Scrappage Policy In India – Signifying The Need Of The Policy In Recent Times
India, the 2nd largest global producer of steel and the 4th largest automobile market in the world is spreading its wings further to foray into another highly potential yet untapped metal industry. The recent announcement of the Union Budget 2019-’20 throws a clearer light on the new endeavor with its “mandatory scrappage policy” that intends to de-clutter the nation of its huge automobile and white goods waste through recycling.
The policy, primarily aimed at stimulating the automotive industry which has been in a slump for the past decade, seeks to remove outdated vehicles older than 15 years off-road, thereby boosting up production. As for the energy-efficient appliances, OEMs (original equipment manufacturers), etc. would require to redesign products to facilitate easy recycling. The government has proposed that such products like refrigerators, washing machines, air conditioners, ovens, stoves, cookers etc., should be designed with safer and reusable materials that are easier to recycle.
Salvaging The Scrap – Crying Need Of A Growing Economy
In response to the alarming pollution levels in the nation’s capital, the Supreme Court, in October 2018, banned plying of 10-year old diesel vehicles and 15-year old petrol vehicles in New Delhi. The order endorsed the 2015 ban by the National Green Tribunal in the National Capital Region (NCR).
The Central Pollution Control Board (CPCB), in association with the German development agency GIZ, and Chintan, an NGO, estimates that the number of obsolete vehicles, or End-of-Life-Vehicles (ELVs) which was 8.7 million in 2015 could apparently sky-rocket to 22 million in 2025, considering the average lifespan of a vehicle is 10-15 years.
The appalling question is of mass metal disposal in line with soaring production. While the scrappage policy intends to remove the carbon-spitting, dilapidated ELVs off the road clearing the environment and the traffic, the need to scrap them effectively remains to be addressed.
The current vehicle recycling sector in India is highly unorganized. The hazardous vehicles mostly end up in unauthorized scrap markets across the country. The workers do not have sufficient space or technology required for authorized recycling and use unrefined methods to dispose of the vehicles. And valuable parts like engine, battery, tyres, etc., which can amount to a profit of 30-70% are sold off (Study by Chintan, GIZ, 2012).
Moreover, there are no measures to supervise such markets or process the recovered scrap. With a shorter life span of white goods and increased production of upgraded versions thronging the markets, the battered products and ELVs will soon outgrow the existing scrapyards!
The Scope Of A Parallel Industry
In line with the Plastic Waste Management Rules of 2016, the new scrappage policy will ensure a predestined shelf-life for every white good where the company owners of fast-moving consumer durables need to comply with Extended Producer Responsibility or EPR, in the collection of plastic waste that they bring out into the market.
The consumer will be informed of the same at the time of purchase and the incentives that apply when the appliance is returned to the manufacturer after the expiry date. Such a measure would prevent the dumping of old metal and in turn provide for collective and effective recycling.
This organised recovery of metal junk could pave the way for a parallel industry in metal scraping. Considering the extensive market and immense growth potential, the industry will be rich fodder for fresh start-ups. New avenues can be opened in auto-shredding and recycling, giving birth to newer economic pockets which the country could leverage upon for wider global growth.
The World Steel Association predicts a 7% and above growth in steel demand in India. While the country owes most of its steel and other metals to ore extracts, the potential of cracking down its own reusable metal junk could revolutionize the economy and the infrastructure industry. The auto recycling industry in countries like the US and Canada churns out sufficient steel every year contributing to the production of nearly 13 million new vehicles.
Recycling is a far better option than manufacturing metal from extracted ore, not only on economic terms but ecological as well, since metal scrap recycling produces fewer emissions than ore-mining. To quote CPCB, “25% of the waste material coming from an ELV is hazardous to the environment, due to the presence of heavy metals, waste oils, coolants, ozone-depleting substances, etc.” A good deal of these materials can be reused through proper salvaging.
Challenges Of A Comprehensive Recycle System
With its share of perks to flaunt, the prospects of metal recycling hold up a few challenges as well. As the scrappage policy gives birth to new arenas of the automotive industry, the initial challenge is to balance environmental sustainability and space management. Unless there is a well-derived blueprint to begin with, to tackle the limitations of space, an efficient and functional processing system, and proper car-scrapping regulations, the sunshine industry could turn out to be a dead baby.
There has to be a standardized and compliant infrastructure to dismantle the vehicles, assort and collect the scrap, and proper policy implementation to carry out the process in a feasible manner. For example, in the case of white goods, there is a lack of centralized data unlike in the auto-sector where the RTO has specific records of all the vehicles brought in the country.
An upscale industry in metal scrapping could dethrone the unauthorized empires of scrap yards functioning currently in the city suburbs. More than 4,000 small scale units function at Mayapuri alone, Asia’s largest scrapyard, in West Delhi, where over 200 cars get scrapped every day and the annual turn over crosses INR 6,000 crore (as per The Economic Times). A full-fledged organized and automated sector could jeopardize thousands of livelihoods and face the wrath and demands of a formidable community of unqualified, small-time workers.
Making Money While the Metal Shines
With the implementation of the Scrappage Policy is to be effective from April 2020, India will have one of its substantial issues addressed. A workable system of auto-recycling will have a far and wide impact on the environmental and economic sustainability of the nation.
New start-ups will give way for fresh opportunities and investments. The recycle industry would declutter the nation’s metal junk and in turn, open doors for further and smarter environmental solutions.
The metal scrap industry is worth many billion dollars globally. The opportunities offered by this lucrative industry would surpass the ones created by the IT boom. Leveraging on its financial and business prospects could propel the nation’s economy and global reach in a far more competent manner than the IT sector.
A junkyard of scraps could soon be the goose that lays a million dollars!