Carmakers face an annual bill of £300m in the UK for scrapping worn-out old cars and light-medium commercial vehicles returned by owners, according to the Society of Motor Manufacturers and Traders.

The estimate was made by David Hulse, manager of the organisation's Automotive Consortium on Recycling and Disposal (ACORD) who says its unlikely manufacturers would be able to absorb the extra costs “because of the current low level of profitability” and so were likely to pass them on to car users.

Two years of negotiation by the EU has led it to now insist that as part of the 'end of vehicle life' directive all manufacturers pay all or most of the cost of disposing of vehicles “in an environmentally friendly way”.

The directive applies to vehicles put on the market from January 1, 2001, and from January 1, 2007, for other cars and light/medium vehicles.

The EU is putting pressure on manufacturers to design cars which can be recycled more easily. Lead, mercury, cadmium and hexavalent chromium will be banned from new cars sold in the EU from January 1, 2003. The only exception will be the use of lead as an alloying element.