India's scrappage policy will pave the way to sustainable recycling of cars

Recycling of one tonne of scrap into metal results in a saving of 1.2 tonnes of iron ore, 630 kg of coking coal, 55 kg of limestone and 287 litres of oil
Why should the promoters of an equally owned vehicle recycling joint venture introduce their enterprise as Cero, a Spanish word that means zero? This in spite of the JV’s incorporation as Mahindra MSTC Recycling Private Limited (MMRPL) 

“Cero appropriately describes our zero pollution approach to recycling of end-of-life vehicle (ELV) from its collection to depolluting to dismantling to baling of metals. A vehicle on its dismantling generates much value by way of recovery of ferrous and non-ferrous metals, particularly steel, which constitutes up to 70 per cent of the structure. We are committed to creating an altogether new ecosystem for recycling of vehicles that have run their course from the environment-damaging way the work is done now in the sizeable unorganised sector,” says MSTC Chairman BB Singh. 

Whatever the reasons, the country that hosts the world’s fourth largest automobile industry is a late starter in recycling of ELVs in an environmentally sustainable way. There are as many as 28 million vehicles of the pre-Bharat stage emission standards introduced in 2000 and these are a major source of pollution. What has happened till now by way of operation of the country’s only authorised recycling unit owned by MMRPL at Greater Noida is an eye opener to the enormous volume of wealth in the form of steel to be recovered in a scientific way for reuse by electric and induction arc furnaces (EAF & IAF). 

Secondary steel industry officials agree with Singh that “a well developed authorised ELV, white goods and plant and machinery recycling industry could free India from its annual import dependence of steel scrap estimated at 7 million tonnes (mt).” 

Secondary steelmakers get a supply of about 30 mt of steel scrap from informal recyclers of ELVs out of their total annual requirement of 37 mt. Mayapuri and Jama Masjid in Delhi, Grant Road in Mumbai and Mullick Bazar in Kolkata tell graphically as to how clumsily old vehicles are dismantled for scrap recovery in flagrant violation of the hazardous and other wastes (management & transboundary movement) rules, 2016. 

A car or a truck needs to be depolluted by way of taking out burnt oil, grease, battery and tyres in a walled environment and then dispose these of in a regulated manner. But in Mayapuri or Mullick Bazar, one can find burnt oil spilt all over and piles of plastic and rubber materials fouling the environment.

When a vehicle is handed over to an authorised recycler for a consideration approximating the value of scrap metal, the owner has the comfort of its deregistration with the regional transport authority and also a “certificate of destruction.” But there is no certainty of extinguishment of registration and vehicle destruction when an unauthorised agency acquires an ELV, exposing the owner to risks of it being misused. Vehicles reach the end-of-life stage either in a natural way, that is when their life is over due to ageing and wear and tear or when they become unusable due to accident, vandalism and natural disaster. 

“Recycling of ELVs should in all cases be driven by twin objectives of cleanliness of operation at every stage up to shredding and maximum recovery of steel and other metals from a ripped off  vehicle,” says Singh. 

Next month will see the JV commissioning a second recycling unit in Chennai. “For the third venture, there will be a toss-up between Mumbai and Pune. The fourth one will be in Kolkata and my distinct preference will be a site at Budge Budge where you have the benefit of multimodal transportation by road, rail and river. The West Bengal government owns land there and we shall be seeking allotment of five acres from that holding,” says Singh. 

The entrepreneurial flame seldom burns bright among our bureaucrats. But the immediate past steel secretary Aruna Sharma is among the small group of officials who saw raw material security for secondary steel producers if only ELVs were recycled scientifically in large numbers. Before her superannuation, Sharma not only got the Mahindra and MSTC, which come under the steel ministry to form a 50:50 alliance but also gave the JV a road map for ELV recycling capacity creation in the country’s four regions. The JV’s recycling chain will include auctioning of baled metals and dismantled components using the e-commerce platform of MSTC. 

“Actual users of steel scrap such as EAFs and IAFs and also traders are allowed to offer bids for materials put on auction. This makes the entire recycling chain of our JV transparent,” says Singh. 

The important question is this: Will this JV encourage others to set up ELV recycling plants? Recycling movement on scientific lines has just begun and ideally this has to go far, considering the country’s large inventory of old rickety vehicles and other scrap generating items. But much will depend on the national scrappage policy, which is on the cards. Mahindra & Mahindra Managing Director Pawan Goenka rightly wants the policy to be voluntary rather than mandatory but the incentive should be such as to motivate people to give up ELVs for recycling. 

Compared with steel made via the BF-BOF route, recycling of one tonne of scrap into metal results in a saving of 1.2 tonnes of iron ore, 630 kg of coking coal, 55 kg of limestone and 287 litres of oil. There is also a 58 per cent reduction in greenhouse gas emission and 17 per cent energy saving when steel is derived by way of scrap recycling, says the government’s draft scrap policy. The compulsion to generate more quality scrap internally is linked to the official target of the EAF/IAF route of steelmaking having a share of 35 to 40 per cent of the 300 mt steel capacity to be built by 2030-31. Moreover, besides its use in EAF/IAF as the principal raw material — the other feedstock being sponge iron, hot briquetted iron and pig iron — primary integrated producers too use scrap in the charge mix of BOF as a coolant and for operational efficiency. 

Singh says the demand for scrap will be around 55 mt by 2030-31, which can be had internally, provided the organised recycling industry — currently in its infancy — gains traction. In fact, because of its long coastline, India has the potential to become a big centre for scrapping of old vehicles that may be imported from south and southeast Asia and the Far East.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel