New EU law makes cars more circular, but industry pressure wins out on SUV size

The EU’s new vehicle circularity law introduces stronger EPR, recycled-content, parts reuse and traceability measures, but environmental groups say it fails to confront rising vehicle size and resource use. For recyclers, the outcome creates new opportunities, while leaving implementation, producer funding and action on illegal dismantling largely to Member States.

The EEB and DUH welcome new EU law on vehicles, but warn of critical gaps

Today, the European Parliament gave the final green light to new rules to make the automotive sector more circular, but the deal falls short of its promise, warn the European Environmental Bureau (EEB) and Environmental Action Germany (Deutsche Umwelthilfe, DUH).

The new EU law on vehicles consolidates the outdated End-of-Life Vehicles Directive and the 3R Type-Approval Directive into a single Regulation on Circularity Requirements on Vehicle Design and on the Management of End-of-Life Vehicles. The EEB and DUH welcome it as an important step towards strengthening the EU single market, boosting circularity and reducing the environmental impacts of cars from design to end-of-life treatment. However, they warn that critical gaps remain [1] and national implementation will be crucial.

The Regulation introduces promising tools, including a Circularity Vehicle Passport, an EU-wide Extended Producer Responsibility (EPR) system, minimum recycled content requirements, and better rules on the reuse of parts and on the collection and treatment of vehicles. If implemented with genuine ambition, these measures could help drive decarbonisation and circularity, and hold producers more accountable.

However, the new law sidesteps the sector’s most glaring problem: cars are getting bigger and more numerous, driving up resource consumption and environmental damage. It also prioritises recycling over more effective strategies such as durability, reuse, and repair. And it leaves producers off the hook for used vehicles exported outside the EU. This despite the historic concerns with transparency and accountability in the sector [2], and repeated calls from environmental NGOs, consumer organisations and industry alike [3].

Fynn Hauschke, Senior Policy Officer for Circular Economy and Waste at the EEB, said:

“Today’s vote sends mixed signals. Lawmakers introduced important circular economy measures, but ultimately bowed to industry pressure. They backed away from making manufacturers truly responsible for the vehicles they put on the road, and turned a blind eye to the industry’s continued trend towards ever-larger, heavier SUVs and more resource-hungry cars. They also watered down some of the most transformative provisions, particularly on recycled plastics. This is a missed opportunity to put the automotive sector on a genuinely circular path.”

Barbara Metz, Executive Director at DUH, said:

“The anti-recycling cartel uncovered by the Commission last year shows that producers are not taking resource protection and circular economy seriously enough. We welcome that the new Vehicle Regulation sets out clearer rules. However, it provides Member States with considerable leeway. They must ensure that producers provide sufficient funding for treatment infrastructure. Other important challenges will be the prevention of illegal vehicle dismantling, and the promotion of reused spare parts.”

Following formal approval by both the European Parliament and the Council, the Regulation will be published in the Official Journal of the European Union and enter into force twenty days later. Member States will then have two years to begin applying it. However, key measures carry long transitional periods, e.g., six years for obligations on recycled plastic content and the Digital Circularity Vehicle Passport.