Europe Adopts Circular Economy Legislation for the Automotive Sector

by Diana Radovan, Director, Sustainability Policy

The EU recently embedded circular economy principles into law. These new rules require industry to integrate reuse, recycling, and resource efficiency directly into design and end-of-life management for the first time.

Key highlights are:
Circular by design:
New vehicles must allow easy removal of parts and components for reuse, recycling, remanufacturing, or refurbishing.

Mandatory recycled content:
Within six years, 20% of plastics in vehicles must be recycled material, rising to 25% within 10 years (with future targets for steel and aluminum).

Extended producer responsibility:
Manufacturers will cover the costs of collecting and treating end-of-life vehicles.

Export restrictions:
Clearer rules on distinguishing between used and end-of-life vehicles, with bans on exporting the latter outside of the EU.

The new rules will fundamentally reshape the lifecycle of cars in Europe. There are 285.6 million vehicles on EU roads, of which 6.5 million will reach their end-of-life this year.

Through this measure, circularity is no longer a voluntary sustainability goal, but a legal obligation. This shift aims to strengthen Europe's resource security, reduce environmental impacts, and create a more sustainable automotive industry.

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