As trilogue negotiations on the End-of-Life Vehicles Regulation (ELVR) reach their decisive phase, Europe stands at a crossroads, not just for the future of sustainable mobility, but also for the future of its industrial base and competitiveness.
The debate over whether recycled plastic content in new vehicles should be 15, 20 or 25 percent is crucial as a key driver for circularity investment in Europe’s plastics and automotive value chains for the next decade and beyond. The ELVR is more than a recycled content target. It is also an important test of whether and how Europe can align its circularity and competitiveness ambitions.
Circularity and competitiveness should be complementary
Europe’s plastics industry is at a cliff edge. High energy and feedstock costs, complex regulation and investment flight are eroding production capacity in Europe at an alarming rate. Industrial assets are closing and relocating. Policymakers must recognize the strategic importance of European plastics manufacturing. Plastics are and will remain an essential material that underpins key European industries, including automotive, construction, healthcare, renewables and defense. Without a competitive domestic sector, Europe’s net-zero pathway becomes slower, costlier and more import-dependent.
Without urgent action to safeguard plastics manufacturing in Europe, we will continue to undermine our industrial resilience, strategic autonomy and green transition through deindustrialization.
The ELVR can help turn the tide and become a cornerstone of the EU’s circular economy and a driver of industrial competitiveness. It can become a flagship regulation containing ambitious recycled content targets that can accelerate reindustrialization in line with the objectives of the Green Industrial Deal.
Policymakers must recognize the strategic importance of European plastics manufacturing. Without a competitive domestic sector, Europe’s net-zero pathway becomes slower, costlier and more import-dependent.
Enabling circular technologies
The automotive sector recognizes that its ability to decarbonize depends on access to innovative, circular materials made in Europe. The European Commission’s original proposal to drive this increased circularity to 25 percent recycled plastic content in new vehicles within six years, with a quarter of that coming from end-of-life vehicles, is ambitious but achievable with the available technologies and right incentives.
To meet these targets, Europe must recognize the essential role of chemical recycling. Mechanical recycling alone cannot deliver the quality, scale and performance required for automotive applications. Without chemical recycling, the EU risks setting targets that look good on paper but fail in practice.
However, to scale up chemical recycling we must unlock billions in investment and integrate circular feedstocks into complex value chains. This requires legal clarity, and the explicit recognition that chemical recycling, alongside mechanical and bio-based routes, are eligible pathways to meet recycled content targets. These are not technical details; they will determine whether Europe builds a competitive and scalable circular plastics industry or increasingly depends on imported materials.
A broader competitiveness and circularity framework is essential
While a well-designed ELVR is crucial, it cannot succeed in isolation. Europe also needs a wider industrial policy framework that restores the competitiveness of our plastics value chain and creates the conditions for increased investment in circular technologies, and recycling and sorting infrastructure.
We need to tackle Europe’s high energy and feedstock costs, which are eroding our competitiveness. The EU must add polymers to the EU Emissions Trading System compensation list and reinvest revenues in circular infrastructure to reduce energy intensity and boost recycling.
Europe’s recyclers and manufacturers are competing with materials produced under weaker environmental and social standards abroad. Harmonized customs controls and mandatory third-party certification for imports are essential to prevent carbon leakage and ensure a level playing field with imports, preventing unfair competition.
To accelerate circular plastics production Europe needs a true single market for circular materials.
That means removing internal market barriers, streamlining approvals for new technologies such as chemical recycling, and providing predictable incentives that reward investment in recycled and circular feedstocks. Today, fragmented national rules add unnecessary cost, complexity and delay, especially for the small and medium-sized enterprises that form the backbone of Europe’s recycling network. These issues must be addressed.
Establishing a Chemicals and Plastics Trade Observatory to monitor trade flows in real time is essential. This will help ensure a level playing field, enabling EU industry and officials to respond promptly with trade defense measures when necessary.
We need policies that enable transformation rather than outsource it, and these must be implemented as a matter of urgency if we are to scale up recycling and circular innovations and investments.
A defining moment for Europe’s competitiveness and circular economy
Circularity and competitiveness should not be in conflict; together, they will allow us to keep plastics manufacturing in Europe, and safeguard the jobs, know-how, innovation hubs and materials essential for the EU’s climate neutrality transition and strategic autonomy.
The ELVR is not just another piece of environmental legislation. It is a test of Europe’s ability to turn its green vision into industrial reality. It means that the trilogue negotiators now face a defining choice: design a regulation that simply manages waste or one that unleashes Europe’s industrial renewal.
These decisions will shape Europe’s place in the global economy and can provide a positive template for reconciling our climate and competitiveness ambitions. These decisions will echo far beyond the automotive sector.
Disclaimer
POLITICAL ADVERTISEMENT
- The sponsor is Plastics Europe AISBL
- The advertisement is linked to policy advocacy on the EU End-of-Life Vehicles Regulation (ELVR), circular plastics, chemical recycling, and industrial competitiveness in Europe.
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