New scrap recycling policy a boost for steel sector
Vehicle makers to give rebate on new cars in exchange for old ones
The government on Friday notified a scrap recycling policy to promote use of scrap from vehicles and white goods, and boost a circular economy in the steel sector. The Ministry of Road Transport and Highways (MORTH) and the Department of Heavy Industry will work towards extending producer responsibility under the policy.
It will require manufacturers to incentivise scrapping by giving discounts on new vehicles in exchange of old, unfit ones.
The MORTH may formulate an Automobile Fitness Certification Policy to prevent plying of unfit and polluting vehicles. This would facilitate establishment of fitness centres in the private sector by providing supporting policy framework, the policy, notified by the Ministry of Steel, said.
Original equipment manufacturers (OEMS) and dealers will facilitate collection of old or end-of-life vehicles as well as recyclable spare parts of old cars.
They will start take-back schemes or set up their own scrapping centres or tie up with such facilities. Vehicles considered to be unfit by owners would feed the scrapping centres.
The new scrapping centres will be able to avail of the corporation tax cut benefits announced by Finance Minister Nirmala Sitharaman on September 20. They will be able to pay income tax at 15 per cent.
The Department of Revenue will also consider providing exemptions under Section 35AD of the Income-tax Act to new scrapping units.
Under the policy, vehicle manufacturers will use more recycled material in cars and other products, without compromising safety or environment standards. This will create a market for recycled products. How much of recycled material is used in vehicles will be audited to ensure compliance.
Makers of vehicles or white goods will also have to provide details of how to dismantle their products, and assist recycling centres.
A hub-and-spoke model has been suggested for collecting end-of-life products and structuring the informal recycling sector, based on environment and scientific norms.
The collection and dismantling centres or scrap-processing centres will issue certificates of destruction or proof of scrappage to owners. Records will have to be maintained for scrutiny by authorities.
An inter-ministerial coordination committee has been set up with the steel secretary as convener and secretaries of the MORTH, the department of heavy industry, the ministry of environment, forest and climate change, the department of revenue, and the ministry of labour and employment as members.
It will look into policy changes required for creating an organised steel scrapping ecosystem.
The Centre said there was a deficit of 7 million tonnes in the availability of scrap in 2017. In 2017-18, the import bill for scrap was about ~24,500 crore. With the new policy, the country could be self-sufficient by 2030.