The Global Impact Coalition outlines the measures needed to help the chemical industry close the loop on automotive plastics.
Every year, more than 800,000 tonnes of plastic from end-of-life (ELV) vehicles in Europe are incinerated or landfilled. The automotive industry accounts for around 10% of global plastic demand. Yet, despite decades of sustainability commitments, less than 2.5% of plastic in new vehicles comes from recycled sources. The EU ELV regulation now requires that figure to reach 25% by 2036.
The gap is not a technology problem. It is a value chain problem and solving it requires something the chemical industry has rarely attempted at scale: pre-competitive collaboration between competitors.
In 2025, the Global Impact Coalition (GIC) launched the Automotive Plastics Circularity project to do exactly this.
What the pilot did
Eight major chemical companies – BASF, Covestro, LG Chem, LyondellBasell, Mitsubishi Chemical Group, SABIC, SUEZ and Syensqo – worked together through GIC to process 100 end-of-life vehicles through a full dismantling, shredding, and sorting chain. The project was designed to answer a question no single company had been willing or able to answer alone: can plastics from end-of-life vehicles be recovered and processed into material suitable for recycling at a scale that reflects real-world conditions?
The answer, published in GIC’s Phase 1 report, is yes. Approximately eight metric tonnes of plastic were recovered from vehicles of varying ages, makes, models, and conditions. The pilot demonstrated that plastic components can be extracted, sorted by polymer type, and processed into material suitable for recycling. The technical pathway exists.
But the report is equally clear on what does not yet exist: a commercially viable value chain that allows this work at scale.
Why technical proof is only the beginning
The primary barriers identified in the Phase 1 findings are not technological. They are structural. Dismantling is complex and labour intensive. Sorting requires significant investment in automation and polymer identification technology and, critically, there is no committed downstream demand – no mechanism that guarantees the recycled material produced at one end of the chain will be purchased and used at the other.
This is the fundamental challenge of automotive plastics circularity. The value chain is long and fragmented. Chemical producers, dismantlers, waste managers, component manufacturers, and vehicle makers have never had to align on the same challenge simultaneously. Each sits at a different point in the chain. Each has different incentives, and none can solve the problem independently.
The Phase 1 findings also identified specific technical barriers: the diversity of plastic types across vehicle models and ages makes consistent sorting difficult, contamination rates vary significantly depending on dismantling approach, and the economics of recovery deteriorate sharply without automation at scale.
These are not insurmountable barriers. But they require a coordinated response across the full value chain and not by incremental action from individual companies.
What changes in Phase 2?
Phase 2 of GIC’s Automotive Plastics Circularity project represents a structural shift. Where Phase 1 was a chemical industry pilot, Phase 2 brings automotive manufacturers into the collaboration for the first time. Jaguar Land Rover and Valeo, a global automotive manufacturer and a Tier 1 component supplier, are now working alongside chemical producers and other industry players, such as Siemens and Henkel, to address the commercial feasibility of the full value chain.
This matters for several reasons. Original equipment manufacturers (OEMs) and component manufacturers hold two critical levers that chemical producers do not: they determine the specifications for recycled plastic content in new vehicles, and they represent the committed downstream demand that makes investment in recovery infrastructure financeable.
Valeo’s participation is particularly significant. Positioned between chemical producers and vehicle manufacturers, Tier 1 suppliers like Valeo directly shape how plastics are designed and specified in high-performance automotive components. Those design decisions of the choice of polymer, the geometry of components, and the integration of different materials are what ultimately determines whether a plastic part can be economically recovered and reused at end of life.
Phase 2 focuses on multiple workstreams including: component-specific scenario modelling to establish the economics of recovery at a granular level, further work on automation to reduce the cost and complexity of dismantling, and design for circularity to understand how future component design can improve both technical and economic viability at scale.
Why collective action is the only path
The pre-competitive model that GIC uses is not simply a practical convenience. It is a structural necessity for challenges of this kind.
No company, however large, can create demand for recovered automotive plastics at scale alone. No OEM can restructure the dismantling and sorting infrastructure that would make recovery economical. No technology provider can redesign the value chain independently. These are systemic challenges that require systemic responses.
What GIC provides is the legal and structural framework that allows companies which would otherwise be competitors to work on shared problems without compromising their commercial independence. Members share the cost and risk of pre-commercial research. Findings are shared across the group and the results, validated technical data, commercially relevant proof points, and shared models, are available to all participants as the foundation for their own commercial decisions.
The Phase 1 report is the clearest demonstration of what this model produces. Eight companies, working together, have generated the first independently verified dataset on recovering plastics from end-of-life vehicles at scale. That dataset would have taken any single company years and significant capital to produce alone. Collectively, it was delivered in a fraction of that time.
The regulatory context
The EU ELV regulation sets binding targets: 15% recycled plastic content in new vehicles by approximately 2030, rising to 25% by 2036, with at least 20% of that from closed-loop vehicle recycling. Current levels sit at approximately 2.5%.
The gap between where the industry is and where regulation requires it to be is significant, and the timeline is shorter than it appears. Automotive product cycles mean that the vehicles being designed and engineered now will be on the road when those targets come into force. The decisions being made in Phase 2 of GIC’s project about component specifications, polymer type, and value chain economics will directly shape whether the industry can meet those targets.
There are parallel regulatory pressures from China, where a national action plan launched in December 2025 targets increased recycled material use in automotive manufacturing by 2030, and from markets across Asia where extended producer responsibility frameworks are tightening.
What comes next
Phase 2 is now underway and the workstreams are active. Chemical producers, a Tier 1 supplier, and automotive manufacturers are engaged. The question has shifted from whether automotive plastics circularity is technically possible to whether it can be made commercially viable at the scale the market requires.
The answer to that question will not come from any single organisation. It will come from the kind of structured, pre-commercial collaboration that GIC was built to enable. The Phase 1 report establishes the evidence base. Phase 2 is building the commercial case. The full value chain is, for the first time, working on it together.
That is not a small feat. It is, in fact, exactly what the circular economy transition requires.
About the Global Impact Coalition
The Global Impact Coalition is a CEO-led coalition of major chemical companies working pre-competitively to address the net-zero and circularity challenges that no single company can solve alone. GIC builds projects, pilots and partnerships that deliver measurable outcomes across feedstock replacement, circularity, lowering process emissions, and chemical safety.