Wanted: A unified, comprehensive vehicle scrappage policy

Such a policy will not only provide vehicle owners a seamless hassle-free experience, but also generate employment and give the metal recycling industry, a much needed shot in the arm

By Swagata Dey
Published: Wednesday 30 October 2019
Wrecked car junkyard. Photo: Getty Images

Currently, there are about nine million vehicles plying on Indian roads that are more than 15 years old and often emit 10 times more than the current norms according to a Central Pollution Control Board study.

This number is expected to reach 20 million by 2025. Once the scrappage policy gets implemented, it is likely that more purchases and switchover will happen to cleaner BS VI emission norms coming into force from April 2020.

This may also benefit the slowdown in automobile sales in India. While work is on towards preparing a voluntary policy for the past four years, the Union Ministry of Road Transport and Highways (MoRTH) has recently released the Draft Guidelines for Setting up, Authorisation and Operation of Authorised Vehicle Scrapping Facility (AVSF).

The guidelines apply to vehicle owners, automobile collection centres, existing automobile scrapping and recycling facilities and recyclers of all types of automotive waste products. The guidelines provide granular details on the land requirements, criteria for scrapping of vehicles, scrapping procedures, required audits, certificates and finances.

The guidelines for AVSF, though a step in the right direction, are very narrow in their scope. They barely touch upon the gamut of issues that encompass recycling of end-of-life vehicles (ELVs).

While there is a brief mention of a requirement of an environment management plan within the unit, the exact metrics for evaluation remains elusive. Currently, there is just one organised vehicle scrappage facility in India in Greater Noida. However, there are numerous smaller and informal units that cater to a major chunk of vehicles.

According to the guidelines, 9,000 square feet of commercial space is a mandatory requirement, which will render these smaller units redundant or will force them to reorganise. The guidelines should include a process to convert the existing smaller units to authorised facilities, in order to salvage the countless jobs that these units provide.

Further, fiscal incentives are required to encourage opening of more units. That will be able to cater to the demand of a large number of ELVs in the coming years.

Vehicle recycling is a largely unorganised industry in India, and the new emission norms would lead to over 20 million vehicles becoming obsolete by 2025.

In such a situation, a unified, comprehensive scrappage policy with standard operating procedures will not only provide vehicle owners a seamless hassle-free experience, but also generate employment and give the metal recycling industry, a much needed shot in the arm.

The new policy, must establish the concept of extended producer responsibility to mandate all automobile manufacturers to establish recycling and scrappage facilities of their own. This will also enable use of recycled metals in auto manufacturing, bringing down raw material costs.

Finally, these guidelines are for establishing vehicle scrapping units only. However, currently, there are neither any fiscal incentives nor stringent regulatory requirements which would force vehicle owners to dispose off old vehicles.

Currently, this process is only voluntary and hence may prove to be ineffective. For effective implementation of such a policy, tax incentives could be provided to owners for discarding vehicles that have crossed the 15-year mark.

Further, the government can allow for exemption of additional fees such as road tax and registration fees, for all new vehicles purchased against a “certificate of vehicle scrapping” as discussed in these guidelines.

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