On 12 December 2025, the European Parliament and the Council reached a final agreement on the Regulation on vehicle circularity and the management of end-of-life vehicles (ELVs)1). The new regulation upgrades the existing directive to a legally binding regulation, significantly strengthening its enforceability.
It introduces a comprehensive framework covering the entire vehicle life cycle — from design and production to dismantling and end-of-life treatment — with the objective of mandating resource recovery and promoting a circular economy in the automotive sector. Following formal adoption and publication in the Official Journal, the regulation is expected to enter into force in 2026. Individual provisions will be phased in over a period of 2 to 10 years from the date of entry into force.
1) End-of-life vehicle (ELV): A vehicle which the holder discards or is required to discard.
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Background
The EU no longer views end-of-life vehicles merely as waste, but rather as an urban mine containing valuable raw materials that Europe has traditionally relied on imports for. By preventing these resources from leaving the EU and obligating vehicle manufacturers to reuse them within the automotive value chain, the regulation aims to achieve both resource autonomy and carbon reduction through circular economy principles. The initiative is driven by the following four key factors:
Securing critical raw materials within the EU by reducing external dependency and enhancing supply chain resilience
Addressing the issue of “missing vehicles” by tightening requirements for used vehicle exports and preventing resource leakage
Modernising the existing ELV Directive (2000/53/EC) by upgrading it to a regulation, ensuring uniform and immediately applicable requirements across all Member States
Reducing the carbon footprint of the automotive industry through mandatory use of recycled materials
Key Changes
Compared to the existing ELV Directive (2000/53/EC), the main changes include:
Expanded scope: In addition to passenger cars and vans, the regulation will also apply to motorcycles, trucks, and buses, including heavy-duty vehicles.
Mandatory use of recycled plastics:
At least 15% recycled plastic content six years after entry into force
At least 25% recycled plastic content ten years after entry into force
20% of the recycled plastic must originate from end-of-life vehicles, introducing a closed-loop recycling requirement
Strengthened design obligations: Vehicles must be designed to ensure easy dismantling and improved recyclability (“design for dismantling”).
Export controls: Used vehicles that cannot demonstrate roadworthiness will be prohibited from export outside the EU.
Enhanced extended producer responsibility: Vehicle manufacturers will be required to bear the costs of collection and treatment of end-of-life vehicles.
Business Impact
Under the revised framework, manufacturers will be required to go beyond producing high-quality vehicles and must mandatorily apply and demonstrate design for circularity, particularly in relation to dismantling and recycling. As a result, increased R&D investment and manufacturing process costs are expected. Competition among OEMs to secure high-quality recycled plastics is likely to intensify, and manufacturers may impose stricter requirements on suppliers to provide evidence of recycled material usage. In addition, for used vehicle exports, the burden of proof for roadworthiness will be significantly strengthened, leading to increased administrative and documentation workloads.
Role of IMDS
Traditionally, IMDS has been used primarily as a tool for managing hazardous substances, such as the four heavy metals. Going forward, however, its role is expected to expand significantly to support verification of recycled material content. As compliance with mandatory recycled content targets will require robust evidence, IMDS is likely to become a key instrument for demonstrating regulatory conformity. Accordingly, companies must develop the capability to clearly distinguish and accurately declare virgin materials versus recyclate within the IMDS. Furthermore, enhanced validation procedures will be necessary to verify the consistency and reliability of recycled material information provided by suppliers.
[IMDS - Recyclate information input screen]
On 12 December 2025, the European Parliament and the Council reached a final agreement on the Regulation on vehicle circularity and the management of end-of-life vehicles (ELVs)1). The new regulation upgrades the existing directive to a legally binding regulation, significantly strengthening its enforceability.
It introduces a comprehensive framework covering the entire vehicle life cycle — from design and production to dismantling and end-of-life treatment — with the objective of mandating resource recovery and promoting a circular economy in the automotive sector. Following formal adoption and publication in the Official Journal, the regulation is expected to enter into force in 2026. Individual provisions will be phased in over a period of 2 to 10 years from the date of entry into force.
1) End-of-life vehicle (ELV): A vehicle which the holder discards or is required to discard.
Background
The EU no longer views end-of-life vehicles merely as waste, but rather as an urban mine containing valuable raw materials that Europe has traditionally relied on imports for. By preventing these resources from leaving the EU and obligating vehicle manufacturers to reuse them within the automotive value chain, the regulation aims to achieve both resource autonomy and carbon reduction through circular economy principles. The initiative is driven by the following four key factors:
Securing critical raw materials within the EU by reducing external dependency and enhancing supply chain resilience
Addressing the issue of “missing vehicles” by tightening requirements for used vehicle exports and preventing resource leakage
Modernising the existing ELV Directive (2000/53/EC) by upgrading it to a regulation, ensuring uniform and immediately applicable requirements across all Member States
Reducing the carbon footprint of the automotive industry through mandatory use of recycled materials
Key Changes
Compared to the existing ELV Directive (2000/53/EC), the main changes include:
Expanded scope: In addition to passenger cars and vans, the regulation will also apply to motorcycles, trucks, and buses, including heavy-duty vehicles.
Mandatory use of recycled plastics:
At least 15% recycled plastic content six years after entry into force
At least 25% recycled plastic content ten years after entry into force
20% of the recycled plastic must originate from end-of-life vehicles, introducing a closed-loop recycling requirement
Strengthened design obligations: Vehicles must be designed to ensure easy dismantling and improved recyclability (“design for dismantling”).
Export controls: Used vehicles that cannot demonstrate roadworthiness will be prohibited from export outside the EU.
Enhanced extended producer responsibility: Vehicle manufacturers will be required to bear the costs of collection and treatment of end-of-life vehicles.
Business Impact
Under the revised framework, manufacturers will be required to go beyond producing high-quality vehicles and must mandatorily apply and demonstrate design for circularity, particularly in relation to dismantling and recycling. As a result, increased R&D investment and manufacturing process costs are expected. Competition among OEMs to secure high-quality recycled plastics is likely to intensify, and manufacturers may impose stricter requirements on suppliers to provide evidence of recycled material usage. In addition, for used vehicle exports, the burden of proof for roadworthiness will be significantly strengthened, leading to increased administrative and documentation workloads.
Role of IMDS
Traditionally, IMDS has been used primarily as a tool for managing hazardous substances, such as the four heavy metals. Going forward, however, its role is expected to expand significantly to support verification of recycled material content. As compliance with mandatory recycled content targets will require robust evidence, IMDS is likely to become a key instrument for demonstrating regulatory conformity. Accordingly, companies must develop the capability to clearly distinguish and accurately declare virgin materials versus recyclate within the IMDS. Furthermore, enhanced validation procedures will be necessary to verify the consistency and reliability of recycled material information provided by suppliers.
[IMDS - Recyclate information input screen]