Statement – 7^th November 2025

Compensation unprofitable material separation

In the proposal for a circular vehicle regulation, EPR (extended producer responsibility: the polluter pays) is described extensively. Recently the EU fined OEMs for almost half a billion Euros as they had formed a cartel in which they agreed to never pay any compensation to any ATF ever. Let us explain our vision on what we see as reasonable compensation and why it’s necessary.

OEMs favour an idea in which am ELV pays for it’s own processing. They state there’s so much value in the vehicle, this should compensate more than is necessary for all recycling/recovery operations. The way EPR is described in article 16 is slightly different: … producers shall have extended producer responsibility for vehicles that they make available on the market for the first time within the territory of a Member State.

Reason for EGARA to promote assessment of every mandated material removal, storage, collection and acceptance, is that we may face high costs for which we have no income. We will have to compulsory remove materials we do not now, as they represent no value. Even if (new) materials have value, it is expected not enough to cover costs (F.I. glass has a worth of € 30,-/tonne for which it can’t even be transported, apart from removal and storage costs). We need to invest in labour, space, means of storage and probably other unforeseen costs.

We are not asking for unreasonable compensation. We ask for compensation only, not for margins or profits. Materials that are or become profitable do not need to be compensated by OEMs. But we need to be able to run a profitable business in order to exist and to carry out our obligations. Car dismantling is economically profitable, but ATF’s make a modest profit. ATF’s have no share keepers or commissioners. New material streams without value will only take any profit down. If costs rise, ATFs cannot shift costs to consumers or other resources. It will only worsen our position towards the illegal sector, at least until a well-established market arises.

We need to be able to compete with the illegal sector as these do not bear the costs legal ATFs do. Both acquiring vehicles as parts sales will suffer if obligations become too high to pay for. Legal ATFs will have a disadvantage compared to illegals as ATFs have costs that illegals do not have. It will be hard to get the ELVs we need and it will be harder to make a profit at all as there will be unfair competition in parts prices. We face restriction on parts sales (Annex VII part E), meaning we have less funds to stay in business and illegals will sell anything we can’t.

The Cartel was fined for half a billion Euro’s for making a deal never to compensate any costs. Half a billion goes to the EU, not a cent will go to the dismantling sector, unless we are lucky to win a legal fight. And we will not get any compensation in the end if the whole vehicle will be taken into account

Pars sales is not an easy activity. Cars and parts are complicated. Parts numbers change all the time (the OEMs do this), parts are often used on a range of vehicles, but we need to find out ourselves which types, which years of manufacturing and which brands. We often have no idea about this interchange. The OEMs do not tell us this. Parts are also often digitally locked and OEMs do not really cooperate in unlocking them to promote reuse (but cars get more complicated every year). So their claim that there’s a lot of value in an ELV is true for the younger cars, but they are also the ones keeping the ATF from taking out all the value, even if parts supplies often are ceased after 10 years.

Recycled content may imply a fee will be given for some materials, but is not a guarantee for profit or at least cost neutral on the extra compulsory material removal. Recycled content is an obligation that only is compulsory in some years and only for a small percentage of the amount of removed material and not even for all materials. Our estimation is the OEMs will accept a very limited amount for free. We would be happy with a market for materials, rather than a compensation.

In the future, the share of EELVs (electrical ELVs) will increase. We estimate that EELVs become waste as soon as the battery is under 70%. The battery is so expensive (and many interpret battery reuse to shift EPR to sellers of used batteries, even if they are used directly (without any work or changes) for reuse), that a 15 year old vehicle will not receive a new battery. This will shorten the lifespan of an EELV, not many other parts will be necessary to keep an EV roadworthy for cheap, so revenues from spare-parts will be considerably lower than with ICE vehicles. In many countries ATFs face difficulties in having (unreliable) batteries collected, despite battery EPR. In short: for EELVs compensation for unprofitable material recycling is even more necessary than for Ice vehicles.

We have lots of articles about EPR, but it seems for OEMs it’s only about reporting about their own performance where ATFs actually perform EPR. It’s the OEMs obligation to pay for pollution, but this law just makes it easy to shift actual EPR to ATFs. The EU wants to be green, many ‘green’ laws are being made, but are they green or is it nothing but greenwashing? It seems it’s easier to state green intentions than to act green, as acting green is made hard to impossible.

EGARA is of opinion that in order to be actually green, circular and sustainable and to actually practice EPR, compensation of unreliable material separation is evident.