EU-End-of-life vehicles regulation

Opinion

Proposal of the European Commission for a regulation on circularity requirements for vehicle design and on management of end-of-life vehicles

(EU-End-of-life vehicles regulation) Langtitel, Beispiel: (Arial, 20 Pt, fett) Referentenentwurf/ Regierungsentwurf Gesetz zur Modernisierung der Netzentgeltstruktur

Federation of German Industries (BDI)

Date: 24.01.2024

BDI Statement End-of-life vehicles regulation

Table of Contents 1. Achieving a single market for circular vehicles............................ 3 2. Using the legislative process for practical corrections ................. 6 2.1 Scope of application (Art. 2) ........................................................ 6 2.2 Definition of terms (Art. 3) ........................................................... 6 2.3 Reusability, recyclability and recoverability of vehicles (Art. 4, Art. 34) ................................................................. 9 2.4 Requirements for substances in vehicles (Art. 5) ...................... 10 2.5 Minimum recycled content in vehicles (Art. 6) ........................... 10 2.6 Circularity strategy (Art. 9) ......................................................... 12 2.7 Circularity vehicle passport (Art. 13) .......................................... 13 2.8 Extended producer responsibility (Art. 16, 17, 18, 19, 20, 21, 22) ....................................................... 14 2.9 Collection of end-of-life vehicles (Art. 23, 24, 25, 26) ................ 16 2.10 Design of components and vehicles & treatment of end-of-life vehicles (Art. 7, Art. 27, 28, 29, 30, 31, 32, 33, 35, 36) ................... 17 2.11 Status and export of used vehicles (Art. 37 – 45); Enforcement (Art. 46 – 49) .............................................................. 19 About BDI ........................................................................................ 20 Imprint ............................................................................................. 20

BDI Statement End-of-life vehicles regulation

1. Achieving a single market for circular vehicles On 13th of July 2023, the European Commission published a proposal for a regulation on circularity requirements for vehicle design and on the management of end-of-life vehicles. This new European legal framework is intended to repeal two existing directives and replace them with a single piece of legislation, including Directive 2000/53/EC [on end-of-life vehicles] and Directive 2005/64/EC [on the type-approval of motor vehicles with regard to their reusability, recyclability and recoverability]. In addition, the new legislation will amend two existing regulations, including Regulation (EU) 2018/858 [on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles] and Regulation (EU) 2019/1020 [on market surveillance and compliance of products]. The proposal for an EU end-of-life vehicles regulation is part of the European Commission's Regulatory Fitness and Performance Programme (REFIT) with the aim of reducing bureaucracy and ensuring simplified legislation.

Similar to the Battery Regulation, which came into force on 17th of August 2023, a new EU end-of-life vehicles regulation aims to focus on the entire value creation cycle. Circular product design, the stages of production, collection and recycling are to be more closely interlinked as a value creation cycle and are addressed using various measures. Even though most of the provisions are intended for vehicles in classes M1 (passenger cars) and N1 (vans), individual provisions are intended to apply to other vehicle types as well.

At the same time, the proposal fits into the context of many other legislative procedures that are in progress, have already been completed, or have not yet been formally finalised and that address the Circular Economy: - Regulation on Batteries and Waste Batteries (EU) 2023/1542 of July 2023, which repealed Directive 2006/66/EC [on batteries and accumulators and waste batteries and accumulators] and amended Directive 2008/98/EC [on waste] and Regulation (EU) 2019/1020 [on market surveillance and product conformity].

Bundesverband der Deutschen Industrie e.V.

Lobbyregisternummer R000534

- Proposal for an EU Waste Shipment Regulation [on shipments of waste] of November 2021, which will also amend Regulations (EU) No 1257/2013 [on the recycling of ships] and (EU) 2020/1056 [on electronic freight transport information].

- Proposal for an EU Ecodesign Regulation [establishing a framework for the setting of ecodesign requirements for sustainable products] from March 2022. This is intended to replace the previous EU Ecodesign Directive (Directive 2009/125/EC).

