Scrap generation from end-of-life (ELV) vehicles in India is expected to increase by 64% to nearly 9 million tonnes (mnt) over the next five years. SteelMint understands. While government policy support will boost ferrous scrap generation, the challenge lies in how soon Indian units can match up to the procedure benchmarks followed in the US, UK and especially Japan. These factors as well as many other aspects were discussed by Sachin Shetty, Managing Partner, Quesrow Consulting, at a recent webinar organised by SteelMint on the topic, “India’s scrap generation from ELV in next 5 years”.
SteelMint documents the key takeaways from the webinar:
What could be the possible drivers?
- Scrappage policy to boost efficiency: The new government policies, incentivising scrapping and encouraging setting up of newer and formal recycling facilities, will definitely increase the efficiency of the recycling. It is expected that the steel scrap recycling industry may feed about 8-9 mnt of ELV scrap into the system by 2026 and about 14-15 mnt by FY’31.
- Investment in auto scrap recycling plants: Currently, there are 2 OEM-backed facilities operational in north India. Another one by Tata Steel is underway. Furthermore, Tata Motors has also expressed its interest in setting up ELV recycling units in Gujarat and Maharashtra. As per the Ministry of Road and Transport, 75 such units are expected to be commissioned in the near term. In addition, 400 authorised collection units are planned to be set up by 2026.
India’s ELV scrap market scenario
In 2021, India generated about 26.5 mnt of scrap domestically, of which, 30% was from end-of-life vehicles which stood at around 8 mnt.
Delhi is the hub of ELV scrap recycling in India, contributing around 1.5-1.6 mnt. Other key centres are Bangalore (0.3-0.4 mnt), and Mumbai (0.3-0.5 mnt). Cities like Kolkata, Chandigarh, Pune Chennai, Meerut etc account for a combined 0.67 mnt of total ELV scrap generation in the country.
Automobile, railways, shipbuilding, hard stocks etc. are the main sources of end-of-life vehicles. Railways generate about 3.5-4 mnt, auto about 3-3.4 mnt and shipbuilding about 1 mnt.
Ferrous, non-ferrous components in ELV
In end-of-life vehicles, non-ferrous constitutes for about 10-15% and the rest is ferrous.
Non-ferrous components are engine blocks that are used in furnaces for secondary aluminium ingot making while cable conductors, motors, windings etc are copper elements.
Ferrous scrap is the steel part that goes for recycling.
Current facilities operational
Indian ELV industry is slowly becoming a formal, automated and mechanised sector with the entry of auto OEMs/steel mills-supported recycling units.
Currently, there are two OEM-backed facilities operational in the country-
1) Mahindra CERO: It is a joint venture of Mahindra Accelo and MSTC. The current recycling capacity of this facility is around 50,000 vehicles per year with units located in Delhi, Pune and Chennai. The company is planning to expand the capacity to over 600,000 units in 25 different cities by 2025.
2) Maruti Suzuki Toyotsu India: This is a joint venture of Maruti Suzuki and Toyota Tsusho Group. Currently, it has a capacity to recycle about 25,000 vehicles per year. It has its unit based in Noida, Uttar Pradesh.
Tata Motors plans
Tata Motors signed a memorandum of understanding (MoU) with the Maharashtra government to build a facility with recycling capacity of 35,000 vehicles per year. It has also planned to enter an MoU with the Gujarat government to build a recycling facility with an annual capacity of 36,000 vehicles.
How recycling plants in developed countries are different from India’s?
In the US and Europe, there are a lot of formal recycling units, shredders and other professional processes. But the Japanese ELV recycling market is the most organised one in the world. ELV recycling plants in Japan were launched in 2005 and ever since they have been growing in terms of both ELV that have gone for recycling and the number of centres. The reasons being-
1) The stakeholders involved in ELV recycling are auto OEMs and steel mills.
2) The process of surrendering the vehicle, documentation, purchasing, dismantling and recycling is much more effective and customer friendly.
In India too, some of the policy guidelines are being formulated in this direction. In the short-to-medium term, it is expected that the country’s ELV market will follow the global system for recycling.
Leave a Reply