Budget 2024: MRAI urges govt to remove import duty on aluminium scrap

Ahead of the budget, recycling industry body MRAI has urged the government to remove the import duty on aluminium scrap, saying it will help promote sustainability in the industry.

According to the Material Recycling Association of India (MRAI), the recycling process of aluminium scrap emits only 0.3 million tonnes (MT) of Co2 on per tonne of production compared to 14 tonnes of carbon emissions on the production of 1 MT of aluminium through smelters route which involves maintaining of coal-based capacities for power supply.

"Among the key challenges faced by the Indian aluminium recycling industry is 2.5 per cent import duty on aluminium scrap. It is a key raw material for aluminium recycling and the government should make it to zero until the quality material (scrap) is available in sufficient quantity in the domestic market,"AI said in a letter to Finance Minister Nirmala Sitharaman.

Finance Minister Nirmala Sitharaman will present the full Union Budget for the financial year 2024-25 in Parliament on July 23.

Many countries have realised the importance of scrap that it is sustainable because of recyclable in nature.

The demand driver for aluminium in the next few years is going to be substantially higher due to India's projected higher growth of GDP and ambitious infrastructure development.

The production of primary aluminium metal is also associated with the consumption of large volumes of natural resources, bauxite ore and coal and the generation of large quantities of solid wastes, it noted.

"Aluminium recycling has become an important part of aluminium production in India because it is much less energy intensive than the production of primary aluminium,"AI said.

Lower per capita aluminium consumption of 2.5 kg in India is also a challenge against a world average of 11 kg, as the recycling industry has to rely more on imports for quality aluminium scrap to meet the shortfall.

"India's aluminium recycling industry plays a pivotal role in harmonising efforts to combat climate change and bolster environmental sustainability. Recycling helps to combat the climate crisis by limiting the use of raw materials, protecting natural resources like bauxite and reducing the waste going into landfills,"AI President Sanjay Mehta said.

"We need to take decisive steps here when it comes to its goals towards sustainability and low carbon ecosystem. World over metal scrap, especially Aluminium is considered as the greenest raw material to be used for metal production.

"Having import duties on Aluminium scrap could be retrograde and would decelerate our efforts in reaching sustainability goals," said Dhawal Shah, Senior Vice President, ofAI.

The association has also sought zero duty on copper scrap and brass scrap which attract 2.5 per cent duty at present, and zinc and lead which have 5 per cent import duty.