The End of Life Vehicle directive, announced during the summer, will initially require carmakers to pay "all or a significant part" of the cost of recycling/scrapping cars registered after March 1, 2002.
A SMMT spokesman welcomed the move. "Seventy five per cent of a car's weight is made of recyclable material; by 2015 this will rise to 95%," he said.
But the directive also contains a retrospective clause which, from 2007, will make carmakers responsible for the scrapping and recycling of all vehicles.
The spokesman said: "We have been lobbying the Government hard on the retrospective angle. The cost of recycling all these vehicles will be huge, especially in the UK which has a strong manufacturing base."
The UK Government estimates the cost to carmakers to be around £300m a year.
##Macgowan(1)--left##The SMMT also claims the directive raises other issues, such as who takes responsibility for vehicles if the manufacturer is no longer in business and what happens to vehicles in countries that do not have a manufacturing base. Chris Macgowan, SMMT chief executive (left), described the regulation as "flawed" and urged Government ministers to show support for the motor industry.
The European Parliament is expected to approve the ELV directive this month - governments are likely to be given 18 months to implement the regulations into domestic law.
The Motor Vehicle Dismantlers' Association believes ELV provides an opportunity for the aftermarket to source cheaper, recycled parts for accident repair - a lower priced alternative that will combat the growth in pattern parts.
Ford has already taken steps in the US to benefit from vehicle dismantling after opening a recycling site in Tampa. It intends to sell the parts to bodyshops, insurers and direct to the public in a venture described by president Jac Nasser as "potentially a billion dollar business".