Hausanschrift Breite Straße 29 10178 Berlin Postanschrift 11053 Berlin Ansprechpartnerin Inken Carina Sittler T: +493020281725 E-Mail: i.sittler@ice.bdi.eu Internet www.bdi.eu

BDI Statement End-of-life vehicles regulation

- Proposal for a regulation for a Critical Raw Materials Act [to create a framework to ensure a secure and sustainable supply of critical raw materials] from March 2023. In this context, Regulation (EU) 168/2013 [on the approval and market surveillance of two- or threewheel vehicles and quadricycles], Regulation (EU) 2018/858 [on the approval and market surveillance of motor vehicles and their trailers, and of systems components and separate technical units for such vehicles], Regulation (EU) 2018/1724 [on the establishment of a single digital gateway to information, procedures, assistance and problem-solving services] and Regulation (EU) 2019/1020 [on market surveillance and compliance of products] will be amended.

- Proposal for a Right to Repair Directive [on common rules promoting the repair of goods] of March 2023. The proposal will amend Regulation (EU) 2017/2394 [on cooperation between national authorities responsible for the enforcement of consumer protection laws], Directive (EU) 2019/771 [on contractual aspects of the sale of goods] and Directive (EU) 2020/1828 [on representative actions for the protection of the collective interests of consumers].

- Proposal for a European regulation on packaging and packaging waste. This is intended to repeal the previous Directive 94/62/EC [on packaging and packaging waste] and lead to amendments to Regulation (EU) 2019/1020 [on market surveillance and compliance of products] and Directive (EU) 2019/904 [on the reduction of the impact of certain plastic products on the environment].

The BDI welcomes the proposal for a regulation on circularity requirements for vehicle design and on management of end-of-life vehicles. The legal form of a regulation creates a harmonised framework for vehicles in all EU countries. However, the following points are crucial to the success of the regulation: - In view of the many other parallel legislative procedures, circularity requirements for vehicles should be regulated exclusively via the EU End-of-Life Vehicles Regulation as the basic legal act. This requires clear interfaces, for example with the Critical Raw Materials Act, a directive on the right to repair and a new EU Ecodesign Regulation, in order to avoid double regulation.

- We welcome the goal of increasing the use of recyclates in vehicles.

However, measures such as minimum recycled content quotas must be carefully evaluated in a test scheme for impact assessment for the individual material flows according to their proportionality and feasibility. Target definitions should therefore be based on a feasibility study with a view to supply and demand. Possible

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BDI Statement End-of-life vehicles regulation

regulatory interactions for other sectors and product groups must also be considered. Sufficient transition time must also be considered so that necessary investments can also be realised.

- The concept of the Circular Economy must be thought holistically.

Circular Economy Raw Materials include recyclates and waste for material recycling in general, which are returned to the cycle, but also by-products, renewable raw materials and CO2 extracted from processes and the air, when treated in accordance with the waste hierarchy under the Waste Framework Directive §4.

- The proposed regulation is part of the Regulatory Fitness Programme (REFIT) with the aim of "simplifying and reducing the administrative burden". The proposed regulation contradicts this objective in some respects. One example is Article 29 in conjunction with Annex VII, Part B, point 3. When exempting end-of-life vehicles from pollutants, the exact time of pollutant removal is to be specified, which constitutes an unnecessary documentation requirement. The reporting obligations pursuant to Art. 49, Para. 1 g (for the total number and weight of all parts, components and materials removed from end-oflife vehicles) and information requirements in the context of a certificate of destruction (Annex IX) must also be reevaluated accordingly.

- The concepts of a circularity strategy and a circular passport for vehicles must also be checked for inconsistencies, duplications, and their respective specific added value with each other and with other regulations such as the CSRD / ESRS, the Ecodesign Regulation (keyword: Digital Product Passport) and active IT-systems such as IDIS. This is the only way to minimise the bureaucratic effort associated with the regulation.

- Product design, collection, sorting, take-back and recovery in accordance with the waste hierarchy are key points in the draft regulation to keep end-of-life vehicles, their parts, components, and materials in circular flows. However, this requires harmonised, interlocking regulations within the EU internal market with clear responsibilities and legal certainty for the individual players. There is still room for improvement here, for example in the area of extended producer responsibility.

