Paving the Way: EU Policy Action for Automotive Circularity

The report argues that the EU must shift from tailpipe-only emission metrics to a life-cycle perspective to avoid shifting emissions to the production phase as battery electric vehicles (BEVs) scale. It recommends a three-pronged policy approach: creating cross-cutting market enablers (such as digital product passports), reshaping economic incentives (including carbon pricing and VAT reductions for repairs), and strengthening existing legislation like the End-of-Life Vehicles (ELV) Directive to prioritize high-value retention over simple recycling.

• Road transport is a major environmental driver, accounting for 20% of Europe's carbon emissions, while vehicle material emissions are projected to constitute 60% of total vehicle life-cycle emissions by 2040.
• Current EU CO2 performance standards are insufficient because they only regulate tailpipe emissions, which may lead to a shift of emissions to the build and end-of-life phases as the industry transitions to battery electric vehicles (BEVs).
• The report identifies a significant failure in vehicle tracking within the EU, with approximately one-third of end-of-life vehicles ending up in unknown whereabouts, often due to illegal exports and treatment.
• The End-of-Life Vehicles (ELV) Directive is criticized for focusing on weight-based recovery targets, which encourages 'downcycling' into low-value materials like construction steel rather than high-value circularity.
• A circular automotive scenario could reduce emissions by up to 75% per passenger kilometre by 2030 compared to baseline scenarios, provided that energy decarbonization, material circularity, lifetime optimization, and utilization improvement are combined.
• The report recommends using the EU Taxonomy for Circular Economy to channel public and private capital into specific circular activities, including remanufacturing, refurbishment, and shared mobility.
• To increase vehicle utilization, the report suggests reshaping pricing systems to disincentivize private car ownership, such as increasing resident parking fees and reducing VAT for shared mobility.
• The report advocates for the implementation of mandatory recycled content quotas for critical materials, including battery materials, steel, aluminium, copper, and plastics, to break the cycle of high secondary material prices and low demand.
• Remanufacturing is highlighted as a high-impact lever, capable of reducing emissions by 70% to 90% compared to new production, yet it is hindered by a lack of technical information and standardized certification.

APA

World Economic Forum (2021). Paving the Way: EU Policy Action for Automotive Circularity. https://www3.weforum.org/docs/WEF_Circular_Cars_Initiative_Paving_the_Way_2021.pdf

Chicago

World Economic Forum. Paving the Way: EU Policy Action for Automotive Circularity. 2021. https://www3.weforum.org/docs/WEF_Circular_Cars_Initiative_Paving_the_Way_2021.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Paving the Way: EU Policy Action for Automotive Circularity |date=June 2021 |url=https://www3.weforum.org/docs/WEF_Circular_Cars_Initiative_Paving_the_Way_2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2021paving, author = {{World Economic Forum}}, title = {{Paving the Way: EU Policy Action for Automotive Circularity}}, institution = {World Economic Forum}, year = {2021}, month = jun, url = {https://www3.weforum.org/docs/WEF_Circular_Cars_Initiative_Paving_the_Way_2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }