive definition under Article 2(7): “‘recycling’ means the reprocessing in a production process of the waste materials for the original purpose or for other purposes but excluding energy recovery. Energy recovery means the use of combustible waste as a means to generate energy through direct incineration with or without other waste but with recovery of the heat.”

(75)

This observation is based on documents submitted as examples of type-approval submissions by a Type-approval Authority), and confirmation with other stakeholders (Member State Type-approval Authorities).

(76)

See Evaluation of Directive (EC) 2000/53 of 18 September 2000 on end-of-life vehicles SWD(2021) 61 final, section 5.1.

(77)

According to the definition in the 3R Directive, strategy’ means a large-scale plan consisting of coordinated actions and technical measures to be taken as regards dismantling, shredding or similar processes, recycling and recovery of materials to ensure that the targeted recyclability and recoverability rates are attainable at the time a vehicle is in its development phase.

(78)

This is an industry-led platform for the exchange of manufacturer-compiled information to promote the environmental treatment of End-of-Life-Vehicles, safely and economically (see: IDIS | The International Dismantling Information System (idis2.com) ).

(79)

ACEA “want to point out that, for the necessary new and innovative materials for achieving the ambitious goals of targeted carbon neutrality by 2050, there might not yet be available appropriate recycling technologies for vehicles on an industrial scale.”

(80)

The nominal values of the 3R rates are the same (85% for reuse (reusability) and/or recycling (recyclability) and 95% reuse (reusability) and/or recovery (recoverability), although the targets have distinct meanings and carry different consequences for authorities and economic operators (cf. answer to evaluation question 1).

(81)

Council Directive 92/61/EEC of 30 June 1992 relating to the type-approval of two or three-wheel motor vehicles (repealed by Directive 2002/24/EC, again repealed by Regulation (EU). No 168/2013 of the European Parliament and of the Council of 15 January 2013 on the approval and market surveillance of two- or three-wheel vehicles and quadricycles).

(82)

2003/138/EC: Commission Decision of 27 February 2003 establishing component and material coding standards for vehicles pursuant to Directive 2000/53/EC of the European Parliament and of the Council on end-of-life vehicles.

(83)

 Waste Framework Directive, Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312, 22.11.2008, p. 3) as last amended by Directive (EU) 2018/852 of the European Parliament and of the Council of 30 May 2018 (OJ L 150, 14.6.2018, p. 141).

(84)

  https://group.renault.com/en/news-on-air/news/circular-economy-moving-up-a-gear/  

(85)

  Circular economy: sustainable into year 2040 | BMW.com

(86)

Maury, T., Tazi, N., Torres De Matos, C., Nessi, S., Antonopoulos, I., Pierri, E., Baldassarre, B., Garbarino, E., Gaudillat, P. and Mathieux, F., Towards recycled plastic content targets in new passenger cars, EUR 31047 EN, Publications Office of the European Union, Luxembourg, 2022, ISBN 978-92-76-51784-9 (online), doi:10.2838/834615 (online), JRC12900.

(87)

Baron, Y.; Kosińska-Terrade, I.; Loew, C.; Köhler, A.; Moch, K.; Sutter, J.; Graulich, K.; Adjei, F.; Mehlhart, G.: Study to support the impact assessment for the review of Directive 2000/53/EC on End-of-Life Vehicles by Oeko-Institut, June 2023.

(88)

This includes impacts for OEMs on the one side and for Type approval service providers who provide support in the preparation of documentation for type approval (the latter can be considered similar to certification bodies). One type approval service provider gave information as part of an interview with a Member State (MS) type approval authority. Others did not participate. Input was furthermore provided to consultation efforts in the form of answers to survey questions: OEMs were interviewed, 1 OEM provided answers to the survey confidentially and an association also provided general input in writing, however not answering the survey questions.

(89)

Data is based on input form 5 MS Type approval Authorities that participated in stakeholder consultation activities based on a survey of questions. One MS was interviewed, three provided the filled-out survey, 1 provided short input per email, relating to the survey but only to a few of the aspects addressed therein.

