Scrapping policy to boost metal recycling in India

Ready with a new scrapping policy that will provide incentives for surrendering old polluting vehicles, Union Minister Nitin Gadkari today said it will boost the automobile industry turnover over four-times to INR 20 lakh crore in the next five years. More so, the policy will also sow the seeds for a much-awaited, structured metal recycling industry in India, which will hopefully improve the metal recycling rate in this fast emerging economy.

The draft of the much-awaited policy is ready and would be put in public domain within a week to seek views of the stakeholders and general public, the Road Transport and Highways Minister said.

"We will put the vehicle scrapping policy on website within a week to seek suggestions and based on that we will seek Finance Ministry's approval. Once approved, it will be sent for the Cabinet nod," Gadkari told PTI in an interview.

India’s metal recycling rate is just about 25 per cent. Given the fact that India’s per capita consumption of aluminium is still one of the lowest at 2.2 kg against a world average of ~8kg, with 22-25 kg in developed nations, it is not yet that disheartening a scenario; but what has always been an issue of concern till now is the complete lack of a structure for metal/aluminium scrap handling and secondary metal recovery.

Giving further thrust to emission control measures, the draft norms for the 'end of life' policy are likely to provide about 50 per cent rebate in excise duty on new vehicles for buyers who surrender their polluting old ones.

"We will set up industrial clusters near ports that will manufacture automobile parts at half the market rate. The labour cost in India is less. Car parts like copper, steel, plastic and aluminium would be available in plenty from old vehicles, which would be recycled at these clusters," he said.

The government last month said it is planning 29 port-based coastal industrial centres under coastal economic zones which will boost exports by USD 110 billion besides creating one crore new jobs. The clusters are planned in the vicinity of India's top 12 major ports.

The government is also considering giving financial incentives of up to INR 1.5 lakh on surrender of over-ten-year-old vehicles to check pollution and address road safety concerns, Gadkari had earlier said. The proposed policy will follow the government's earlier announcement to implement stricter emission norms for vehicles from April 2020 despite the auto industry calling it an "extremely challenging" task.

India plans to leapfrog to stricter emission standards of Bharat Stage-VI fuel specifications, skipping BS-V norms altogether, from April 1, 2020. Under the proposed scrapping policy, people would get an incentive of up to INR 30,000 for discarding small vehicles like cars, while total benefits after taking into account the tax exemptions could be up to INR 1.5 lakh for big vehicles like trucks, the minister had said earlier.

The new policy is likely to be valid for over-ten-year-old vehicles across the country.

The plan is to set up 8-10 industrial units near ports like Kandla which will give certificates for accepting old vehicles and also recycle metal scrap generated from vehicles from India and abroad, thus giving a boost to employment and economy.