COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF 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
Date: 2023-07-13
Institutions: Directorate-General for Environment, European Commission
Subjects: approval, circular economy, clean technology, environmental impact, extended producer responsibility, motor vehicle industry, technical standard, vehicle, waste recycling

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 13.7.2023  SWD(2023) 257 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF 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) 256 final}  
 
 
1.  WHAT IS THIS INITIATIVE ABOUT?  

The  initiative  presents  a  joint  review  of  the  Directive  2000/53/EC  on  end-of-life  vehicles 
(‘ELV Directive’)1 and of Directive 2005/64/EC on the type-approval of motor vehicles with 
regard  to  their  reusability,  recyclability  and  recoverability  (‘3R  type-approval’  Directive)2. 
The ELV Directive was adopted in 2000 and established for the first time a harmonised EU 
framework designed to  ensure the environmentally sound treatment of vehicles reaching the 
end  of  their  life  and  considered  as  waste.  It  sets  out  provisions  on  the  collection  and 
depollution of ELVs, on restrictions of hazardous substances in new vehicles, as well as reuse 
and  recycling  (85%)  and  reuse  and  recovery  (95%)  targets,  based  on  the  average  weight  of 
ELVs  per  vehicle  and  year.  The  3R  type-approval  Directive,  adopted  in  2005,  links  the 
provisions  of  the  ELV  Directive  to  design  provisions  on  reusability,  recyclability  and 
recoverability tied to the type-approval process. In particular, the Directive states that vehicles 
should be constructed so as to be 85% recyclable/reusable and 95% reusable/recoverable. The 
3R  type-approval  Directive  is  part  of  the  type-approval  framework3,  whereby  new  vehicle 
types are tested and  granted type-approval  before being placed on the EU market,  provided 
they meet a set of technical requirements. 

The need to revise these Directives was stressed in the European Green Deal and the Circular 
Economy  Action  Plan  (CEAP)4.  The  evaluation  of  these  Directives  has  shown  that 
considerable improvements were needed to boost the transition of the automotive sector to a 
circular economy, thereby reducing the environmental footprint linked to the production and 
end-of-life  treatment  of  vehicles  and  strengthening  the  sustainability  of  the  automotive  and 
recycling industry in Europe.  

The  automotive  manufacturing  industry,  which  is  a  key  pillar  of  the  EU  economy,  largely 
relies on the supply of primary raw materials (steel, aluminium, copper, plastics) and uses a 
limited  amount  of  recycled  materials,  while  the  treatment  of  ELVs  results  in  important  but 
low-quality  metal  scrap  and  very  limited  plastic  recycling.  The  automotive  sector  is 
undergoing  a  massive  transformation  with  the  shift  to  electric  vehicles.  This  transformation 
means that the main share of the environmental footprint of vehicles will shift from the use-
phase  to  the  production  and  recycling  stages,  and  that  important  supplies  of  critical  raw 
materials (CRMs) will be required.  

The  EU  heads  of  state  or  government  have  made  the  transition  to  a  circular  economy  a 
priority  to  reduce  the  vulnerability  of  the  EU  industry  supply  chains,  especially  for  critical 
raw  materials  essential  for  the  EU’s  strategic  autonomy  and  for  the  transition  to  a  carbon-
neutral economy5. It is a key point in the Green Deal Industrial Plan for the Net-Zero Age6.  

1  Directive  2000/53/EC  of  the  European  Parliament  and  of  the  Council  of  18  September  2000  on  end-of  life 

vehicles 

2 Directive 2005/64/EC of the European Parliament and of the Council of 26 October 2005 on the type-approval 

of motor vehicles with regard to their reusability, recyclability. 

