EU levies ELV recycling fines against 15 automakers

The European Commission (EC) has levied fines against 15 carmakers and a trade association representing them regarding systems they established to recycle end-of-life vehicles (ELVs).

The EC, an administrative body of the Brussels-based European Union, has levied fines totaling 458 million euros ($494 million) against the manufacturers and the Brussels-based European Automobiles Manufacturers' Association (ACEA).

The automakers and the ACEA have been fined for “participating in a long-lasting cartel concerning ELV recycling,” states the EC. The commission says Germany-based Mercedes-Benz was not fined, “as it revealed the cartel to the Commission under the leniency program.” All other companies, says the EC, “admitted their involvement in the cartel and agreed to settle the case.”

The EC says its investigation, in which it was joined by the government of the United Kingdom, revealed that for more than 15 years the 16 major automakers and the ACEA entered into anticompetitive agreements and engaged in concerted practices related to the recycling of ELVs in two discernible ways. 

Participants colluded to agree not to pay car dismantlers for processing ELVs, says the EC. “In particular, they agreed to consider the recycling of ELVs to be a sufficiently profitable business, and therefore not to remunerate car dismantlers for their services,” says the commission, labeling the practice as the “Zero-Treatment-Cost” strategy.

The companies also shared what the EC calls commercially sensitive information on their individual agreements with car dismantlers and coordinated their behavior toward dismantlers, says the commission.

Furthermore, according to the EC, the companies agreed not to promote how much of an ELV can be recycled, recovered and reused or how much recycled material is used in new cars.

“Their goal was to prevent consumers from considering recycling information when choosing a car, which could lower the pressure on companies to go beyond legal requirements,” says the commission.

“Today, we have taken firm action against companies that colluded to prevent competition on recycling,” says Teresa Ribera, the EC’s executive vice president for clean, just and competitive transition. “These car manufacturers coordinated for over 15 years to avoid paying for recycling services, by agreeing to not compete with each other on advertising the extent to which their cars could be recycled, and by agreeing to remain silent on the recycled materials used in their new cars.”

Adds Ribera, “High-quality recycling in key sectors such as automotive will be central to meeting our circular economy objectives, not only to cut waste and emissions, but also to reduce dependencies, lower production costs and create a more sustainable and competitive industrial model in Europe.”

Under EU Directive 2000/53/EC on ELVs, the last owner of an ELV must be able to dispose of it at no cost with a dismantler and, if needed, car manufacturers are obliged to bear the costs. Additionally, consumers are required to be informed about the recycling performance of new cars, says the EC.

The investigation found that the ACEA was the facilitator of the effort, says the EC, “having organized numerous meetings and contacts between car manufacturers involved in the cartel.”

A timeline published by the EC portrays several companies (and the ACEA) as having been involved in colluding starting in 2002, with other companies enlisted between 2006 and 2010. The EC timeline has the cartel ending its joint actions in 2017.

The list of fines shows Volkswagen ($137.8 million), Renault/Nissan ($87.9 million) and Stellantis ($80.9 million) as having received the largest penalties.

In the same press release announcing the fines, the EC says it has proposed funding incentives for the deployment of recharging infrastructure for electric vehicles (EVs). Additionally, the commission has launched what it calls a fact-finding exercise on how European companies procure and recycle certain critical raw materials used in the production of EVs.