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AUTOMOTIVE INDUSTRY Scrap the way to a better circular economy – The scrappage policy

Jul 30, 2021

An organised scrappage process can improve resource efficiency by imbuing circularity in automobile manufacturing through the reuse and recycling of parts. The opinion feature discusses how the scrappage policy in India will lead to a better circular economy.

In February this year, the Union budget announced the voluntary vehicle scrappage policy. This is a vital step on the way to build infrastructure for organised, scientific scrapping of old vehicles and is needed at once to help build infrastructure for the safe disposal and material retrieval to lessen environmental hazards.

The scrappage policy can give a constructive push to start a fresh and promising automotive circular economy, whereby the value embedded in End-of-Life Vehicle (ELV) components and materials is evoked through reusing, recycling and recovery. India has almost 24 million ELVs that need to be recycled. These vehicles are either old or in poor condition. A study says that old cars lead to 10 times more emissions and old trucks almost eight times more emissions than the new ones. The elimination of old vehicles from roads is expected to cut air pollution by at least 25%. Besides, scrapping them could lead to a drop in steel imports. Several governments have been in view of executing a new generation of incentives and scrappage programmes to improve the local automotive value chain through vehicle sales while growing fuel effectiveness and dropping greenhouse gas & air pollution emissions from road transportation.

In its latest report, Ernst & Young (EY) has stressed on the prominence of getting rid of old vehicles, predominantly old diesel vehicles, from the fleet to markedly diminish direct exposure emission on roads. The report indicates that the policy would produce a circular economy that would profit both existing and new investors. From an environmental perspective, it will not only head towards the decline of emissions but also help with the recycling and reuse of spare parts.

What’s more, with augmented oil import bill and an upsurge in fuel prices, the policy is also anticipated to give a lift to eco-friendly vehicles like electric cars. With people encouraged to scrap their old vehicles, this will provide them with the opportunity to buy electric vehicles that generate zero direct emissions and are somewhat low-priced because of government subsidies.

Additionally, the scrapping market in India is enormously unorganised. And the scrapping process can make as much an impact when it comes to the circular economy. Environmentalist, Vimlendu Jha says that what’s important is whether we have the infrastructure to implement the policy properly.

Hence, the reliable collection of scrap vehicles and stopping illegal dumping becomes vital. We should, in fact, focus on helping to standardise the unorganised vehicle scrappage sector in India.

The scrappage policy aims at achieving sustainability and a green revolution through appropriate discarding of ELVs, commercially & lawfully. But India is adopting the policy during the unprecedented times of COVID-19, so it becomes essential to influence this goal with a well-made plan & support for heading towards a green & sustainable automotive circular economy in the post-pandemic world.

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