India has moved from being a laggard to securing leadership position in automobile production, ranking first in two-wheelers and fourth in cars in the world. Growth in gross domestic product, increasing incomes, rising aspirations, low penetrations levels, higher exports and the need for mobility have contributed to a surge in production and vehicle population. The industry has been growing at a scorching pace after delicensing in 1991. It produced 28 million vehicles (75 % were twowheelers) last year. This rate of growth will continue over the foreseeable future.
Proliferation of automobiles brought in its wake serious issues — roads choked with traffic, increase in accidents and pollution. A less visible but potent issue that will loom large in the near future is the disposal of end-of-life vehicles (ELVs).
Before the industry was delicensed, people held on to their vehicles for longer periods. The few vehicles that came for scrapping were handled by small-scale informal units, mostly located within cities. Today, more people are buying vehicles and some change their vehicles more often.
The situation took a new turn when the National Green Tribunal mandated scrapping of 10-year-old diesel and 15-year-old non-diesel cars in the National Capital Region. Other cities will soon follow suit. Vehicles produced 15-20 years earlier will be due for scrapping — and they will be in large numbers. Approximately 9 million vehicles (75% two-wheelers) will be due for scrapping by 2020. This will increase to 28 million by 2030. The informal industry does not have the capacity to tackle even 10% of the volumes.
INFRA HURDLES
High cost & non-availability of land: Lack of regulations governing operation of recycling units
Lax enforcement of safety & hygiene standards: Reluctance of new entrepreneurs to get into this area
There is a complete mismatch between India’s world-class manufacture of automobiles and the recycling infrastructure, which is primitive. In the West, the industry grew gradually. Scrapping systems developed in tandem. In India, however, the scrapping infrastructure remained static despite a spurt in vehicle population.
In the absence of avenues for disposal, the public will start abandoning old vehicles. Vehicles are increasingly being dumped along our highways. There are newspaper reports of abandonment of vehicles in open lots and on the roadsides in Pune, Goa, Mumbai and elsewhere. Detection of ownership can be dodged by effacing engine and vehicle numbers and removing number plates. If unchecked, abandonment of vehicles will spread like cancer.
The scrapping units — some are located in residential areas — use crude methods for dismantling vehicles and operate with low yield. Their operations pollute air and poison groundwater. They bypass the crucial “de-pollution” stage of recycling. They do not neutralise airbags and seat belts or degas air-conditioning units. The waste they generate is mixed with municipal waste. Lack of space constrains them from carrying out effective depollution and proper recycling.
Europe and Japan have legislated quantitative targets for reuse, recycling and recovery from ELVs. The US and Canada leave it to market forces. In the US, Europe and Japan, around 85% by weight of cars is recycled using modern techniques. During depollution, batteries are removed, oils and fuels are drained, heavy metal items are separated and airbags deactivated. Saleable parts are removed. The remaining hulk is compacted into small bundles by powerful presses. The bundles are crushed and broken into sizes that are suitable to be fed into furnaces. Steel and non-ferrous items are separated by magnetic and eddy current separators. The 15% by weight of leftover auto shredder residue (ASR) comprises of glass, metals, ceramics, glass, rubber, plastics and other materials. ASR is dumped in designated landfills in the US and Canada. In Europe and Japan, where land is scarce, ASR is treated by mechanical or chemical means. Less than 5% by weight ends in landfills.
ELV recycling is a win-win for society. It will create jobs, conserve resources, save energy, reduce pollution and mitigate climate change. Recycled aluminium and steel consume 5% and 20% of energy, respectively, compared with energy required for production of virgin metals. Effective recovery can reduce import of steel scrap and aluminium ingots, saving precious forex. Recycling uses proven technologies and is a relatively low hanging fruit. Scrapping units should be relocated away from residential areas. Recycling parks (modelled on industrial estates) could house the units. These recycling units would have to be equipped with modern techniques. They can be incentivised with access to funds and tax holidays. Processes like deregistration, IT support, depollution and shredding can be centralised.
India has no regulations for ELVs. Apart from a joint venture of public sector undertaking MSTC with the Mahindra group, recycling is handled by small-scale units. We have to quickly set up recycling infrastructure, including processing of ASR. Governments, industry and stakeholders should jointly formulate time-bound action plans for setting up a viable and modern recycling industry. Inaction is guaranteed to generate chaos. There is no time to lose.
The writer is chairman of SIAM recycling group and author of Recycling End of Life Vehicles