(90)

Based on a survey of MS Type approval authorities, it is not clear whether these fees apply only to 3R Type approvals or have a different scope – one MS specified only one fee while another gave different fees but said not to have done and 3R ones: Some MS have not performed any TAs since Directive 2005/64/EC came into force (e.g., Latvia, Finland) but do report on Regular TAs for second stage of N vehicles. Some perform 3R Type approvals regularly.

(91)

This applies to the base vehicle which is affected by the 3R Type approval. In the case of second stage type approvals this may differ as the vehicle may change at different stages of its lifetime, however this is understood to be out of scope of this review.

(92)

  https://cordis.europa.eu/project/id/730456  

(93)

  https://cordis.europa.eu/project/id/820895  

(94)

  https://cordis.europa.eu/article/id/128556-new-industrial-sorting-systems-based-on-laser-spectroscopy-libs-magnetic-induction-and-machin  

(95)

  https://cordis.europa.eu/article/id/86900-simpler-structures-for-improved-auto-recycling  

(96)

  https://cordis.europa.eu/project/id/717514  

(97)

  https://cordis.europa.eu/project/id/605195  

(98)

  https://cordis.europa.eu/project/id/790321  

(99)

  X-ray sensor for the recognition of polymer type, additive and fillers in black and coloured plastics for recycling and analysis | SELEX Project | Fact Sheet | H2020 | CORDIS | European Commission (europa.eu)

(100)

  https://cordis.europa.eu/project/id/101006631  

(101)

  https://cordis.europa.eu/project/id/101006888  

(102)

  https://cordis.europa.eu/project/id/101003587  

(103)

  https://cordis.europa.eu/project/id/820695  

(104)

  https://cordis.europa.eu/project/id/776517  

(105)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/3968  

(106)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/3397  

(107)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/3343  

(108)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/5357  

(109)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/4685  

(110)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/4241  

(111)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/4918  

(112)

  https://webgate.ec.europa.eu/life/publicWebsite/project/details/5682  

(113)

  https://cordis.europa.eu/project/id/603676  

(114)

  https://cordis.europa.eu/project/id/101058522  

(115)

See tool #23 in https://commission.europa.eu/law/law-making-process/planning-and-proposing-law/better-regulation/better-regulation-guidelines-and-toolbox/better-regulation-toolbox_en  

(116)

See as well as Annex 4.

(117)

See the supporting study for the impact assessment, which refers to data collected in 2014 according to which 350 shredders are established in the EU. According to Eurostat, there are shredders equipped for ELVs in all EU Member States except Luxembourg and Malta.

(118)

Annual detailed enterprise statistics for trade (NACE Rev. 2 G) [SBS_NA_DT_R2__custom_4698656]

(119)

  End-of-life vehicles: evaluation of the ELV Directive published (europa.eu)

(120)

  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12633-End-of-life-vehicles-revision-of-EU-rules_en  

(121)

https://cor.europa.eu/en/our-work/Pages/Fit-for-Future-opinion-on-End-of-life-vehicles-and-3R-type-approval.aspx

(122)

  https://egaranet.org/  

(123)

  https://aetrac.org/  

(124)

  https://www.fnade.org/fr  

(125)

  https://www.mobilians.fr/  

(126)

  https://fna.fr/  

(127)

  https://www.gremirecuperacio.org/sobre-nosotros/  

(128)

  https://www.autopurkamoliitto.fi/  

(129)

  https://www.demontagroup.cz/  

(130)

  https://www.bdsv.org/der-verband/  

(131)

  https://ec.europa.eu/regional_policy/index.cfm/en/funding/accessing-funds/

(132)

  https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility_en  

(133)

  https://commission.europa.eu/publications/guidance-recovery-and-resilience-plans-context-repowereu_en  

(134)

  https://ec.europa.eu/info/strategy/recovery-plan-europe_en  

(135)

  https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-and-open-calls/horizon-europe_en  

(136)

  https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1122  

(137)

Regulation (EU) 2021/783 of the European Parliament and of the Council of 29 April 2021 establishing a Programme for the Environment and Climate Action (LIFE), and repealing Regulation (EU) No 1293/2013 (OJ L 172, 17.5.2021, p. 53–78).

