Vehicle scrapping policy will lead to 20 dismantling units in India

The Ministry of Road Transport and Highways (MoRTH) is likely to announce on October 2 its policy on scrapping commercial vehicles.

After that, the Union ministry of steel will set up 20 scrapping centres in various parts of the country to produce steel from the scrap under a separate policy.

“The Ministry of Steel will introduce a steel scrap policy, which, in conjunction with the much-awaited vehicle scrapping policy by MoRTH, will lay down the rules and regulations for using scrap from old vehicles to produce steel,” said Aruna Sharma, steel secretary, while speaking at an event here.

“We are waiting for the transport ministry to come up with its policy on the end-of-life of commercial vehicles. The steel scrap policy will be based on this. Once this policy is in place, India will start producing steel from scrap. For a steel producer, it does not make a difference whether you make steel from iron ore or scrap. The National Steel Policy’s target of producing 300 million tonnes (mt) by 2030-31 includes steel made from both iron ore and scrap,” Sharma said.

The scrap units will be set up either by the private sector or as public-private partnerships (PPPs), Sharma added. The international scrap recycling industry is worth over $500 billion and directly employs more than 1.6 million people. It handles over 600 mt of recyclables every year, the Federation of Indian Chambers of Commerce and Industry (Ficci) has said in a report.

“The one-time demand for scrap will go up. Globally 90-95 per cent of the vehicles are recycled,” said Abhaya Agarwal, partner and PPP leader, EY India.

The availability of scrap, however, would not affect the business of the steel industry, he said. “There will be incremental demand,” he said. The scrap policy will reduce dependence on imports, especially for secondary steel plants. The country imports, on average, 9-10 mt of metal scrap every year, the Ficci report added.

“With India targeting a steel production capacity of 300 mt a year by 2030-31, the focus of the steel ministry is on domestic consumption and making the sector globally competitive. The ministry has identified construction and manufacturing sectors like rural development, urban infrastructure, roads and highways, and railways as the highest consumers of steel,” said Union Steel Minister Chaudhary Birender Singh in his video message to the conference.