- The German draft regulation contains an incorrect translation regarding the terms “producer” and “manufacturer”. Both terms are used in the English version but translated with only one word (“Hersteller”) in the continuous text of the German version. A distinction should be made between manufacturer (“Erzeuger”) and

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BDI Statement End-of-life vehicles regulation

producer (“Hersteller”) of vehicles and both terms should be defined in Art. 3 "Definitions" (equivalent to the Battery Regulation (EU) 1542/2023).

- The general trend towards an increasing number of delegated and implementing acts in European legislation can also be observed in the draft for an End-of-Life Vehicles Regulation. Central elements of the regulation, such as the definition of calculation methods, are thus removed from the ordinary legislative procedure and should be regulated by the proposed regulation itself.

2. Using the legislative process for practical corrections 2.1 Scope of application (Art. 2) Art. 2 of the proposal defines the scope of application. Most of the provisions are to apply to vehicle categories M1 and N1 (cars and vans), while certain requirements relating to the disposal of end-of-life vehicles and export requirements are also to apply to certain vehicles in category L (vehicles in categories L3e, L4e, L5e, L6e and L7e), lorries, buses and trailers (vehicles in categories M2, M3, N2, N3 and O).

Requirements for practical specifications: - A gradual expansion of the scope of application across vehicle classes M1 and N1 is an important step towards a comprehensive scaling of the circular economy and serves to ensure fair competitive conditions.

However, this can only be achieved if requirements are designed consistently.

2.2 Definition of terms (Art. 3) Article 3 of the proposed regulation lists numerous definitions. Some of the terms listed are also the subject of discussion in parallel legislative procedures at European level, some of which have not yet been finalised.

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Term

Cross-reference

Discussion in further legislative procedures

Para. 1, nr. 10

„critical raw materials“

A cross-reference to the definition in the Critical Raw Materials Act in draft status is available.

Para. 2, e

„substance of concern“

A cross-reference to the EU Ecodesign Regulation in draft status is available.

Para. 1, nr. 11

„post-consumer waste“

There is reference.

no

cross-

The term is also mentioned in the proposal for a Critical Raw Materials Act but is not defined there under Art. 2. In the proposal on packaging and packaging waste, the term is defined specifically for the material flow under "consumer plastic waste" (Art. 3 (39)).

In other proposed regulations, such as an Ecodesign Regulation or a Waste Shipment Regulation.

Para. 1, nr. 29

refurbishment“

There is reference.

no

cross-

The proposal for an Ecodesign Regulation contains a proposed definition in Art. 2 (18).

The term is also listed in the proposal for a right to repair (Art. 2 (9)), in which there is a cross-reference to the Ecodesign Regulation.

Para. 1, nr. 9

„plastic“,

There is a cross-reference to an existing regulation (Regulation (EC) No. 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency).

The proposal for a packaging regulation also defines the term "plastic" and makes a crossreference to Regulation (EC) No. 1907/2006.

Para. 1, nr. 25

„secondary raw materials“

There is no crossreference.

The term is also defined in the proposal for a Packaging Ordinance. The term is not defined in the proposal for an Ecodesign Ordinance or in the proposal for a Critical Raw Materials Act.

Tabelle 1: Own illustration. Exemplary overview of terms in the field of Circular Economy in current European legislation.

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BDI Statement End-of-life vehicles regulation

Requirements for practical specifications: - The aim of the definitions should be to create a clear, legally secure and harmonised framework for the circular economy transformation.

Inconsistencies and duplications are to be avoided.

- The proposed definition of "substances of very high concern" is opposes the above objective. With regard to Art. 2 (28 c) in the proposal for an Ecodesign Regulation, the term is not clearly defined, meaning that many fully recyclable substances could fall into this category. Instead of introducing a new term, the term "substances of very high concern" already defined in REACH should be used.

Standardised analytical methods for sample preparation and analysis must exist for all substances. Otherwise, this requirement cannot be met.

- Newly introduced, centralised terms such as "post-consumer waste", "remanufacturing", "removal", "refurbishment" or "secondary raw materials” should be uniformly defined for substances and product groups at a central location, for example via the EU Ecodesign Regulation, unless otherwise justified for technical reasons or in the scope of application. The terms are currently sometimes mentioned or defined without reference to each other in different legislative proposals. Given the many parallel legislative procedures at European level, this significantly increases the risk of incompatible framework conditions.

