Vehicle Scrappage Policy To Boost Auto Sales, Generate Employment, Enhance Road Safety: Experts

Mobility Outlook Bureau
19 Aug 2021
06:26 PM
3 Min Read

A webinar organised by SIAM saw deliberations on the various aspects of the scrappage policy to devise the roadmap of transitioning to a circular economy.


The recently announced vehicle scrapping policy is likely to be a game-changer for the auto sector as it will boost automobile sales, generate employment and enhance road safety, industry experts participating in a webinar hosted by the Society of Indian Automobile Manufacturers (SIAM) said. 

In addition, scrappage of vehicles has the potential to reduce raw material exports to near zero, which in turn helps reduce production costs. 

The webinar saw discussions on the policy framework, best practices in material recycling, extended producers responsibility and models related to environmentally sound management of ELV recycling, including the roles and responsibilities of stakeholders to devise the roadmap of transitioning to a circular economy.

The policy will greatly improve road & vehicle safety, environment, fuel efficiency and boost auto sector sales by 30%, said Amit Varadan, Joint Secretary, Ministry of Road Transport & Highways (MoRTH), one of the key architects of the policy and the chief guest at the lecture. He further stated that the policy has the potential to generate 35,000 jobs, while saving maintenance cost for customers and manufacturing cost for OEMs.

While outlining the salient features of the Registered Vehicle Scrapping Facility, (Scrappage Policy) 2021, Paresh Goel, Director, MoRTH likened the policy with a health policy for all vehicles. He shared the rules for automated test centres, which included owner eligibility, approval procedures, infrastructure and staffing requirements, test procedure and audit process, and so on. 

He stated that citizens can test their vehicles from anywhere in the country, and the government will soon set up an electronic portal for citizens to reserve suitability tests for their vehicles.

End of life vehicles (ELV)

Shrikant Deshmukh, Chairman, SIAM Recycling & Materials Group and GM, Mercedes-Benz India gave a comparative perspective of EU end-of-life vehicle (ELV) recycling directives and highlighted the Japanese end-of-life vehicle recycling model. Working with ELV’s enormous opportunity in India, he advocated the extended producer responsibility model and stressed the importance of shared responsibility among all stakeholders, including the government.

The scrapping policy has potential to increase the material yield from ELVs, resulting in resource conversation and reduced landfills. With limited battery recycling facilities and the increase in the sales of EVs there would be enormous battery wastage, said MS Anand Kumar, Co-Chairman, SIAM Recycling & Material Group and GM, TVS Motor Co. The recently announced policy will create online and offline market for recycling and sale of certified use of parts.

Giving further perspectives on ELV, Masaru Akaishi, MD, Maruti Suzuki Toyotsu India explained the proper dismantling and recycling process and the challenges involved in producing, collecting, dismantling and selling end-of-life vehicles. He pointed out that regulations should lead all players to follow the correct systems. He emphasised the role of incentives and disincentives in encouraging ELV users to dispose-off the old car and take it to an approved dismantling facility. Domestic steel scrap production will replace imported scrap and saves resources, he added.

Circular economy 

Prashant K Banerjee, Executive Director, SIAM called the vehicle scrappage policy a robust policy. “We are pleased that the implementation of the scrappage policy will foster a circular economy and help achieve energy security, road safety, better environment, and facilitate secondary material usage in the system,” he said.

Adding her bit on the circular economy, Meenakshi Sundaram, CTO, Amalgamations Component Group said the adoption of circular economy by recycling and re-using of automotive parts will lead to the creation of an estimated $ 8-10 billion economy.

Meanwhile, Som Kapoor, Partner (Automotive Sector), Ernst & Young said the replacement of old commercial vehicles will result in reduced fuel bills and will help in reducing pollution.

Among other speakers, Anand Kumar, Additional Director, Central Pollution Control Board (CPCB), shared with the industry various responsibilities of producers under Battery (M&H) Rules, 2001, as amended in 2010. He discussed the applicable EPR framework under the plastic waste management rules and e-Waste (Management) Rules 2016 and shared the collection targets therein.

Sanjay Mehta, President, Material Recycling Association of India (MRAI) said, “We require informal sector’s help on day-to-day basis as they have got better sources to procure the material. We need to give them support in terms of equipment, facilities and incentives and the government has to support in this matter.”

In the panel discussion, the co-existence of the informal and the formal sector was highlighted and it was reported that there are many opportunities for private players to make India's scrap industry work in an organised, transparent and environmentally friendly manner. 

The webinar officially ended with thoughtful ideas and strategies for achieving economic, circular, sustainable mobility and sustainable development goals for 2030.

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