3 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 
4 https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en  
5 See the Versailles Declaration adopted in March 2022: https://www.consilium.europa.eu/media/54773/ 

20220311-versailles-declaration-en.pdf and the Conclusion adopted by the European Council on 9 February 
2023  

6 https://commission.europa.eu/system/files/2023-

02/COM_2023_62_2_EN_ACT_A%20Green%20Deal%20Industrial%20Plan%20for%20the%20Net-
Zero%20Age.pdf 

 
 
                                                 
In  line  with  these  priorities,  this  impact  assessment  addresses  the  following  four  problem 
areas: 
1.  There is a lack of integration of circularity in vehicle design and production leading to 

high dependencies for primary raw materials; 

2.  The quality of treatment of vehicles at the end of their life is suboptimal compared to 

the potential to retain more environmental and economic value;  

3.  An important share of ‘missing vehicles’ subject to the ELV Directive are not collected to 
be treated under proper environmental conditions and a large volume of non-roadworthy 
and polluting used vehicles are exported from the EU every year; 

4.  There is unexploited circularity potential of vehicles currently outside the scope of the 

ELV Directive to contribute to the objectives of the European Green Deal. 

2.  WHAT IS TO BE ACHIEVED AND WHICH POLICY OPTIONS HAVE BEEN ASSESSED?  

The  general  objective  of  the  initiative  is  to  make  the  EU  internal  market  function  better  by 
reducing the negative environmental impact of vehicles throughout their different life phases 
and promoting sustainability in the automotive and recycling sectors. 

The initiative pursues the following five specific objectives: 
 

‘Design circular’: Make design and production more circular;  

 

 

 

 

‘Use recycled content’: Significantly increase the use of recycled materials in production;  

‘Treat better’: Significantly increase the quantity, quality and value of materials reused 
and recycled;  

‘Collect more’: Significantly increase the  collection of ELVs in the EU  and ensure that 
used  vehicles  exported  from  the  EU  are  roadworthy,  so  that  the  number  of  ‘missing 
vehicles’  and  the  pollution  associated  with  exporting  non-roadworthy  used  vehicles 
outside the EU are reduced; 
‘Cover  more  vehicles’:  Increase  circularity  for  vehicles  (lorries,  buses,  trailers,  and 
vehicles in categories L3e-L7e) currently outside the scope of ELV and 3R type-approval 
legislation. 

To address each of these objectives, specific policy options have been analysed7:  

1.  Design and production. Three policy options were assessed to improve the circularity in 
the design and production of new vehicles, ranging from i) better compliance verification 
through  the  type-approval  process  and  improved  exchange  of  information  with  the 
dismantling sector, to ii) new requirements on design for dismantling and the development 
of circularity strategies, up to iii) the development of an Environmental Vehicle Passport;  
2.  Recycled content. Three policy options assessed are i) setting out a moderate level for a 
target on plastics recycled content and an empowerment allowing the Commission to set a 
future target  level  for steel  within three  years after entry into force of the Regulation;  ii) 
setting a mandatory recycled content target for plastics in newly type-approved vehicles of 
25%  and  of  20%  for  steel;  and  iii)  increasing  these  levels  up  to  30%  for  both  steel  and 
plastics  and  finally  establishing  an  empowerment  for  the  Commission  to  assess  and  set 
recycled content targets for other materials, especially CRMs, in the future; 

7 For each objective, three options were developed and assessed  

2 

 
 
 
 
 
                                                 
3.  End-of-life  treatment.  The  three  policy  options  comprise  i)  measures  modernising  and 
clarifying  the  existing  rules  on  ELV  waste  treatment;  ii)  new  obligations  to  remove  key 
components  with  CRMs  prior  to  shredding,  a  30%  plastics  recycling  target,  a  ban  on 
mixing  ELV  scrap  with  WEEE  (Waste  Electrical  and  Electronic  Equipment)  and 
incentives  to  support  the  market  for  used  spare  parts  and  finally;  iii)  further  removal  of 
smaller electronic components prior to shredding, a 70% recycling target for glass and the 
development of standards to improve shredding technologies;  

4.  Collection.  Four  policy  options  are  targeting  i)  enhanced  reporting  and  enforcement  of 
existing  rules,  notably  on  the  reporting  of  ELVs  by  dismantlers  and  shredders;  ii)  better 
tracking  of  ELVs  through  digitalisation  and  exchange  of  information  on  national  vehicle 
registers, stricter criteria to distinguish used vehicles from ELVs and the establishment of 
appropriate  sanctions  in  case  of  infringements;  iii)  the  requirement  that  used  vehicles 
should only be exported outside the EU with a valid roadworthiness certificate, and; iv) a 
synergised  combination  of  both  the  collection  and  export  measures  of  the  previous  three 
policy options. 

