Insurance Europe has called for greater clarity on the definition of ELVs (End of Life Vehicles) and reparability criteria for vehicles used in the European Commission’s proposal circularity requirements for vehicle design and on management of end-of-life vehicles. It argues that the current form would leave ambiguity on several important issues and doesn’t build strong enough reparability criteria.

The European Commission proposal aims to harmonize and ensure that vehicles are designed, produced and treated at their end of life (ELV) in a sustainable way, thus contributing to the objectives of the European Green Deal.

In its response to the proposal, Insurance Europe expressed its full support for the circular management of vehicles throughout their life cycle, and backed the approach that it believes will strengthen infrastructure and establish a European regulatory framework to support the use of recycled repair parts.

Nevertheless, Insurance Europe has firstly called for greater clarity on the definition of ELVs and reparability criteria for vehicles. It argues that it would leave ambiguity on who is responsible for verifying the reparability criteria, while the criteria themselves are vague and should be revised.

Secondly, Insurance Europe welcomes the proposal's circularity requirements of vehicle design. However, Insurance Europe argues that when it comes to electric vehicle batteries, the critical aspect of repair at a component level should not be overlooked. A lack of standards for component-level repair may compromise the effectiveness of the draft EU legislation.

Thirdly, with regard to the proposal to include a mandatory collection of ELVs, the federation argues that it may limit the ability by insurers to “manage” wrecks after classifying them as total losses. This, Insurance Europe argues, could lead to a situation whereby wrecks lose measurable value post-damage, as manufacturers gain economic profit by reusing vehicles obtained at no cost.

Finally, Insurance Europe proposes that a new provision is needed that allows insurance companies to incorporate recovered (used/not new) spare parts into the calculation of vehicle repair costs. Without such a provision, individuals affected in accidents will have no motivation to choose recycled spare parts, which would severely restrict the market for such parts.