The much-awaited draft policy on vehicle scrappage is finally out. But the draft policy also misses an opportunity: Of designing the policy as an effective stimulus programme for green recovery in the sector to achieve deeper and quicker air quality benefits.

Background

• The policy outlines the criteria for defining end-of-life vehicles and scrapping them.
• It also makes provision for scrapping facilities for safe disposal of waste and material recovery.
• This is an important step forward towards building infrastructure for organised and scientific scrapping of old vehicles.

The proposal

• This proposed policy seeks to phase out unfit vehicles to reduce vehicular pollution, meet the climate commitments, improve road safety and fuel efficiency, formalize informal vehicle scrapping industry and recover low-cost material for the automotive, steel and electronics industry.
• The policy expects to spin jobs and attract investment as well.
• It is a big positive for supporting a network of well-equipped scrappage facilities with adequate environmental safeguards to stop unsafe dismantling that contaminates the environment.

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New Vehicle Scrappage Policy

Issues with the policy

(1) Advisory nature

• This policy has only ‘advised’ the state governments and the automobile industry to provide voluntary incentives to the owners of old vehicles.
• The central government has not committed to make it a fiscal stimulus strategy for quicker renewal of ageing, heavy-duty vehicle fleet with BS-VI vehicles — or to link other segments with targeted electrification.

(2) Achieving fleet renewal

• The focus on targeted fleet renewal for maximum emissions gains is still weak.
• The proposed policy puts the entire onus of incentivizing fleet renewal on the state governments.
• They have been advised to waive off a big chunk of road tax and registration fees on replacement vehicles.
• These are important sources of state revenue, and the reaction of the state governments is still not known.

(3) No stimulus

• The more compelling question is whether the central government would consider a centrally supported stimulus programme for post-pandemic green recovery.
• This is the global trend wherein governments have been giving conditional bailouts or tax support linked to emissions targets.

What can be an effective strategy?

(1) Transportation vehicles

• For heavy-duty vehicles, the policy can take a more nuanced approach.
• Consider that some truck owners may want to only dispose of the very old trucks without replacing them. But others may want to scrap and replace the older trucks.
• In that case, a rebate can be given to the owners of end-of-life vehicles who are interested in ‘only scrapping’ the vehicle without immediately replacing them.
• And this rebate can be given based on a scrappage certificate from authorized scrappage centres.
• Old trucks with more economic life left can get a comparatively higher incentive as that will give higher emissions benefits.

(2) Personal vehicles

• For these vehicles, the central incentive can be linked with replacement with electric vehicles.
• This can be added to the normal scrapping of end-of-life vehicles as already proposed in the draft policy. This can maximise air quality gains.
• Personal vehicles are numerous and general public support for their fleet renewal can divert a lion’s share of the allocated budget from the priority heavy-duty segment.
• Therefore, the public support for the personal vehicle segment can be linked only with voluntary electrification.

Build-in manufacturers’ responsibility

• The new policy also needs to align with the mandate for the manufacturers to meet targets for recyclability of material.
• Make this mandatory as part of the scrappage policy.

We have AIS 129

• It is encouraging that the Automotive Industrial Standard-129 (AIS 129) on reuse, recycling and material recovery from vehicles were framed in 2015.
• This requires 80-85 per cent of the material used in vehicle manufacturing by mass to be recoverable/recyclable/reusable at the end of life.
• AIS-129 also restricts the use of heavy metals including lead, mercury, cadmium, hexavalent chromium, etc, and asks for the coding of plastics to inform dismantlers.
• The requirement of recyclability should be extended to 85-95 per cent to maximise material recovery as well as energy recovery from residual waste like used oil, non-recyclable rubber etc.

Way forward

• This first-ever formal scrappage policy in India is urgently needed to help build infrastructure for safe disposal and material recovery to minimise environmental hazards.
• But India would be adopting scrappage policy during these unprecedented pandemic times, so it is necessary to leverage this targeted fleet renewal with well-designed central support for a post-pandemic green deal.

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