i) 

include 

5.  Incentives to increase collection of  ELVs and improve waste treatment. Three policy 
the  establishment  by  Member  States  of  Extended  Producer 
options 
Responsibility  (EPR)  schemes  for  vehicles,  whereby  vehicle  manufacturers  would  be 
covering costs linked to the collection and high-quality treatment of ELVs; ii) harmonised 
circularity  criteria  for  the  modulation  of  EPR  fees  to  be  paid  under  these  schemes  by 
vehicle manufacturers and a mechanism to ensure the functioning of EPR in cross-border 
situations  within  the  EU,  and;  iii)  additional  economic  incentives  such  as  ‘deposit  return 
schemes’ and harmonised circularity criteria for Green Public Procurement of vehicles. 
6.  Scope. Three policy options range from i) a limited extension of the scope of the rules to 
L-category vehicles8, lorries, buses and trailers, ii) a more progressive extension including 
mandatory  treatment  at  Authorised  Treatment  Facilities  (ATFs),  and  iii)  a  full  scope 
extension with requirements applicable.   

The  options  are  based  on  findings  from  the  evaluations  of  the  existing  legislation, 
contributions from stakeholders during the consultation process, and suggestions provided in 
the  Fit  for  Future  Platform  (F4F)  opinion9.  A  comprehensive  analysis  of  the  impacts  is 
conducted for each policy option, as well as for the joint impacts and synergies between these 
options. The impacts on small and medium-sized enterprises (SMEs) are particularly taken 
into  account  and  summarised  in  a  dedicated  SME  test.  The  environmental,  economic  and 
social impacts have been calculated up until 2040 and compared to the baseline scenario. The 
main year for comparison is 2035 with all long-term measures taken effect by that date. 

3.  WHAT IS THE PREFERRED OPTION AND WHY?  

The preferred policy package contains a combination of the following options:  

Design  circular:  The  preferred  option  contains  short-term  obligations  for  vehicle 
manufacturers  to  make  available  detailed  and  user-friendly  dismantling  and  recycling 
information, including the use and location of CRMs in vehicles and on the share of recycled 
content  used  in  new  vehicles.  Actions  for  the  medium  term  include  a  revision  of  the 
methodology to calculate recyclability and re-usability of new vehicles at type-approval stage 

8  L-category vehicles include light 2-wheel powered vehicles (category  L1e), three-wheel mopeds (L2e), two-wheel 
motorcycles (L3e), two-wheel motorcycles with sidecars (L4e), powered tricycles (L5e), light quadricycles (L6e) 
and heavy quadricycles (L7e) 

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

approval.aspx 

3 

 
 
 
                                                 
and  the  development  of  an  environmental  vehicle  passport.  Overall,  this  anchors  circularity 
requirements into the type-approval of new vehicle types. 

Recycled  content:  The  preferred  option  is  to  set  a  medium  ambition  level  with  plastics 
recycled  content  targets  of  25%  by  2030,  of  which  25%  from  closed  loop  from  ELV 
treatment.  For  steel,  this  option  provides  an  empowerment  allowing  the  Commission  to  lay 
down a target  for recycled steel  content in newly approved vehicles within three  years after 
the Regulation enters into force, based on a dedicated feasibility study.   The possibility to set 
recycled content targets for other materials like aluminium and CRMs will be assessed in the 
future, based on changes in automotive designs and availability of recycling capacity.  

Treat better: The preferred option includes a stricter definition of recycling, a landfill ban for 
automotive  shredder  residue  fractions  and  medium  ambition  level  removal  obligations  to 
improve recovery of key components from ELVs, without placing disproportionate costs on 
treatment  operators.  It  will  increase  recovery  of  (critical)  raw  materials  and  improve  the 
quality of plastics, steel and aluminium fractions. 

