Vehicle Scrappage Policy Intends To Introduce Skill Based, Competitive And People-Centric Comprehensive  Ecosystem for Auto Scrapping Sector- General VK Singh

The Vehicle Scrappage Policy 2021 enhances  a very people-centric circulatory  process for responsible and scientific scraping of unfit cars to the benefit of every stakeholder involved creating a competent and competitive revenue centric ecosystem

Vehicle Scrappage Policy Intends To Introduce Skill Based,Competitive And People Centric Comprehensive Ecosystem for Auto Scrapping Sector- General VK Singh

The Policy Times in association with the Material Recycling Association of India (MRAI) & MONO STEEL organized National Conference on Roadmap for India’s Sustainable Mobility in light of India’s introduction of the recent Vehicle Scrappage Policy 2021 from 4 pm-8.30 pm (IST) on Friday, 24th September 2021 through ZOOM.

The Conference intended to engage stakeholders from various levels from policymakers, auto manufacturers, OEMs to corporate leaders for further clarification and deliberation on the implementation of the vision presented by the Vehicle Scrappage Policy. 500+ different stakeholders including industry representatives from different sectors were present for the occasion. General (Dr) Vijay Kumar Singh, Honourable Minister of State for Road Transport and Highways & Civil Aviation was present as Chief Guest.

Link To The Online Conference

The Hon’ble Minister delivering his inaugural address put forward the vision the policy is desired to achieve in coming times. It is a well-known factor that nearly every developed economy has a scrapping policy in place and it was long due in India. Currently, India has a very low capacity for recycling and utilization of scrapped automobiles which is intended to increase to at least 95% through this policy. This will firstly address one of the most critical issues of raw materials necessary for auto manufacturing. For example, at present, we are importing almost 7 Metric Tons of scrap steel at the cost of approximately 23000 crores, in this context if we have a system of scientific scrapping of old vehicles we will significantly remove the burden of import for steel and other precious metals and components. Moreover, the scrapping industry at present is mostly informal hindering the absorption of higher technology and increasing the capacity of scrapping. This policy addresses the issue of skill development among the recycling and scrapping stakeholders to encourage better higher technology and scientific method of scrapping eliminating the risk of unwanted risks all the while transforming the sector to a systematic and formal zone opening better employment revenue, scientific process and higher technology painting a better situation.

Another very important aspect of this policy is its simplistic nature making it very easy for compliance and physical implementation. For example in the case of the establishment of testing centers an individual would not need to circle multiple different factors like permission and others and waste unnecessary time. It simplifies the process for every stakeholder saving cost, effort, and money and better accountability, compliance. All the while eliminating the pitfall like corruption, manual manipulation as it is a very decentralized and database system. It is a mutually beneficial process incentivizing voluntary scrapping and disincentivizing the maintenance of fairly old environmentally unviable cars. It is statistically proven that with the policy in place car owners of every type will benefit from new and technologically sound cars.

The environmental concerns behind scrapping centers also have been addressed with proper rules and regulations to counter any unwanted situations. Lastly, a whole new market system is being created to make auto scrapping viable and profitable for beneficiaries. An e-Commerce platform for auto parts and a market for end-of-life vehicles are currently in the deliberation process to build the ecosystem with a revenue centric lucrative process. Currently more and more players of different levels are invited to form a healthy and competitive ecosystem to mutual benefit and formalize the auto scraping industry in the coming time.

Dr. P Sekhar, Chairman Unleashing India, Global Smart City Panel, MTGF said in his opening remarks – Undoubtedly  India is a growing economy however growth comes with two sides of consequences one is abundance another is a shortage. On one hand, we do have abundant luxury from transport to other things that on other hand created a shortage of raw materials and other resources and caused severe strain on our economy and environment. Vehicle Scrappage Policy 2021 has brought a lot of prospects however for that to come to light we need to reexamine the Indian version of the scrapping mindset means ‘burn it down.’ That sentiment will only bring harm to two important aspects like economy and environment which will impact us in the end. The Policy takes the reduce-reuse-recycle mantra at the core of its function influencing a healthy system. We can easily retract useful elements from unfit cars to reduce abundant usage of raw materials and reusing and recycling them to bring a healthy cyclic economy.

Mr. Sanjay Mehta, President, Material Recycling Association of India(MRAI) which is one of India’s apex statutory bodies with a significant mark in influencing India’s journey to responsible recycling. The world is moving towards a circular and environmentally viable economy today and in this context transport is a crucial pillar of the modern world the Vehicle Scrappage Policy 2021 has opened up a horizon of possibilities. Although auto manufacturers of the modern age are much more environmentally conscious compared to old times, for example, the emission of one old car is similar to 11 new cars. Given the number of old and unfit cars that is approximately 1 crore the policy if implemented has the potential to cut down GHG emissions by almost 25%. Apart from that the policy also has the potential to establish an organized setup and collection channels of unfit cars to transparent and responsible recycling system thus formalizing the current mostly informal recycling sector. The whole process is decentralized to a state and centrally connected system leaving visible track and audit for better function. This will not only open opportunities for employment at the local level but the source of revenue to every stakeholder making it a comprehensive approach suited to introduce a lucrative circular economy.