(138)

See “The EIB Circular Economy Guide Supporting the circular transition”, published in 2020 and available at: https://www.eib.org/attachments/thematic/circular_economy_guide_en.pdf  

(139)

  https://www.eif.org/  

(140)

  https://investeu.europa.eu/what-investeu-programme/investeu-fund_en  

(141)

  https://een.ec.europa.eu/about-enterprise-europe-network  

(142)

  https://www.mckinsey.com/~/media/mckinsey/industries/automotive%20and%20assembly/our%20insights/a%20long%20term%20vision%20for%20the%20european%20automotive%20industry/race-2050-a-vision-for-the-european-automotive-industry.pdf  

(143)

https://www.acea.auto/figure/world-motor-vehicle-production/

(144)

  https://www.acea.auto/figure/eu-motor-vehicle-production-by-type/  

(145)

  https://www.acea.auto/figure/eu-passenger-car-production/  

(146)

  https://www.acea.auto/figure/eu-motor-vehicle-trade-by-vehicle-type-in-units/  

(147)

In 2021, the EU imported 458,769 passenger cars from Turkey, followed by China (435,080) and Japan (401,276). More information available at: https://www.acea.auto/figure/eu-motor-vehicle-imports-main-countries-of-origin-in-units/

(148)

Maury, T., Tazi, N., Torres De Matos, C., Nessi, S., Antonopoulos, I., Pierri, E., Baldassarre, B., Garbarino, E., Gaudillat, P. and Mathieux, F., Towards recycled plastic content targets in new passenger cars, EUR 31047 EN, Publications Office of the European Union, Luxembourg, 2023, ISBN 978-92-76-51784-9 (online), doi:10.2838/834615 (online), JRC129008.

(149)

Ibid.

(150)

Article 6(5) of the current 3R type-approval Directive.

(151)

  https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32019R2144  

(152)

  https://climate.ec.europa.eu/eu-action/transport-emissions/road-transport-reducing-co2-emissions-vehicles/car-labelling_en  

(153)

Proposal for a Regulation on type-approval of motor vehicles with respect to their emissions and battery durability (Euro 7) COM(2022) 586 final

(154)

https://www.acea.auto/figure/interactive-map-automobile-assembly-and-production-plants-in-europe/

(155)

  https://www.bmw.com/en/magazine/sustainability/circularity-at-bmw.html  

(156)

  https://www.press.bmwgroup.com/global/article/detail/T0403390EN/revolution-in-the-car-industry:-parts-made-from-recycled-fishing-nets?language=en  

(157)

Stellantis N.V. is a multinational automotive manufacturing corporation formed in 2021 on the basis of a 50–50 cross-border merger between the Italian-American conglomerate Fiat Chrysler Automobiles and the French PSA Group.

(158)

  https://www.reuters.com/business/autos-transportation/stellantis-set-boost-recycled-material-content-vehicles-2022-10-11/  

(159)

https://www.toyota-europe.com/sustainability/circularity#:~:text=Recycling%20of%20Plastics,free%20interiors%20by%20that%20time .

(160)

  https://corporate.ford.com/articles/sustainability/recycling-plastic-water-bottles.html  

(161)

  https://www.volvocars.com/intl/v/sustainability/circular-economy  

(162)

  https://waste-management-world.com/artikel/automotive-industry-develops-new-guidance-for-measuring-recycled-content-of-automotive-products/  

(163)

  https://www.asiafinancial.com/china-carbon-market-expansion-delayed-caijing  

(164)

  http://english.www.gov.cn/policies/policywatch/202107/08/content_WS60e639b0c6d0df57f98dc92b.html  

(165)

  https://pib.gov.in/newsite/PrintRelease.aspx?relid=194359  

(166)

  https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3661  

(167)

https://ustr.gov/sites/default/files/files/reports/2021/2021 Trade Agenda/Online PDF 2021 Trade Policy Agenda and 2020 Annual Report.pdf

(168)

  https://www.conseil-national-industrie.gouv.fr/files_cni/files/csf/mines-metallurgie/plan_siderurgie_france.pdf  

(169)

  https://www.meti.go.jp/english/press/2021/1027_002.html  

(170)

  https://www.iea.org/policies/11561-package-for-the-future-hydrogen-strategy  

(171)

Jang, Y.-C.; Choi, K.; Jeong, J.-h.; Kim, H.; Kim, J.-G. Recycling and Material-Flow Analysis of End-of-Life Vehicles towards Resource Circulation in South Korea. Sustainability 2022, 14, 1270. https:// doi.org/10.3390/su14031270.