Collect  more:  The  preferred  option  is  the  most  ambitious  policy  option.  Measures  such  as 
clearer  responsibility  allocation  for  certificate  of  destruction,  binding  criteria  for 
distinguishing  used  vehicles  and  ELVs,  and  new  enforcement  provisions  will  significantly 
increase the number of ELVs treated legally in the EU. Furthermore, it will  ban the export of 
old, used polluting vehicles which are no longer roadworthy.  

To  provide  incentives  to  increase  collection  of  ELVs  and improve  waste  treatment,  the 
preferred  option  includes  financial  and  organisation  incentives  via  establishment  of  EPR 
requirements to increase collection of ELVs and to compensate costs for improved treatment 
quality that cannot be offset by the value of materials and components recovered.  

Cover more vehicles: The preferred option is a phased-in approach to cover more vehicles in 
time  under  the  new  EU  rules  by  requiring  manufacturers  to  provide  information  on  the 
composition of their vehicles, and at the same time introducing a set of  minimum treatment 
requirements for end-of-life L3e-L7e category vehicles, lorries, buses and trailers. 

4.  WHAT ARE THE IMPACTS OF THE PREFERRED OPTION?  

The preferred option will have a substantial positive impact on the environment by reducing 
the environmental footprint linked to the production and end-of-life requirements of vehicles.  

The overall environmental benefits are assessed as an annual  reduction of 12.3 million 
tons of CO2-eq in 2035 (10.8 million tons in 2030 to 14.0 million tonnes in 2040), key for the 
decarbonisation  of  the  automotive  industry.  These  CO2  savings  represent  2.8  billion  EUR 
when  monetised.  This  is  linked  notably  to  a  better  valorisation  of  5.4  million  tons  of 
materials  (plastics,  steel,  aluminium,  copper,  CRMs)  which  would  be  either  recycled  at 
higher quality or re-used, as well as to the fact that up to 3.8 million additional ELVs would 
be  collected  and  treated  extra  in  the  EU.  350  tons  of  rare  earths  in  permanent  magnet 
materials would be separately collected for reuse and recycling in 2035 (and 1,500 tons in 
2040), which would contribute greatly to the EU efforts for strategic autonomy for CRMs.  

The total annual revenues for the preferred option is 5.2 billion EUR in 2035, including 
the CO2 credits10, against a cost of 3.3 billion EUR, leading to a 1.8 billion net revenue.  

10 2.8 billion EUR 

4 

 
 
                                                 
Furthermore,  preventing  the  export  of  old  vehicles  which  are  not  roadworthy,  will  have  a 
positive  impact  on  road  safety  and  will  contribute  to  avoid  increasing  harmful  pollutant 
emissions in those countries where EU used vehicles are being exported. This approach will 
support  international  efforts  for  more  sustainable  international  trade  in  used  vehicles  and 
contribute to tackle the EU's external environmental footprint, particularly related to exports 
of end-of-life and used vehicles.  

The cost of the preferred option is estimated to reach 66 EUR per vehicle put on the market 
in 2035.  

The  estimated  additional  jobs  are  determined  at  22,100,  of  which  14,200  are  created  in 
SMEs.  

For  vehicle  manufacturers,  the  costs  are  estimated  to  be  roughly  39  EUR  per  vehicle, 
primarily  related  to  increasing  the  recycled  content  of  plastic  and  the  contributions  to  EPR 
schemes.  While  there  will  be  some  short-term  costs  for  the  EU  automotive  industry,  the 
implementation of preferred option will also generate energy savings, reduce its dependency 
on  materials  sourced  from  third  countries  and  ensure  that  the  transition  to  vehicle 
electrification is made based on sustainable and circular business models.  

The  preferred  option  will  generate  both  important  costs  (linked  to  investment  in  new 
technologies) and revenues (linked to increased values in spare parts and recycled materials) 
for  the  waste  management  sector.  While  the  situation  will  vary  between  different  Member 
States  and  operators  due  to  differences  in  technologies  used  and  labour  costs,  the  preferred 
option  is  expected  to  significantly  strengthen  and  modernise  the  EU  dismantling,  shredding 
and recycling industry.  

