India’s vehicle scrappage policy to target heavy commercial vehicles first

by Amit Panday , 31 Aug 2016


The government of India plans to target heavy commercial vehicles (HCVs) as the first category of polluting vehicles to be taken off the road under its upcoming vehicle scrappage policy guidelines.

On the sidelines of the ongoing 56th SIAM annual convention today, Abhay Damle, joint secretary, Ministry of Road Transport and Highways (MoRTH), said: “The new vehicle scrappage policy will target heavy commercial vehicles first as they cause 65-70 percent of the (vehicular) pollution.”

Earlier during the day, Nitin Gadkari, union minister, MoRTH, via his video message to the industry stakeholders, said: “While pollution is one of the biggest concerns, the industry has been very supportive of our efforts to address this issue. We are attempting to implement a scrapping policy for old vehicles, which will help reduce pollution.”

Speaking in the same context yesterday at ACMA’s annual convention, the Union minister had said, “The government is actively working on the vehicle scrappage scheme. A new end-of-life vehicle policy is in the draft stage and has been presented to the finance minister, Arun Jaitley. The policy proposes scrappage of 10-year-old diesel cars and 15-year-old petrol cars.”

He had also added yesterday that there will be various incentives offered in stages by state governments and such a policy will lead to a 22 percent growth in the Indian auto industry’s manufacturing operations. “A scrappage policy will benefit both the country and the people through employment generation. For India, which currently imports scrap metal, the metal obtained through the vehicle scrappage scheme will help reduce foreign exchange outflow,” he had said yesterday.

It can be recalled that the government had told the Supreme Court in July 2016 that a new policy to combat pollution including the scrapping of old diesel vehicles and a scheme to replace about 28 million automobiles registered before March 31, 2005, by BS IV-compliant ones by April 2017, is underway and will be implemented soon.

Scrappage eco-system being developed 

Actively tracking developments in this space, Autocar Professional had earlier reported that the vehicle scrappage policy is not just about the incentives in exchange for old four- and two-wheelers. It is understood that the scrappage policy can be implemented only after setting up an eco-system wherein polluting and old vehicles can be duly collected and transferred to authorised dismantling facilities. These facilities would then safely and environment-friendly dispose the old scrap, recovering the reusable metals and materials that can go back into the production-cycle, thereby relieving India of unnecessary imports.

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In a recent interview to Autocar Professional, Rashmi Urdhwareshe, director, Automotive Research Association of India (ARAI), a government-backed research body dedicated to India’s auto industry, had commented: “It looks very difficult to have a policy with mandatory retirement of vehicles. However, on a voluntary basis, vehicle retirement policy can be introduced by incentivising the scrappage of old vehicles. Scrapping a vehicle involves not only shredding of parts but also setting up a mechanism that can, in an environmental-friendly manner, dispose off the scrap. That includes segregation of metals, non-metals, rubber, and other materials. Each one of these materials undergoes predefined recycle method.”

“There are regulations built in for making new vehicles, which also have a defined methodology for scrapping the same. Existing regulations in Europe say that when a new vehicle is manufactured, it should be able to be scrapped by recovering 85 percent of its weight. We have made our regulations on similar lines and that standard already exists. This means that at the time of new vehicle approval, the manufacturer will have to declare the component materials. The instructions are also mentioned for dismantling the vehicle duly approved by the testing agency,” she had clarified.

Experts suggest that the vehicle scrappage policy will most likely see phase-wise or regional implementation before it could cover the entire country.

Pilot test in Chennai 

Meanwhile, India’s first vehicle dismantling unit has been pilot-tested in Chennai, and the authorities say that the results, which are encouraging, are being evaluated in terms of mass application of the standard procedures. Global Automotive Research Centre (GARC), which is located in the SIPCOT industrial growth centre at Oragadam near Chennai (within close vicinity to several automotive production plants), has set up a vehicle dismantling facility – a first in India.

According to GARC officials, although the unit was set up to overlook the vehicle dismantling procedures in an environmentally-friendly way as part of a pilot project, it will take note of and address the potential challenges that come in the way of executing the standard processes and also evaluate its commercial viability to take on mass dismantling of old vehicles.

Officials aware of the government plans say that the scheme could start off by being implemented as a pilot project in a state or region. The experts also mull that the required infrastructure could be offered for public-private partnership (PPP-model).

Green signal for auto-shredding plant JV

On August 8, the Minister of Steel Chaudhary Birender Singh and the Secretary Steel, Government of India, Aruna Sharma had given a green signal to a joint venture to set up the first auto-shredding plant in India. For this, a JV pact was signed between MSTC Ltd and Mahindra Intertrade.
The shredding plant will be first of its own kind in India and will reduce the dependence on present annual import of shredded scrap of 5-6 million tonnes and consequently reduce foreign exchange outgo. It will also help in domestic sourcing of raw material for secondary steel sector.  The plant will have a capacity of 100,000 tonnes per annum.