- In order to increase the recyclability of plastics in vehicles, the underlying definition of "plastics" must be specifically designed for the scope of the respective regulation and include recyclable plastics with a view to planned recycling targets. For example, the definition in an EU end-of-life vehicle regulation should include all recyclable polymers as well as essential types of plastics in a vehicle, such as duromers (seat foams) and thermoplastic elastomers. A possible definition approach for the scope of the EU End-of-Life Vehicle Regulation could be based on Regulation (EU) No. 10/2011 [on plastic materials and articles intended to come into contact with food].

- The revision of the term "end-of-life vehicle" and a definitional distinction between "end-of-life vehicles" and "used vehicles" based on differentiated technical and economic assessment criteria is to be

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emphasised positively. For example, Annex I, Part a, points 1 and 2 define when a vehicle is classified as irreparable and therefore an "end-of-life vehicle".

2.3 Reusability, recyclability and recoverability of vehicles (Art. 4, Art. 34) In Art. 4, reusability, recyclability, and recoverability targets are set for each type-approved vehicle of a vehicle type (Para. 1). Manufacturers are to produce their vehicles in such a way that at least 85 per cent of the mass is "reusable or recyclable" and at least 95 per cent is "reusable or recoverable".

In addition to these targets for manufacturers, parallel targets for waste management operators in the member states are listed in Art. 34 (Para. 1). At least 95 per cent of the average vehicle weight per year (excluding batteries) should be reused and recycled by waste managers calculated together, and at least 85 per cent of the average vehicle weight per year (excluding batteries) should be reused and recycled.1 The Commission is to define the method for calculating and reviewing these targets by means of an implementing act by 35 months after the entry into force of the Regulation (Art. 4, para. 3).

Requirements for practical specifications: - In view of the objectives set out in Art. 4 and Art. 34, the same approach of assessment / the same calculation method should be used.

For example, batteries are excluded from the mass reference value in Art. 34, but not in Art. 4. Batteries should be included in the reference value and calculation in both articles to ensure both consistency in the calculation and the achievability of the targets.

- The wording of Art. 34 and Art. 4 should be harmonised. 85 percent of the mass of a vehicle should be "collectively calculated to be reusable and recyclable". Similarly, 95 percent of the mass of a vehicle should also be "collectively calculated to be reusable and recyclable".

- The new regulation is intended, among other things, to replace Directive 2005/64/EC [on type-approval of motor vehicles with

1

In the previous End-of-Life Vehicles Directive (Directive 2000/53/EC), the Commission already included targets for reuse and recovery (95 percent) as well as for reuse and recycling (85 percent) of the average vehicle weight per year, which must be met by "economic operators" (Art. 7, Para. 2).

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regard to their reusability, recyclability and recoverability]. It is to be expected that this will lead to inconsistencies with globally harmonised legislation such as UN Regulation No. 133 (UN / ECE R 133 tests). According to current legislation, most manufacturers use UN R 133 for type approval recycling, as this saves duplication of effort and costs.

2.4 Requirements for substances in vehicles (Art. 5) In Art. 1 (para. 1), the Commission sets out an obligation to minimize "substances of concern".

Requirements for practical specifications: - A general minimization obligation for "substances of very high concern" should be reviewed with regard to the aspects outlined in Chapter 2.2 (Definitions). New substance restrictions should be regulated centrally via REACH requirements and only in justified exceptional cases via the EU End-of-Life Vehicles Regulation.

2.5 Minimum recycled content in vehicles (Art. 6) Article 6 lays down specific requirements for a minimum recycled content for plastics. For example, 72 months after the regulation comes into force, each vehicle of a type-approved vehicle type must contain at least 25 percent by weight of recycled plastic from "post-consumer plastic waste". Of this 25 percent by weight, 25 percent should in turn consist of recycled plastics from end-of-life vehicles. The source for recycled raw materials is based solely on “Post-Consumer Recyclates”. The Commission is also to be given the option of using delegated acts not only to define the method for calculating and verifying the proportion of recycled materials, but also to subsequently introduce recycled material input quotas for steel, aluminum and its alloys, magnesium and its alloys, and rare earths. A feasibility study is to be carried out up to 23 months after the entry into force of the regulation to evaluate minimum recycled content quotas for steel, and 35 months after entry into force for the other materials mentioned.

