India's Vehicle Scrappage Policy:

Where Are The Opportunities?

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I ndia's vehicle scrappage policy will

offer enormous scope to steel industry
players, medium small and micro
enterprises and entrepeneurs to set up
dismantling centres.

A vehicle's life spans 14-17 years with an

active life (used actively with original
parts) of 5-6 years, a passive period (used
by replacing spares): of 7-8 years and
finally the storage period (not used, kept
standing) of 2-3 years.

Speaking at a webinar on 'The Indian auto current dismantling infrastructure opportunities.

recycling industry: Current trends, has the capacity to cater to less
opportunities and challenges,' organised than 2% of ELVs. Value drivers: Dismantling centres will
recently as part of SteelMint Engage, offer value drivers for authorised
Yogesh Bedi, Chief, Steel Recycling Govt mulls recycling zones: The dismantlers. These include higher cross-
Business, Tata Steel, emphasising on the scrappage policy also includes sales, potential leads, incentives from
sustainability factor, said the vehicle plans to set up recycling zones OEMs, direct souring tie-ups and
scrappage policy "is completing the which are common facilities for precious metal recovery scope (catalytic
circular economy loop". promoting green industry that converters go to Belgium and Japan for
could include copper, aluminium, recovery of precious metals).
Where are the opportunities? battery, e-waste etc. The purpose is For customers, benefits include
a self-sustaining ecosystem where transparent pricing, road tax rebate of 15-
Growing number of ELV vehicles: the byproducts/wastes of one 25% and a registration fee waiver.
Around 90 lakh vehicles are ready for industry becomes the raw/input "Customers must be aware of the life-
cycle cost," Bedi insisted.

Scope for more scrap generation: A

unit would dismantle 1,000-1,500
vehicles per month and generate 1,000
tonnes of ferrous and 100 t of non-
ferrous scrap per month. Setting up a
centre would loosely entail an investment
of around INR 10 crore and about 5 acres
of land with potential for INR 4.5 crore
of direct revenue generation per month.

Outlook
Currently 9 million polluting vehicles are
dismantling in CY'21 and by CY'25, the material of another. to said to have met EOL and if we are to
end-of-life (ELV) stage would rise to 2.8 "In this carbon-conscious world remove these from roads, and assuming
million, said Bedi, adding that these where carbon emissions are a big at least 10% of the vehicles are replaced
centres undertake activities like de- no and climate change is of with electrical vehicles, (EVs) then
pollution and dismantling, bundling and concern, recycling is going to be recycling will lead to 4.5 billion kg of
logging shells, shredding steel scrap and important. Any opportunity related resources conserved, 3.6 billion kg of
ultimately the material is sourced by to recycling should be considered carbon dioxide reduction, and 10 billion
EAFs and IFs for melting scrap for steel- as going forward. Scrap is litres of fossil fuel conserved amongst
making. There is potential for INR 4.5 becoming an important future raw others.
crore of direct revenue generation per materal," Bedi emphasised.
month. "It is a sustainability initiative with far-
Revenue potential: Recycling reaching implications," Bedi said.
Delhi NCR opportunities: The northern creates INR 43,000 crore in direct
region is the biggest hub, comprising 40% revenue potential, INR 30,000 Where dismantling centres are
of the ELV market. Delhi NCR has the crore of forex savings (older and concerned, "Spare parts recovery and
highest vehicle population density at 5 polluting vehicles consume more vehicle refurbishment are to be value
lakh /sq km and over 20 lakh vehicles fuel which adds to the oil bill), 2 drivers in the short run while material
older than 15 years are in the capital mntpa of ferrous and non-ferrous recovery and strategic tie-ups with
which could offer scope for setting up scrap available, over 500 AVSF shredding units will be value drivers in
centres in the north in the near term. The and 100-plus testing centre the long run," Bedi concluded.

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