Slovakia’s ELV System Faces Its Next Test

Slovakia’s ELV system is highly integrated, linking ATFs, collection points and the national vehicle registry to prevent vehicles disappearing from the system. Pavol Prepiak says the next challenge is funding, as many ELVs were first registered abroad, while incoming EU rules, reused parts and EV battery costs add further pressure.

Pavol Prepiak of ZAP SR discusses Slovakia’s ELV system and future challenges. — Pavol Prepiak

Pavol Prepiak, Vice of ZAP SR, the Automotive Industry Association of the Slovak Republic, discusses Slovakia’s highly integrated ELV tracking system, the funding problems posed by cross-border used-vehicle flows, and the practical impact of incoming EU rules. He also examines reused parts, vehicle battery costs and the long-term outlook for mobility and recycling.

Slovakia’s ELV system, ATF network and market challenges

A key characteristic of Slovakia is that we are a smaller, landlocked country in Central Europe, and all our neighbors are at least twice our size. A large part of the Slovak economy is built on the automotive industry. Annual vehicle production exceeds 1 million units, and we have many component suppliers for the automotive industry. We contribute nearly 50% to exports and approximately 10% to GDP. We are a very open economy; Slovakia has been a member of the EU since 2024, of NATO since 2008, and uses the euro.

The Slovak Automotive Industry Association is an organization that brings together manufacturers, suppliers, and distributors (importers) of nearly all vehicle brands. Our members employ approximately 70,000 workers. We create jobs for approximately 270,000 additional subcontractors and service companies. This represents approximately 14% of the total number of employees in Slovakia.

We began addressing the issue of end-of-life vehicles (ELVs) in 2002 during accession negotiations with the EU. The End-of-Life Vehicles (ELV) Directive was the first product-specific directive (for vehicles) to define extended producer responsibility.

We began building a system within the framework of our association. It was necessary to implement the directive in the Waste Act, but at the same time we began building information structures, without which we knew the system would not function.

The first end-of-life vehicle processors were authorized by the Ministry of the Environment in 2003/2004.

In 2005, we launched our own online system for issuing disposal certificates.

In 2009, we utilized our information systems for the Slovak government’s nationwide system to support vehicle purchase and disposal.

Today, we collaborate with 44 processors, and the central online information system is fully integrated into the state-maintained national vehicle registry. Upon vehicle handover, the vehicle is automatically and permanently deregistered.

The original vehicle owner no longer needs to visit the registration office again. We maintain control over end-of-life vehicles both in terms of registration (CoD) and in processing methods, ensuring the prescribed recycling and recovery rates are achieved.

The annual number of ELVs is approximately 50,000. Vehicle collection takes place at approximately 180 locations. I believe the ELV system is very well designed and established. In terms of registration and data management, I believe we are one of the best-functioning countries in the EU.

A significant difference compared with countries in the western part of the EU is that 50% of all end-of-life vehicles were not first registered in Slovakia. These 50% of vehicles were imported into Slovakia as used, older vehicles from other EU member states. Manufacturers have agreed that the collective system is financed on a “pay-as-you-sell” basis. The import of used vehicles, therefore, complicates financing.

Linking ELV collection, treatment and vehicle registration

The basis of our approach to tracking ELVs was the introduction of strict record-keeping and the assignment of primary responsibility to collection points and ATFs.

An end-of-life vehicle is hazardous waste. Therefore, records are required from both the collection point and the treatment facility. Some stakeholders in the waste management sector were fundamentally opposed to this, as they wanted collection to remain independent of processing. There were lengthy technical discussions that ultimately led the Ministry of the Environment to decide that every collection yard must clearly indicate the vehicle’s processing location. Collection by “independent” collectors without a connection (contract) to a waste treatment facility (ATF) is therefore not possible. We had learned from past experience that some collection points had become “gray zones” where vehicles “disappeared.”

The second step was to shift responsibility within the hierarchy to the ATFs (they are responsible for processing, processing rates, and recovery). The ATF is legally responsible for its contracted collection point. Only the ATF can authorize a collection point in our registration system.

However, this does not mean that a collection point is strictly tied to cooperation with a single ATF. On the contrary, some collection points cooperate with multiple ATFs. Just as a single company can sell multiple brands (be a dealer), a single collection point can partner with multiple ATFs.

However, it is essential that, at the moment the vehicle is handed over as an ELV and a Certificate of Delivery (CoD) is issued, the ATF has immediate online access to information on which vehicle was received at the contracted collection point.

Once the ELV is registered in the system, the vehicle is no longer “lost.” Thanks to VIN identification, we know who is responsible for taking delivery of the vehicle and which ATF will process it.

All this data is received online by the national vehicle registry, and provided there are no legal encumbrances on the vehicle (such as the vehicle serving as collateral for a loan), the vehicle is permanently and automatically deregistered, and the owner receives a confirmation of permanent deregistration along with the Certificate of Destruction (CoD). Everything is handled in one place.

Data management, the involvement of IT experts, our flexibility in developing and improving the system, and ultimately reducing costs for the state to zero (the state receives everything from us for free) are the reasons we maintain consistent data across vehicle deregistration and ELV records.

