Indian aluminium demand is growing rapidly due to increased population, urbanisation and industrialisation. It is important for high-value demand segments like infrastructure - Power, Transportation, Railways, Aerospace, Building and construction, Renewable Energy and Consumer Durables to remain a net zero economy by 2050.
India’s growing appetite for the aluminium industry is largely accounted for by the demand for the aluminium recycling industry in India, which has zoomed at a CAGR of 9-11 per cent from fiscal 2015 and 2023, while primary aluminium demand registered a CAGR of 1-2 per cent only. India’s automobile, power, railways, packaging, consumer durables and construction sectors are the key demand drivers for the recycling aluminium industry.
Looking at environmental concerns, domestic primary aluminium manufacturers have the highest carbon intensity among global producers, with emissions of 14 tonnes of CO2 equivalent per tonne of aluminium. At the same time, the recycled aluminium industry emits only 0.3MT CO2 per tonne of recycled aluminium products.
India’s lower carbon-intensive aluminium recycled products demand is increasing day by day with newer applications. The growing appetite for environmentally friendly products due to their higher scrap usage is another lever for decarbonisation.
The aluminium recycling industry is facing significant challenges in domestic scrap collection due to the lowest per capita consumption in India in the past. As aluminium has a long life cycle, there is always a long gap between a recycled product entering into services and its end of life. Given India’s fast-paced growth, under the leadership of Prime Minister Narendra Modi, India is consuming much more materials than is available from End-of-Life products. Hence, the recycling industry relies on imports of Metal Scrap to meet the shortfall to ensure sustainable business.
“We strongly urge the government must provide a level playing field for both the primary and secondary sectors as we believe both are vital contributors to the national economy. For example, suppose customs duties are applicable on the import of scrap. In that case, commensurate export duties on the basis of the total cost to the country on primary products should also be levied. Further, the Standards on Scrap material should be formed after consultation with the recycling aluminium industry, and to support recycling, it should be industry-friendly and not restrictive in nature, else it will have a negative impact on the aluminium recycling industry, which support minimise the carbon emission,” as Sanjay Mehta, President, MRAI, urged the Government.
Overall, we request government policymakers make zero per cent duty on metal scrap till India becomes the Atmanirbhar on the availability of sufficient quantity and quality of scrap, added by Sanjay Mehta.
While highlighting the benefits of the secondary aluminium industry, Mohan Agarwal, MD, CMR Green Technologies Ltd., mentioned that “The usage of recycled aluminium, due to its monumental benefits of being environment friendly, being high quality, generating large employment and being cheaper is growing a very faster pace. While recycling generates no liquid or solid effluents and has a CO2 imprint of only 0.3 mt per tonne, every 1 mt of primary aluminium generates 14 mt of CO2 emission and 8 mt of hazardous landfill. Therefore, as a service to future generations, we must promote recycled aluminium over primary aluminium, as added further by Agarwal.
Highlighting the role of recycling in the Indian Economy, Dhawal Shah, Partner, Metco Ventures LLP, emphasised that “India’s secondary aluminium metal manufacturing sector is playing a larger role in the circular economy, sustainability and low-carbon economy to minimise the CO2 emission. Despite this, Primary aluminium producers often suggest imposing higher import duty on aluminium scrap and also demand scrap with unfriendly BIS specifications and insufficient collection systems, which can hinder the market growth,” added Dhawal Shah.
However, many countries like the EU, UAE & South Africa have recognised that scrap is a critical raw material and have legislated to prevent its exports, making it virtually impossible for us to import scrap. This is going to become more challenging ever after the execution of the EU Waste Management Rule, which will be effective from 1st Jan 2025 for non-OECD countries.
More importantly, India needs to have a strategy for enhancing scrap imports as the world is shutting exports and domestic sourcing is limited. However, the present policy regime is highly skewed in favour of primary producers, and every day, the primary sector is erecting new barriers to the recycling aluminium business – such as aggressively advocating tariff and non-tariff barriers on secondary producers, introducing unreasonable and un-implementable standards for raw materials etc.
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