Requirements for practical specifications: - The aim of improving the use and supply of recyclates in vehicles is expressly supported. However, measures such as minimum recycled

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content quotas must be carefully evaluated in a test scheme for impact assessment for the individual material flows according to their proportionality and feasibility. Target definitions should therefore be based on a feasibility study with a view to supply and demand.

Possible interactions, including those caused by regulation for other sectors and product groups (recycled content quotas in PPWR, Critical Raw Materials Act, Construction Products Regulation, etc.), need to be considered. The goal should be a self-sustaining, innovation-promoting and holistic Circular Economy.

- A method for calculating and verifying the recycled content must be available earlier and the transitional period of 72 months for achieving the required targets must only begin after the method has been published. This is the only way to give the industry the necessary certainty for implementation and the necessary investments.

- The circular economy requires a systemic approach. For this reason, the proposal for a closed-loop minimum recycled content quota must be re-evaluated in terms of its feasibility in practice as well as with a view to cross-value-added and cross-sectoral potential in terms of its usefulness and cost-effectiveness. In any case, the specific design of the mandatory quota - with two decimal places - should be rejected.

- Accompanying and in addition to minimum recycled content quotas, a target quota for non-fossil input materials (renewable raw materials and CO2) should be integrated into the draft regulation and the impact assessment.

- In the case of minimum recycled content quotas with the aim of increasing demand ("pull measure"), it must be ensured that the availability of recyclates that can be used in the production of materials and goods can also be demonstrably ensured in the required quality in the foreseeable future and is advantageous for ecological reasons with regard to climate and resource protection. With a view to the objectives in the draft regulation, in addition to prioritizing mechanical recycling, acceptance of chemical recycling including mass balancing approaches ("fuel use exempt") is also required in order to initiate the necessary investments in Europe and Germany.

In order to guarantee the priority of mechanical recycling, it is necessary for the design for recycling of plastics to be orientated towards mechanical recycling. In addition to recyclability and

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reparability, product design can also significantly influence the quality of recyclates and is therefore of central importance for improving the supply of recyclates and for the recycling of material flows in general.

- Equivalent to the Battery Regulation (EU) 2023/1542 and the proposal for a regulation for packaging and packaging waste, a reservation in the exceptional case of a lack of availability of recyclates for the actual obligation to use recyclates should be prioritized, especially with regard to the mandatory use of recyclates from closed-loop recycling (Art. 6, para. 1, subpara. 1). The specification will have to be formulated in such a way that it ensures the necessary investment security in the recycling infrastructure and at the same time can counteract market distortions.

2.6 Circularity strategy (Art. 9) According to Art. 9 (Para. 1), manufacturers must submit a circular economy strategy for each type-approved vehicle type 36 months after the Regulation comes into force. The manufacturer shall submit a copy of the strategy to the Commission within 30 days of type-approval for each vehicle type. The manufacturer must then update this strategy every five years and submit an adapted version to the type-approval authority and the Commission. Annex IV Part A lists mandatory elements of such a strategy, including a nontechnical description of measures and procedures as well as information obligations, including on recycled content in vehicles in accordance with Art. 6 and 10. The Commission is also to be empowered under Art. 9 to publish the strategy and its updates, excluding confidential information.

Requirements for practical specifications: - The circular economy needs to be strategically planned for companies as a whole and requires an overarching perspective within the company as well as new value creation models that also redefine trading relationships with suppliers and customers. A type-specific circularity strategy stands in the way of this kind of overarching thinking and approach. Instead, a holistic circular economy strategy for manufacturers should be prioritized at company level.

- We expressly welcome the fact that, according to the proposal, confidential information on a circular economy strategy should not be

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made accessible to the public. This is the only way to ensure the competitiveness of the stakeholders. Access and the type of information collected should be determined in dialogue with the stakeholders concerned.

