New EU Rules Drive Circular Economy into Automotive Design and Recycling

The European Parliament’s committees on Environment and Internal Market approved landmark circular economy rules on July 7, 2025. These regulations demand that vehicles from cars and vans to motorcycles, buses, and heavy trucks be designed with circularity in mind, entering into force soon after approval.

Design for Disassembly

Manufacturers must make new vehicles so that parts and components can be easily removed without hacking software at Authorized Treatment Facilities (ATFs). This design requirement supports reuse, remanufacturing, recycling, or refurbishing “where technically possible”.

Recycled Content Targets

Plastics: Starting six years post-enforcement, at least 20 % recycled plastic is needed in new vehicles. This will rise to a minimum of 25 % within ten years, contingent on supply and price conditions.

Metals: Future regulations will likely set similar benchmarks for recycled steel, aluminium, and critical raw materials, following feasibility studies.

Strengthened Extended Producer Responsibility (EPR)

Vehicle manufacturers must finance the collection and treatment of end‑of‑life vehicles (ELVs), covering depollution, removal of fluids and hazardous substances pre-shredding, and ensuring proper recycling.

Scope and Exemptions

Applies to all new cars and vans one year after the regulation’s entry into force.

Rolls out to buses, heavy-duty vehicles, trailers, motorcycles, quads, mopeds, and microcars within five years.

Exemptions: military, civil-defence, emergency vehicles, historic vehicles, and certain special-purpose models.

Traceability and Anti-Dumping Measures

The regulation demands improved tracking of old vehicles to prevent illegal exports and misuse. It mandates interoperability between national registration systems and bans exporting non‑roadworthy ELVs.

Policy Rationale

Approximately 6.5 million EU vehicles reach end-of-life annually, making car circularity a key to resource security and environmental protection.

Circular design reduces waste and greenhouse gas emissions, supports EU Green Deal objectives, and fosters industrial innovation.

Next Steps & Political Context

Council agreement on June 17, 2025, approved the EPR framework and recycled plastic targets; the European Automobile Manufacturers Association (ACEA) supports the direction, citing competitiveness considerations.

The Council and Parliament now enter trilogue negotiations to finalize the text.

Once adopted, implementation phases will roll out over 1 to 10 years depending on vehicle category.

Challenges Ahead

Industry concerns: potential pushback over costs, technical feasibility, and supply of recycled materials.

Policy dilution: some member states may resist stronger provisions, especially around reducing vehicle production, repairability, and footprint transparency.

Conclusion

This suite of EU regulations marks a pivotal shift toward embedding circular economy principles into vehicle life cycles from design, through use, to disposal. It sets concrete targets and processes aimed at reducing waste, preserving resources, and reshaping the automotive industry. The upcoming negotiations and implementation phase will determine whether Europe leads a true transformation or delivers incremental change.