A scrap policy would lead to safe disposal of vehicles at their end of life, reduced metal landfills, regulated prices and standardised practices
The Indian Voluntary Vehicle-Fleet Modernisation Programme is estimated to boost 30 per cent sales for the automotive industry, attract Rs10,000 crore investment and 35,000 jobs just with setting-up of car fitness centres. It will simultaneously reduce 58 per cent C02 emissions by replacing virgin steel with scrap steel to manufacture vehicles.
Large-scale vehicle scrapping schemes were launched post the economic slowdown to support the automobile industry. The Indian Voluntary Vehicle-Fleet Modernisation Programme, launched in August 2021, is two-fold: (i) to strengthen the automobile industry as it transitions to drive sustainable manufacturing and (ii) to ensure environmental benefits. Also, the policy will aid India to accelerate its post COVID-19 green recovery by expediting sales, meet air quality ambitions by reducing vehicular pollution, increasing fuel efficiency and improving road safety.
The government has integrated climate action within the policy by prioritising fuel efficiency and vehicle condition. The policy suggests an upper limit of 15 years for commercial cars and 20 years for private cars. The government has mandated testing and inspection and provides incentives for end-of-life recycling to new car purchasers. By defining the condition of a vehicle's registration renewal, the government clarifies that the fitness of the car is prioritised throughout its life span on the road.
With the vehicle scrapping policy India has a plethora of opportunities to build on. Regulating the once informal auto ancillary and scrappage sector would now lead to safe disposal of vehicles at their end of life, reduced metal landfills, regulated prices, and standardized practices.
The policy fosters the development of new industries, such as vehicle testing facilities, vehicle fitness centres, scrap segregation and shredding centres, creating an opportunity to advance an equitable green workforce.
Vehicle scrap not only reduces the cost of a vehicle by providing copper, aluminium, steel, plastic and rubber to the automotive industry but also gives access to raw materials for electronics, steel and waste-to energy sector. With systematic implementation of the government's plans, the nation will recover rare metals and witness reduced pressure for importing scrapped steel. Currently, India imports six million tonnes of scrap steel due to a gap in domestic demand and supply. The practice of using recycled scrap metal would have a much lesser carbon footprint.
With neighbouring countries currently lacking a scrapping ecosystem, India has the potential to become the scrap-recycling hub of South-East Asia. With access to a massive coastline and well-established scrapping ecosystems in Gujarat, India can leverage the economies of scale by importing vehicles from other countries for scrapping.
Meanwhile, India can prepare to strengthen the ecosystem. The Ministry of Road Transport and Highways estimates that approximately 51 lakh light motor vehicles are more than 20 years old and, 34 lakhs are over 15 years old. Around 17 lakh medium and heavy commercial vehicles are older than 15 years without valid fitness certificates. For a systematic execution and implementation of the scrappage policy, the first step to sensitise India's industry about the scope and profitability of the scrappage industry.
The scrapping industry would be a new business avenue for many and this can be seen as an opportunity to generate gender-neutral green jobs in auto ancillaries, automotive, and recycling sectors.
As India targets to increase electric vehicle sales, Authorized Vehicle Scrapping Facilities (AVSF) would require to be future-ready to handle the new energy vehicles like EVs or Li-Ion batteries. Recycling batteries under the scrappage policy will help bring down the cost of the electric vehicle and help India develop Lithium-Ion batteries locally. Both industries will reap benefits and future design and material of the vehicles and their parts can be recycled at their ELV stage with minimum wastage. Also, creating higher incentive models for scrappage and replacement rather than only scrappage will encourage EVs or BS6 compliant vehicles.
The top-down approach of the policy announcement and district level targets set for testing and scrapping centres has unlocked many opportunities for the nation. However, a fruitful implementation is only possible if states are encouraged to be early adopters by facilitating the development of industrial infrastructure and build readiness towards the ecosystem by building capacity, encouraging investment and creating synergy within businesses.
(Nath is a Researcher and Adhia is Country Director (India), at Institute for Sustainable Communities. The views expressed are personal.)