- With regard to the mandatory elements of a circularity strategy listed in Annex IV Part A, the decisive scope for action lies with waste management operators (recyclers) in point 6 (report on measures such as investments in research and development, investments in the development of recycling technologies or infrastructures). The manufacturers' scope for action lies rather in product design (durability, reusability, reparability, recyclability, etc.), in line with the objectives in Art. 4. Assessment criteria for "recyclability" are to be defined here, for example, via the regulation itself via Art. 4. A clear scope for action with realistically implementable requirements for the respective stakeholders must be defined in dialogue with manufacturers and waste management operators / recyclers.

- The requirements in Annex IV relate partly to the vehicle itself and partly to the OEM's strategy. Annex IV Parts A and B contain several requirements that cannot be controlled by OEMs or "measured" or "assessed" by OEMs (e.g. requirements in Part A, 5.c or Part A, 7).

- Duplications and inconsistencies of a circularity strategy (Art. 9), a circular passport for vehicles (Art. 13) and other regulation such as CSRD / ESRS should be avoided, and the respective specific added value should be evaluated.

2.7 Circularity vehicle passport (Art. 13) 84 months after entry into force, every vehicle placed on the market should also have a cycle passport (Art. 13), which provides digital and free information in accordance with Art. 11 (information on the removal and replacement of parts, components, and materials in vehicles). The manufacturer shall be responsible for the completeness and accuracy of the information and for keeping the information up to date (para. 3).

Requirements for practical specifications: - Congruence with other legal acts such as ESPR for a digital product passport, the digital battery passport under the Battery Regulation

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(EU) 2023/1542 and active IT-systems such as the publicly accessible IT system IDIS (International Dismantling Information System) must be ensured. Existing databases should be used, and data should not be stored twice.

- Manufacturers can only guarantee the completeness, accuracy, and timeliness of the information at the time of production, but not beyond. Actors further down the value chain have a significant influence on the data, for example with regard to maintenance and repair.

- Creating a useful digital cycle passport for vehicles that can be used along the supply chain will be a major challenge. Regardless of the final solution, it must be ensured at all times that confidential information, for example on substances contained etc., is handled as such. Information must therefore only be disclosed based on the "need-to-know" principle. This also applies to metadata on supply chains. Information on this can reveal value creation networks and be misused by competitors or state actors. It is therefore necessary to choose technically secure, decentralized solutions for data management.

2.8 Extended producer responsibility (Art. 16, 17, 18, 19, 20, 21, 22) 36 months after the entry into force of the Regulation, producers are to provide extended producer responsibility for vehicles placed on the market for the first time (Art. 16) to ensure the collection and treatment of end-oflife vehicles. In addition, producers are to ensure that waste management operators meet targets in accordance with Art. 34 (Art. 16 b). To this end, producers are to register in a national producer register, which is to be set up by the Member States within 35 months of the Regulation coming into force (Art. 17). Producers can appoint an organization as an authorized representative to carry out the obligations within the scope of an extended producer responsibility (Art. 18, Para. 1).

Within the framework of extended producer responsibility, producers should contribute to the costs of collecting end-of-life vehicles and for awarenessraising campaigns (Art. 20), in the case of individual compliance under a guarantee, for example by means of recycling insurance. In the case of collective compliance, the respective designated organizations must adjust

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the financial contributions of the producers taking into account various criteria (Art. 21). Art. 22 also regulates the cost allocation mechanism for vehicles that become end-of-life vehicles in another member state.

Requirements for practical specifications: - If properly designed, extended producer responsibility can be an effective and appropriate means of ensuring that vehicles, their components and parts are returned to the value creation cycle. This requires a legally secure (contractual) basis between producers and waste management operators. The take-back and treatment of a producer's end-of-life vehicles should therefore be carried out by those waste management operators that have been contractually appointed by the respective producers. The involvement of smaller companies must be guaranteed. With regard to Art. 20 (Para. 1, a), the financial responsibility of the producers should consequently only relate to contractually defined waste management operators and a possible deficit compensation should be negotiated between the contracting parties.

-

With regard to Art. 4 (targets), manufacturers have a partial responsibility through product design to ensure that waste management operators can fulfil their obligations under Art. 34.

Beyond the objectives relating to product design, the responsibility for fulfilling the obligations lies with the waste management operators (Art. 16, b).

