Innovative requirements could boost circular economy of plastics and critical raw materials in vehicles

Two new JRC studies present a set of actions that could contribute to making the EU automotive sector more circular. They propose mandatory targets for the use of recycled plastics, as well as measures to increase the recycling and reuse of critical raw materials (CRM) and other materials (e.g. rare earth elements, copper and palladium) in new vehicles. These JRC studies helped shape the new vehicle regulation proposal unveiled today by the European Commission.

Ensuring better circularity, sustainability and supply chains resilience of the European automotive sector is crucial for the EU Green Deal and the EU open strategic autonomy. The same goals have been the cornerstone of several car manufacturers’ strategies and roadmaps. However, the numbers show that there is a long way to go to achieve these objectives.

Only 19% of the plastic fractions recovered after shredding of end-of-life vehicles are currently sent to recycling. Moreover, critical raw materials (CRM), such as rare earth elements in electric drive motors or palladium in embedded electronics, are generally not recovered after shredding. Yet new vehicles could use these resources: around 10% of total EU plastic demand and around 9% of EU copper demand are new vehicles entering the market. In addition to this, the automotive industry employs materials derived from more than 60 raw materials.

The shift towards electric cars will also bring new challenges: it will increase the need for palladium, used for embedded electronics, as well as for copper and for rare earth elements, used in the permanent magnets (REPM) in most electric drive motors. For instance, the expected new cars’ demand of neodymium and dysprosium (two major materials needed for REPM) are respectively 4025 tonnes and 620 tonnes by 2050, respectively a 10-fold and 7-fold increase compared to 2020 demand (see additional information from the JRC foresight study on strategic technologies and sectors in the EU).

The proposed regulation could improve both plastics and automotive value chains, and prepare the ground for increased circularity of palladium, copper, and rare earth elements from end-of-life vehicles.

At present, less than 10% of recycling facilities across the EU can efficiently sort and recycle plastic fractions coming from end-of-life vehicles. The JRC report on recycled plastic content targets in new vehicles found that promoting the use of recycled plastics in new vehicles and a better end-of-life management for plastics embedded in vehicles could help the car and plastic industries to develop more circular production systems.

Based on this assessment, the European Commission is proposing mandatory recycled content targets for new cars and vans under 3.5 tonnes. This would strengthen the market for recycled plastics and nudge the automotive industry to develop more ambitious recycling practices. Such a policy intervention could cut oil use by up to 4 million barrels in 2030. This measure would be the first of its kind, as similar requirements have never been proposed before for complex industrial products.

For critical raw materials and other materials in vehicles, the challenge is to increase collection of end-of-life vehicles and separation of CRM relevant components and materials, and to finally make recycling possible. At present, manufacturers do not design vehicles with the recycling of these materials in mind, and recyclers do not look for them in end-of-life vehicles. This is particularly the case of palladium used in vehicles-embedded electronics, copper, and rare earth elements used in the REPM magnets that are found in most electric drive motors.

Building on the JRC report on circularity of CRMs in vehicles, the European Commission proposed four policy provisions that cover both design and end-of-life phases:

By doing so, the EU is paving the way to recover up to 350 tonnes of rare earth materials in 2035, and up to 1400 tonnes of these materials in 2040, covering circa 12% to 13% of the expected rare earth electric drive motors demand in 2040. These requirements would also contribute to the objectives of EU strategic autonomy and of the CRM Act.

The European Green Deal (EGD) is the main strategy roadmap to ensure Europe’s 2050 climate neutrality, clean and circular economy, optimisation of resources, and minimisation of pollution. The Fit for 55, the Circular Economy Action Plan (CEAP) and the new Industrial Strategy for Europe develop EGD objectives.

In this context, the European Commission is investigating several measures to increase circularity of vehicles, committed in the CEAP, and linked to the CRMA objective, open strategic autonomy, as well as the EU competitiveness.

JRC reports were produced in the framework of the joint revision of End-of-Life Vehicles (ELV) 2000/53/EC Directive, and the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability (3RTA) 2005/64/EC Directive.