(172)

  https://mdpi-res.com/d_attachment/sustainability/sustainability-14-01270/article_deploy/sustainability-14-01270.pdf?version=1643006861  

(173)

  https://leap.unep.org/countries/cn/national-legislation/circular-economy-promotion-law-peoples-republic-china  

(174)

The dismantlement or reutilization of waste motor vehicles shall be conducted in accordance with the relevant laws and administrative regulations (Article 38) https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/documents/China_CircularEconomyLawEnglish.pdf  

(175)

  https://ellenmacarthurfoundation.org/circular-examples/advancing-vehicle-remanufacturing-in-china-the-role-of-policy  

(176)

More information available at: https://ellenmacarthurfoundation.org/circular-examples/groupe-renault,https://www.reuters.com/markets/europe/renault-expects-11-billion-revenue-new-recycling-business-2021-11-30

(177)

  https://www.volvocars.com/intl/v/sustainability/circular-economy  

(178)

E.g. Nissan: https://www.nissan-global.com/EN/SUSTAINABILITY/LIBRARY/SR/2022/ , Hyundai: https://www.hyundai.com/eu/about-hyundai/sustainability/sustainability.html ; Stellantis: https://www.stellantis.com/content/dam/stellantis-corporate/sustainability/csr-disclosure/fca/fca_2020_sustainability_report.pdf ; Ford: https://www.ford.co.uk/experience-ford/sustainability  

(179)

Examples: BMW https://www.bmwgroup.com/en/sustainability.html ; Kia: https://www.kia.com/eu/about-kia/sustainability/  

(180)

E.g. Toyota Europe https://www.toyota-europe.com/sustainability/circularity

(181)

More information available at: https://www.mckinsey.com/~/media/mckinsey/industries/automotive%20and%20assembly/our%20insights/a%20long%20term%20vision%20for%20the%20european%20automotive%20industry/race-2050-a-vision-for-the-european-automotive-industry.pdf  

(182)

Nacef Tazi, Martina Orefice, Charles Marmy, Yifaat Baron, Maria Ljunggren, Patrick Wäger, Fabrice Mathieux, Initial analysis of selected measures to improve the circularity of Critical Raw Materials and other materials in passenger cars, EUR 31468 EN, Publications Office of the European Union, Luxembourg, 2023, ISBN 978-92-68-01625-1, doi: 10.2760/207541, JRC132821

(183)

Amund N. Løvik, Charles Marmy, Maria Ljunggren, Duncan Kushnir, Jaco Huisman, Silvia Bobba, Thibaut Maury, Theodor Ciuta, Elisa Garbossa, Fabrice Mathieux, Patrick Wäger, Material composition trends in vehicles: critical raw materials and other relevant metals. Preparing a dataset on secondary raw materials for the Raw Materials Information System, EUR 30916 EN, Publications Office of the European Union, Luxembourg, 2021, ISBN 978-92-76-45213-3, doi:10.2760/351825, JRC126564.

(184)

Bobba, S., Carrara, S., Huisman, J., Mathieux, F., & Pavel, C. (2020). Critical Raw Materials for Strategic Technologies and Sectors in the EU - a Foresight Study, doi:10.2873/58081

(185)

On 2023 CRM list

(186)

European Commission, study on the EU’s list of Critical Raw Materials (2020), Factsheets on Critical Raw Materials.

(187)

European Commission, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, Pennington, D., Tzimas, E., Baranzelli, C., et al., Methodology for establishing the EU list of critical raw materials : guidelines, Publications Office, 2017, https://data.europa.eu/doi/10.2873/769526

(188)

  https://rmis.jrc.ec.europa.eu/

(189)

Nacef Tazi, Martina Orefice, Charles Marmy, Yifaat Baron, Maria Ljunggren, Patrick Wäger, Fabrice Mathieux, Initial analysis of selected measures to improve the circularity of Critical Raw Materials and other materials in passenger cars, EUR 31468 EN, Publications Office of the European Union, Luxembourg, 2023, ISBN 978-92-68-01625-1, doi: 10.2760/207541, JRC132821.