Shri Paresh Kumar Goel, Director (Transport& IC), Ministry of Road Transport & Highways dissected the current rules and provisions for the policy to a better comprehension of the different stakeholders present in the webinar from manufacturer recyclers to the testing centers. This is a very minutely laid out incentivized and disincentivized systematic process for sustainable disposal of unfit cars. This is certainly not an age-based criterion but fitness-based criteria with a possibility to tackle two major issues of modern road transport safety and pollution. Vehicle Scrappage Policy put a solid incentivized choice for end consumers to voluntarily scrape their unfit vehicle against a rebate in re-registration, road tax, and new vehicle purchase upon the procurement of valid certificates from registered testing centers. Originally there was data of a lot of vehicles in the National Vahan Database however the majority of them were without a valid test certificate to attest their fitness. This policy will definitely aid the establishment of adequate testing facilities for vehicle owners to get ample opportunity to get a valid certificate. As for the physical testing centers as long they fall under the ‘orange category’ defined by the Ministry of Environment to responsibly recycle or dispose the old cars among other rules. On the other hand testing centers unable to handle hazardous materials needs to responsibly channel them out better source. The whole system is a centrally connected database eliminating state-based limitation boundary hence limitation easing the whole process by miles. Finally announcing the detailed regulation for recyclers defining the role of recyclers will be published very soon.

Mr. PK Banerjee, Executive Director, Society of Indian Automobile Manufacturers (SIAM) speaking on the policy highlighted the people-centric process the policy brings out. The process singles out credibility and benefits for every stakeholder from manufacturers, OEMs to recyclers. The process is very simple and ensures secondary materials in automobiles making it very lucrative for recyclers of every type. The policy also reviewed old motor vehicle rules to make auto scrappage possible and ensured automated testing facilities in the PPP model. People have been at the forefront of this well-defined process without overlooking the roles and performance of every stakeholder in a very well-designed state and centrally divided system. The policy has been bought at a very right junction and time.

 Mr. Tejas Shah, Business Development Officer, Mono Steel India Ltd. one of the Gujarat based steel producers analyzing the policy from recyclers point of view deemed it to be very positive for the concerned industry as it will help procurement of scrap steel from localized sources decreasing dependency on import while reducing the burdens of cost. Gujarat having the highest auto ownership, downstream units like treatment plans, monitoring system, etc and international standard of certification for greenest and safest recycling system will ensure minimum operating units. There are also existing markets for recycled components which further added investments for the large-scale setting of scrappage facilities all the while reducing the import burden for existing recyclers.

MONO STEEL has the vision to actively participate and implement the policy they have planned to set up large-scale AVSF in several locations of Gujarat in the first phase and throughout India later either independently or with local partnership or PPP model. They are looking forward to bringing international expertise and experience onboard for the project. Mr. Shah put forward for AVSFs- the prospect of recognizing the AVSFs under the start-up category, compensation for AVSFs as organized recyclers, sustainability support, reclining of various materials under one roof, special incentives for foreign collaborators, etc.

Mr. SK Mittal, Chairman, All India Motor Transport Congress (AIMTC) reiterated that although it is a very comprehensive policy all the stakeholders must take into confidence and be widely consulted before the final rollout of the policy.

Mr. Akram Hoque, Founder- Editor, The Policy Times took out three important touch bases from the policy first being the auto industry second the recyclers, and lastly environment. It will definitely be interesting to observe the shift brought in these three dimensions through the implementation of the policy. The policy is very progressive and futuristic however implementation needs to be meticulous.

The Think Tank Partner for this National Conference is GRC India and the Association Partners are All India Motor Transport Congress(AIMTC), Saurashtra Chamber of Commerce & Industries Bhavnagar, Society of Indian Automobile Manufacturers (SIAM), All India Motor Transport Congress (AIMTC), All India Automobile Workshops Association and Ship Recycling Industries Association.

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Vehicle Scrappage Policy Intends To Introduce Skill Based, Competitive And People-Centric Comprehensive  Ecosystem for Auto Scrapping Sector- General VK Singh
The Vehicle Scrappage Policy 2021 enhances  a very people-centric circulatory  process for responsible and scientific scraping of unfit cars to the benefit of every stakeholder involved creating a competent and competitive revenue centric ecosystem
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