-

Possible barriers to high-quality recycling and dismantling as in Art. 21 (Para. 1, e), Annex IV (Part A, No. 5, d) and Annex IX (Part B, No. 3, c) should be reviewed and justified on the basis of various criteria such as safety and sustainability aspects (in proportion to recyclability). For example, joining technologies such as adhesives can play a positive role in safety and sustainability aspects in lightweight construction and e-mobility. In addition, the technological recycling of composite plastics is already possible thanks to various options, e.g. in case of housings to encase electric vehicle batteries. Here, recycling has not (yet) established on the market because, on the one hand, relatively little material is accumulated (lack of economies in scale) and, on the other hand, related components are not dismantled before shredding.

Furthermore, the term "high-quality recycling" is not defined.

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- Art. 21 (para. 1, e) mentions dismantling time as a further criterion for modelling the fee. However, it must be determined how this dismantling time is to be determined objectively in view of very different dismantling facilities on hand.

2.9 Collection of end-of-life vehicles (Art. 23, 24, 25, 26) Art. 23 obliges producers to set up collection systems, including collection points, for vehicles of their vehicle classes, if necessary, also via designated producer organizations (para. 1). In doing so, producers are to ensure a number of points (Para. 2, a - e), including that there is "adequate availability" of authorized recovery facilities throughout the Member States. According to Art. 24, end-of-life vehicles may be handed over free of charge to the last owner at authorized treatment facilities, unless essential parts and components of the vehicle are missing, except for the electric vehicle battery.

Requirements for practical specifications: - The competencies and responsibilities of producers and waste management operators must be clearly delineated. In the sense of extended producer responsibility (see points in chapter 2.7), the producer should be able to independently define collection systems with contractually defined waste management operators.

- In line with other legislation on extended producer responsibility, producers should also have the option of taking back their waste via their retail outlets if these are certified as collection points. The prerequisite here must be proper registration as a collection centre in accordance with Art. 26(1)(a). Art. 23 para. 4 should be amended accordingly and requirements for collection centres should be formulated in a separate article.

- End-of-life electric vehicles and their traction batteries are a typeapproved system and should always be disposed of as a single unit at environmentally certified collection points or dismantling facilities, for safety reasons among others. Acceptance of the trade in used traction batteries by non-commercial traders would also pave the way for illegal players.

- Art. 25 offers an important step towards more transparency and circular economy with the introduction of a certificate of destruction

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in electronic form. With regard to Art. 26, it can be added that owners must also have an incentive to actually hand in their end-of-life vehicles. Only in this way end-of-life vehicles, their parts, components, and materials ultimately can be recycled, and a certificate of destruction issued. Mandatory ongoing insurance payments for non-returned irreparable end-of-life vehicles and temporarily limited deregistration should be evaluated as possible incentive measures.

2.10 Design of components and vehicles & treatment of end-oflife vehicles (Art. 7, Art. 27, 28, 29, 30, 31, 32, 33, 35, 36) Art. 7 in conjunction with Annex VII Part C lays down certain design requirements for the removal and replacement of certain parts and components in vehicles. According to Art. 27, authorized recovery facilities should meet requirements regarding techniques, storage and recovery of endof-life vehicles, their parts, components, and materials. For example, parts and components listed in Annex VII (Part C) must be removed from the endof-life vehicle by manual dismantling or (semi-) automatic dismantling before shredding or compaction and tested for possible reuse, reconditioning or overhaul (Art. 27, c; Art. 30). According to Art. 33, Member States are to promote the reuse, remanufacturing and overhaul of parts and components through incentive systems, for example through economic incentives such as a reduced rate for value added tax for "used, remanufactured or refurbished spare parts and components", until 36 months after the Regulation comes into force.

Requirements for practical specifications: - Measures pursuant to Art. 27 - 36 can significantly improve the supply side of recyclates in terms of quantity and quality. For example, the ban on mixing packaging waste, waste electrical and electronic equipment with end-of-life vehicles, their parts, components and materials (Art. 28, para. 3) and the ban on landfilling non-inert waste (Art. 35) should be emphasized positively.

