GLOBSEC Issue Brief - A Wider Perspective on Slovakia's Automotive Circularity
Slovakia’s economic dependence on industrial production and old and ageing passenger vehicle stock, traits common across the Central and Eastern Europe (CEE) region, make the decarbonization of the industrial and transport sectors especially challenging on the path to 2050 carbon neutrality. As a major steel producer, automotive manufacturing powerhouse, and second-hand vehicle graveyard, the medium and long-term climate solutions should incorporate a holistic, cross-sectoral approach to circularity that contributes directly and indirectly to emissions reductions in these sectors.
The old and ageing vehicle stock in Slovakia is a phenomenon felt across the wider CEE region as a result of ‘diesel leakage’, whereby tightening environmental standards in Western Europe continue pushing older petrol and diesel vehicles into Eastern European second-hand markets at cheaper prices. This further dampens already weak new vehicles sales that emit much less even if they are not electric. As long as this stream of affordable polluting vehicles continues uninterrupted, it will be nearly impossible for these countries to tackle transport emissions. The longer-term integrated solution is a modal shift away from the personal vehicle model, but in the meantime, a two-pronged strategy should be discussed by CEE authorities to (i) stem the flow of second-hand cars through environmental-aligned vehicle tax reform and (ii) incentivize the removal and recycling of near waste vehicles that will otherwise continue polluting the roads for several more years.
This report begins by examining Slovakia’s automotive circularity potential with a case study on the recycling of the two largest shares of vehicle materials in older (12 years) vehicles - metal and rubber - which account for close to 75% of the composition. This assesses the potential of ferrous scrap metal as input for low carbon steelmaking and end-of-life tyres which have several well-established commercial-industrial applications. The circularity of plastics, the second largest and rising material in newer vehicles, is a complex topic in its own right, beyond the scope of this report.
The next section provides an EU context for Green Deal measures under review that aim to raise the standards and benchmarks for recycling of these materials, followed by an overview of EU scrappage schemes in response to the 2008 and 2020 economic crises before closing with the outlook and opportunities for Slovakia.