(190)

Steel, copper, aluminium

(191)

Nacef Tazi, Martina Orefice, Charles Marmy, Yifaat Baron, Maria Ljunggren, Patrick Wäger, Fabrice Mathieux, Initial analysis of selected measures to improve the circularity of Critical Raw Materials and other materials in passenger cars, EUR 31468 EN, Publications Office of the European Union, Luxembourg, 2023, ISBN 978-92-68-01625-1, doi: 10.2760/207541, JRC132821

(192)

Baron, Y.; Kosińska-Terrade, I.; Loew, C.; Köhler, A.; Moch, K.; Sutter, J.; Graulich, K.; Adjei, F.; Mehlhart, G.: Study to support the impact assessment for the review of Directive 2000/53/EC on End-of-Life Vehicles by Oeko-Institut, June 2023

(193)

  https://www.eucar.be/strategic-pill%E2%80%8Bars/  

(194)

  https://www.press.bmwgroup.com/global/article/detail/T0341253EN/the-bmw-i-vision-circular?language=en  

(195)

  https://www.renaultgroup.com/en/news-on-air/news/station-flins-re-factorys-incubator-opens-its-doors/  

(196)

Nacef Tazi, Martina Orefice, Charles Marmy, Yifaat Baron, Maria Ljunggren, Patrick Wäger, Fabrice Mathieux, Initial analysis of selected measures to improve the circularity of Critical Raw Materials and other materials in passenger cars, EUR 31468 EN, Publications Office of the European Union, Luxembourg, 2023, ISBN 978-92-68-01625-1, doi: 10.2760/207541, JRC132821

(197)

Marmy, C., Capelli, M., Boni, H., Bartolome, N., & Marseiler, U. (2023). Projekt EVA II - Synthese –Schlussbericht

(198)

https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1553786820621&uri=CELEX%3A32019R0424

(199)

  https://ec.europa.eu/transparency/documents-register/api/files/SWD(2019)106_0/de00000000060780?rendition=false  

(200)

Amund N. Løvik, Charles Marmy, Maria Ljunggren, Duncan Kushnir, Jaco Huisman, Silvia Bobba, Thibaut Maury, Theodor Ciuta, Elisa Garbossa, Fabrice Mathieux, Patrick Wäger, Material composition trends in vehicles: critical raw materials and other relevant metals. Preparing a dataset on secondary raw materials for the Raw Materials Information System, EUR 30916 EN, Publications Office of the European Union, Luxembourg, 2021, ISBN 978-92-76-45213-3, doi:10.2760/351825, JRC126564.

(201)

  https://standards.cencenelec.eu/dyn/www/f?p=205:7:0::::FSP_ORG_ID:2240017&cs=18A65BEA4289B745403E9407952618CE3

(202)

Colpier, L, Chazalette, B, Gaudeau, O, Cor, O, Etude recyclage poids lourds, rapport final-mise à jour, Ademe, 2021

(203)

  https://www.volvotrucks.com/en-en/trucks/trucks/volvo-fh/volvo-fh-electric.html

(204)

IEA (2021), The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions.

(205)

Johnson Matthey, PGM market report, May 2022.

(206)

Based on an LNG Heavy Duty Truck, World Platinum Investment Council-WPIC. Platinium quarterly presentation. Q4 2019, March 2020.

(207)

Compared to an average of 3.9g to 5.6 g per passenger car autocatalyst. WPIC, April 2021

(208)

Raghavan, S. S., Nordelöf, A., Ljunggren, M., & Arvidsson, R. (2023). Metal requirements for road-based electromobility transitions in Sweden. Resources, Conservation and Recycling, 190, 106777

(209)

Colpier, L, Chazalette, B, Gaudeau, O, Cor, O, Etude recyclage poids lourds, rapport final-mise à jour, Ademe, 2021