Closing Slovakia’s cross-border ELV funding gap

The cross-border imbalance in producer responsibility funding is a particular challenge for Central and Eastern European countries. The difference is significant; for example, approximately 3 million vehicles are registered annually in Germany, but the number of end-of-life vehicles is only 400,000. This means that 2.6 million cars leave Germany and head to “poorer” parts of the EU. This system suits Germany financially; extended producer responsibility is assumed for 3 million vehicles, but the actual market is only 400,000.

In our case, 50% of end-of-life vehicles come from sales by our members (distributors and dealers), and 50% are currently used vehicles. This situation was also the subject of our comments during the drafting of the End-of-Life Vehicles Regulation.

However, it turned out to be an “alibi,” and I will say openly that what is in the regulation will not work.

When drafting the regulation, the EU addressed a political task: the EU is a single market. Unfortunately, it did not take into account the fact that there are 27 member states in the EU, each with its own legislation, its own process for VAT, and its own commercial code. Member States are not equal. Member States are unique.

According to Chapter 22 (likely a reference to Joseph Heller’s famous novel Catch-22), this is unenforceable.

Once a manufacturer pays the extended producer responsibility fee for a vehicle, if that vehicle is placed on the EU market in another Member State 30 years later, they will no longer be able to identify the responsible party.

Try finding a reputable manufacturer today for brands like Daewoo, Lada, and Trabant. They no longer exist, but their products are still on the roads…

Result: political regulation without the possibility of implementation.

How might the system work in practice? By registering a used vehicle, you bring “future waste” – ELV. But the money for this waste remains in the country of first registration. That is why we need to start with data. Every vehicle should have clear information about which country it was first registered in and which entity assumed extended producer responsibility for it. In the event of a subsequent re-registration of a used vehicle from one Member State to another, such a registry would enable identification of the specific responsible party. Only after the creation of such an open database (which will likely take several years) could cooperation and the transfer of funds between Member States be established.

Preparing for the new EU ELV Regulation

Regarding the EU ELV regulation, we have to wait for the final text, and we will start a discussion with the Ministry of Environment on how to implement some of the provisions.

How to be prepared properly? I will answer a little indirectly: I’m not old, but I remember a few things. I come from a country that was building communism until 1989. I grew up, graduated from university and started working during this period. It was clear to everyone that the top political class no longer understood real life. In 1989, the entire communist system fell in a matter of months in many countries, and the Soviet Union also collapsed.

The EU was an excellent project for economic cooperation. But today I see a great parallel with what our country looked like in 1985…

Even then, we managed to live and survive. We had a saying: If you help yourself, God will help you too.

This is my answer on how we can prepare. We have to help ourselves.

Building a market for reused parts

The secondhand parts market is an area we want to focus on and develop.

It is an opportunity to sell reused spare parts. However, it must be said that the average age of ELVs in our country is close to 30 years. Such a high age of ELVs reduces the market potential. But we will look for opportunities to develop solutions with ATFs. Let’s see.

EV costs and the changing future of mobility

Processing EoL EVs is a challenge. A big one. No one wants to admit that the costs of disposing of a battery-powered vehicle are extremely high. Removing the batteries, storing them, and, in the event of damage (which is the case in nearly 99% of ELVs), involving costly transport under the ADR hazardous goods regime and subsequent processing of the batteries.

The costs range from hundreds to thousands of euros per vehicle. We are discussing this situation with manufacturers and looking for a solution. Sooner or later, these costs will be reflected in the price of new vehicles. Today, I cannot estimate by how much.

The second reality is the trend among the younger generation. They do not want to own a car. They do not want to be burdened by assets. The annual fixed costs of car ownership, such as insurance, environmental taxes, city fees, parking fees, and road usage fees, are so high that if you do not use the car every day and do not drive hundreds of kilometers, they will cause a disproportionate increase in costs per kilometer driven. The younger generation will prefer to use taxi services and perhaps autonomous vehicles in the near future. The number of vehicles sold in Europe has fallen by an average of 2.6 million per year over the last six years; we have lost 13 million new car customers.

Today, we cry when we fail to sell a few thousand vehicles to the US due to increased import tariffs. But we are not at all concerned about our own European market and the loss of 13 million customers. Some politicians even welcome such an outcome and want everything in the EU to shift to, for example, bicycle transport. In our country, we have hills, and in winter it’s -15 degrees Celsius. Such thinking is out of touch with reality.

The EU automotive industry today is like Dr Jekyll and Mr Hyde.

The EU wants us to manufacture, demands our labor, and applauds us when we pay taxes.

That is the good Dr Jekyll. But when we want to sell our products to customers, those same politicians forbid us from doing so. For a large portion of them, the car is a political and class enemy. We are in the position of the bad guys, Mr Hyde. This schizophrenia, supported by a multitude of political statements, does not help us.

The future of transportation will remain. The form of personal vehicles will also remain. Personally, I believe that with the advent of autonomous vehicles, the new generation’s trend toward living in megacities, and the expansion of public transportation, the number of vehicles will decrease. Vehicle ownership will persist in specialized forms that will operate transportation as a service. But eventually, every vehicle will reach the end of its life cycle and ultimately be processed as ELV waste.