Europe’s automotive sector could play a central role in expanding plastic recycling as manufacturers prepare for stricter requirements on recycled materials. More than 800,000 metric tons of plastic from end-of-life vehicles are currently burned or sent to landfill each year, while only a small fraction returns to new cars.

New European rules are intended to change that by encouraging manufacturers to rethink everything from materials and vehicle design to dismantling and recycling systems.

New Cars Will Need More Recycled Plastic

The EU’s updated End-of-Life Vehicles Regulation entered into force in August 2026. It requires recycled plastic to account for at least 15% of the plastic used in new vehicles from 2032, increasing to 25% from 2036. The wider framework also promotes easier dismantling, greater reuse of components and better recovery of valuable materials.

The scale of the challenge is significant. Around 10.8 million new passenger cars were registered in the EU in 2025, and a typical vehicle contains approximately 200–240 kg of plastic.

Meeting the first target could therefore require roughly 350,000 metric tons of recycled automotive plastic annually. Currently, no more than 2.5% of plastic recovered from end-of-life vehicles is used in new cars.

Old Cars Become A New Resource

The Global Impact Coalition brought together eight chemicals and waste-industry companies to test whether plastics from old cars could be returned to automotive production.

The pilot involved 100 end-of-life vehicles, which were dismantled, shredded and sorted. Researchers explored a combination of mechanical and chemical recycling to determine whether recovered plastics could reach the quality required for new vehicles.

GIC chief executive Charlie Tan explained that sufficient raw material already exists, but the infrastructure needed to turn it into reliable automotive-grade feedstock remains underdeveloped. The project demonstrated that recycling is technically possible, although costs and supply-chain economics remain major obstacles.

Carmakers Could Drive Demand

Automakers occupy an unusual position because they can become both suppliers and customers within the same recycling system.

Old vehicles provide large quantities of recoverable material, while manufacturers will simultaneously need increasing volumes of recycled plastic for new cars. This connection could give chemicals companies the long-term demand they need before committing money to larger recycling facilities.

Ana Sofia Almagro of the GIC said this unusually close relationship between recovered materials and automotive demand could provide an important signal for future investment.

Cars Must Become Easier To Recycle

A major problem is the way vehicles are currently built. Components can contain several types of plastic joined by bolts, adhesives or welding, making clean separation difficult.

Volkswagen sustainability chief Dirk Voeste said manufacturers are examining how future vehicles can use fewer polymers while also being easier to dismantle. Designing components differently could reduce the time and expense involved in recovering materials.

Audi is pursuing a similar approach through its Material Loop project, which examines recycling systems for plastic as well as steel, aluminium and glass.

Chemical Recycling Needs To Scale

Mechanical recycling has limitations because plastic quality can deteriorate after repeated processing. Chemical recycling can instead break waste down into chemical building blocks suitable for producing high-quality material.

Yet Europe currently has only around 0.29 million metric tons of operational chemical recycling capacity, compared with a planned project pipeline of approximately 2.8 million tons.

Digital traceability will also become increasingly important. The new rules introduce vehicle circularity documentation designed to provide information about materials and components, helping dismantlers recover them more efficiently.

The automotive sector could therefore become an important testing ground for large-scale circular manufacturing. If manufacturers, recyclers and chemicals companies can build a commercially viable system, the lessons could eventually extend far beyond cars.