India’s scrappage scheme and vehicle recycling

India’s scrappage scheme and vehicle recycling

The long-awaited draft policy on scrapping vehicles is finally out, and it outlines the criteria of end-of-life vehicles and the procedure to scrap them. India is the 2nd largest steel producer, and it has the 4th largest automobile industry in the world. The recent policy announcement clarifies that the government aims to clear out the nation of its enormous automobile and white sound waste through recycling.

It is also apparent that India is making an effort to reduce air pollution and protect the environment. The center has announced the scrappage policy in the union budget of 2021. The end-of-life vehicles are not only a threat to the environment but are also in constant jeopardy on the road. In this regard, the policy was much needed and highly anticipated.

The policy majorly focuses on removing vehicles that are more than 15 years old from the road to boost the automobile industry, which has seen a downswing in the past decade. The government also proposed that white goods like refrigerators, air-conditioners, washing machines, etc., should be redesigned to make them more recyclable.

Vehicle Recycling Sector In India

The vehicle scrapping market of India belongs to the unorganized sector where the unfit vehicles are scrapped and sold for parts in an unsafe way. At present, there are no proper regulations to keep track of these markets and take into account the amount of recovered scrap. Thus, the need of the hour is the new policy that can turn scrap generation into an organized, sustainable, and environmentally friendly industry. This policy will also provide multiple incentives to the vehicle owners who will get a scrap certificate for their ELV’s(end-of-life vehicles).

India, one of the largest steel producers globally, carries an unrealized potential in auto recycling. It can generate tremendous employment opportunities and give the much-needed push to the automobile industry. If we talk about data, then it is estimated that the 25% of cars that will be scrapped initially will generate around 2.9 billion dollars. And the graph is expected to go up with time. Customarily, a car weights 1,400-1,700 kgs. When recycled, it produces around 65% steel scrap, 8-9% scrap of aluminum, and approximately 15% rubber and plastic scrap. If accounted for, each recycled car generates around USD 350-450.

Auto shredding in India

Auto -shredding is a process where automobiles and household appliances are placed in a hammer mill which turns the material into fist-sized pieces. The shredding of automobiles results in a mixture of various ferrous, non-ferrous, and shredder waste. MSTC Limited, the government of India, and Mahindra Intertrade limited, in a recent joint venture, have set up India’s first auto shredding plant. This venture will help India achieve its annual ferrous scrap requirement, which is approximately 6 million tonnes, most imported. If this project turns out to be a pan-India project, it can replace imported scrap and reduce foreign exchange outflows.

Challenges In Setting Up a Thorough Recycling Industry

The ideas, as mentioned earlier, of setting up a recycling industry way seem grand, but they hold up a lot of challenges. As the scrappage policy carves the path for new opportunities in the automobile industry, the first challenge faced by it would be to balance sustainability of the environment and space. The industry needs to be driven with a well-designed blueprint for a standardized and compliant structure to dismantle the vehicles. Another major challenge faced by the government would be to compensate for the loss of jobs of small scrapping shop owners.

The bottom line

One of the significant benefits of the new scraping policy would be that it will set up many start-ups, thus creating a smooth pavement for new opportunities and investment—Greenpeace and the visual report state that India has 22 of the most polluted 30 cities globally. The new scrappage policy will be the latest measure in the direction of less CO2 emissions, thus resulting in cleaner air and greener cities.

Additionally, this policy will assist India in filling the gap between the scrap demand and supply chain in the future. Since steel can be used and recycled endlessly, it can be used to create more scrap-based steel production and reduce India’s dependence on imports. If successfully implemented, by the year 2030, we are expected to become self-sufficient and become one of the major leaders of the scrapping industry.