- The list of parts and components listed in Annex VII Part C should be revised according to ecological and economic aspects along the entire value chain (including remanufacturers, logistics, raw materials industry, car manufacturers and suppliers). Removal obligations for

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components must be technically feasible and should be reasonable and proportionate in terms of the effort involved.

- Electric vehicle batteries are already included for a mandatory removal in Annex C. In addition, structures or casings for wrapping electric vehicle batteries should be added separately to the list. The structures and casings of the casing should be removed from the rest of the battery at the time of dismantling the battery or at the battery recycling plant. This can increase the recycling of composite plastics.

- The current legal situation already poses the problem that petrol tanks are often merely neutralised instead of being completely removed.

The wording of the proposed regulation should be adapted with regard to Annex VII Part B and Annex VII Part C so that gas and petrol tanks must be removed in a clear interpretation in order to prevent explosion hazards during shredding.

- In the case of combustion engines and the gearbox, it should be possible to check on a case-by-case basis whether it makes sense to dismantle them before shredding. With regard to existing postshredder technologies, the possibility of exemption from Art. 30 (2) should be applicable for combustion engines, gearboxes and glass.

- With regard to Art. 7, it is not technically possible to remove the entire cable harness in view of its length and connection to various components. A clear specification of a part to be removed (removable) would be necessary here. A clear definition of monomaterial components is also required. In addition, the wording of the requirement in Art. 7 (1) that the removal of parts and components in Annex VII Part C "shall not be prevented by their design" should be clarified.

- The foreseen timetable for the requirements for the components listed in Annex VII Part C in Art. 7, Art. 27 and Art. 30 must be coordinated.

- With a view to free competition, Art. 27 (para. 5) should not be limited to selected environmental management systems but should allow all recognized and established environmental management systems.

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BDI Statement End-of-life vehicles regulation

2.11 Status and export of used vehicles (Art. 37 – 45); Enforcement (Art. 46 – 49) In addition to a distinction between "used vehicles" and "end-of-life vehicles", the export of used vehicles is only permitted 36 months after the entry into force of the Regulation if vehicles do not meet the criteria for endof-life vehicles (Art. 38, Para. 3, a) and are deemed to be roadworthy (Art. 38, Para. 3, b). Customs authorities should be able to use electronic and automatic systems to evaluate the vehicle and registration status (Art. 39, Art. 45). For the evaluation and enforcement of measures, cooperation between authorities at national level, at Member State level and with third countries should also be promoted (Art. 44; Art. 47). The Member States should not only implement sanctions (Art. 48) but are also obliged to report to the Commission (Art. 49).

Requirements for practical specifications: - A distinction between "used vehicles" and "end-of-life vehicles" (Art. 3 and Art. 37), regulations on controls and requirements for the export of used vehicles (Art. 38) and the possibility of suspending the export of certain used vehicles (Art. 41) are the right measures for the successful recycling of vehicles and can contribute to an improvement in the supply of raw materials for German and European industry and, not least, to greater road safety in third countries. The roadworthiness test should also be carried out for intra-European shipments of used vehicles.

- Smooth cooperation between authorities at national level and EU member states is essential to enable end-of-life vehicles, their parts, components, and materials to be returned to the cycle. Articles 39, 44, 45 and 47 can have a positive impact on this aspect, for example through greater data transparency and digital data collection.

However, the associated administrative costs must be minimized.

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BDI Statement End-of-life vehicles regulation

About BDI The BDI conveys the interests of German industry to those with political responsibility. In this way, it supports companies in global competition. It has an extensive network in Germany and Europe, in all important markets and in international organizations. The BDI provides political support for international market development. And it provides information and economic policy advice on all industry-related issues. The BDI is the umbrella organization of German industry and industry-related service providers. It speaks for 39 industry associations and more than 100,000 companies with around eight million employees. Membership is voluntary. 15 state representatives represent the interests of industry at regional level.

Imprint Federation of German Industries (BDI) Breite Straße 29, 10178 Berlin www.bdi.eu T: +49 30 2028-0 Lobby Registry R000534 Transparenzregisternummer: 1771817758-48

Contact Inken Carina Sittler Senior Manager BDI-Initiative Circular Economy T: +493020281725 i.sittler@ice.bdi.eu BDI document number: D 1878

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