Member  State  authorities  will  incur  limited  costs  associated  with  monitoring  and  enforcing 
compliance  with  the  new  legislation.  The  costs  will  be  primarily  associated  with  inspection 
campaigns,  controls  on  the  export  of  ELVs  and  used  vehicles,  and  adapting  registration 
systems.  The  implementation  of  digitalization  measures  will  increase  efficiency  for  both 
enforcement authorities and economic operators and will reduce their burden. The estimated 
overall  cost  for  public  authorities  related  to  the  supervision  of  EPR  schemes,  enforcement 
activities, and adaptation of national vehicle registration systems is around 24 million EUR, 
which is less than 2 EUR per vehicle.  

Consumers may face an increase in new vehicle prices of approximately 39 EUR per vehicle, 
as  well  a  reduction  in  prices  when  selling  second-hand  cars  by  12  EUR  per  vehicle  due  to 
reduced exports. Nevertheless, measures aimed at supporting the recovery and sales of used 
spare parts are expected to result in lower prices for consumers, thereby providing them with 
a benefit. 

The advanced requirements for end-of-life vehicle treatment may pose challenges for SMEs 
in  terms  of  higher  short-  and  medium-term  implementation  costs  and  adaptation  to  new 
treatment technologies. At the same time, increased investments in the automotive recycling 
sector,  support  for  the  reuse  market  of  secondary  parts  and  easier  access  to  dismantling 
information of a vehicle will boost innovation and unlock new opportunities for the SMEs and 
support creation of new jobs in the field. To further mitigate the impacts on SMEs, reinforced 
EPR requirements enable costs compensation for higher collection and treatment quality.  

The  initiative  contributes  to  the  United  Nations'  Sustainable  Development  Goals  (SDGs), 
promoting,  industry,  innovation  and  infrastructure  (SDG9),  climate  action  (SDG13), 

5 

 
 
responsible  consumption  and  production  (SDG12),  decent  work  and  economic  growth 
(SDG8) and reducing pollution to water, air and land (SDG14 and SDG15). 

5.  MEASURING SUCCESS?  

The  success  of  the  preferred  option  will  be  measured  through  the  use  of  various 
implementation  indicators,  including  amount  of  recycled  materials  used  in  new  vehicles, 
recycling  rates  for  specific  materials  from  ELVs,  materials/components/parts  removed  prior 
to  shredding,  market  share  of  used  spare  parts,  number  of  ELVs  collected  and  treated 
according to the ELV requirements, amount of exported used vehicles.   
  Design  circular  and  use  of  recycled  materials:  compliance  with  3R  criteria  (on 
reusability, recoverability and recyclability), the use of recycled materials will be verified 
at the time of type approval. By monitoring information from the circularity strategy, the 
Commission would track the evolution of the automotive sector towards circular business 
models.  

  Better  treatment:  The  success  of  quality  treatment  of  ELVs  will  be  assessed  by 
monitoring the amount of removed parts and the achievement of 85% recycling/reuse and 
95% reuse/recovery rates in compliance with the modernised recycling definition. Regular 
reporting by Member States on the number of inspections and penalties applied for illegal 
treatment operators will be used to assess how the new Regulation is enforced. 

  Collection: Based on improved Member State reporting to Eurostat, the Commission will 
monitor the number of vehicles in the national fleets and their weight. This will make it 
possible  to  analyse  trends  and  compare  data  with  the  total  number  of  exported  vehicles 
and treated ELVs, including their weight at collection and the fractions that are recycled.  
  Cover more vehicles: Reported number of L-category vehicles, lorries, buses and trailers 
treated  at  authorised  treatment  facilities  and  the  number  of  Certificates  of  Destruction 
issued  will  allow  measuring  the  success  in  applying  new  requirements  to  vehicle 
categories under the extended scope. 

The  success  of  the  revision  will  also  be  measured  by  monitoring  environmental,  economic 
and  social  impacts  of  the  future  legislation,  including  reduced  Global  Warming  Potential, 
increased investment in the automotive recycling sector, creation of new jobs, and the overall 
economic viability of the economic operators within the automotive sector. These indicators 
will  provide  important  insights  about  the  effectiveness  of  the  new  EU  legal  framework.  A 
general review is foreseen 8 years after entry into force of the new legislation. 

6