29 Aug “Paving the Way for Cleaner Roads: India’s Vehicle Scrapping and Modernization Strategy”

This article covers “Daily Current Affairs” and topic details of the Voluntary Vehicle Modernization Program.

Syllabus mapping:

GS-3- Environment-Pollution: Air pollution policies to combat air pollution.

For Prelims:

What is the Voluntary Vehicle Modernization Program and its features?
What are the air pollution control policies in India?

For Mains:

What are the features of the Voluntary Vehicle Modernization Program, challenges to combat air pollution in India, various initiatives and committees reports, and recommendations to make this policy more effective?

Why in the News?

The Ministry of Road Transport and Highways has introduced the Voluntary Vehicle Modernization Program, also known as the Vehicle Scrapping Policy, to develop a system for retiring outdated and polluting vehicles nationwide. This initiative will be carried out through a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs).

VEHICLE LIFE CYCLE IN INDIA:

Resource Efficiency from ELVs
Waste Contribution: End-of-life vehicles (ELVs) are a major source of solid waste, following municipal solid waste.
Material Composition: An average passenger car consists of about 69% steel, 16% aluminum, 5% plastic, and 4% rubber, with the rest being foam, copper, and glass.
Recycling Potential: Effective recycling of ELVs can reduce environmental impact and lower life cycle emissions. ELVs could potentially generate INR 115 billion worth of steel scrap annually.
Current Challenges: Current scraping methods are inefficient, and more regulated scrapping is needed to recover valuable materials and mitigate emissions.

Disposal Process for End-of-Life Vehicles
Deregistration: The vehicle’s last owner must hand over the ELV to a scrapping facility, with deregistration completed through the VAHAN portal and the National Crime Records Bureau.
Depollution: Removal of hazardous materials such as coolant, oils, and AC gas is the first step in the scrapping process.
Dismantling: Post-depollution, vehicles are dismantled, and components are segregated for recycling. Extensive dismantling is common in India due to cheap labor.
Shredding: The remaining vehicle body is shredded, which is energy and capital-intensive but suitable for processing large volumes. Shredded residue includes a mix of metals, plastics, rubber, textiles, and glass.

Policy Landscape of Vehicle Scrappage

1. Automotive Industry Standard–129 (AIS–129), 2015: Establishes guidelines for automobile recycling, requiring vehicles to be at least 80% recyclable and 85% recoverable by mass. It also bans the trade of second-hand parts from critical vehicle assemblies such as engines and chassis.
2. Guidelines for Environmentally Sound Facilities for Handling, Processing, and Recycling of End-of-Life Vehicles (ELV), 2019: Issued by the Central Pollution Control Board (CPCB), these guidelines cover environmentally sound practices for ELV management, including handling, depollution, dismantling, and shredding.
3. Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021: Set by the Ministry of Road Transport and Highways (MoRTH), these rules govern the establishment and operation of Registered Vehicle Scrapping Facilities (RVSFs). They include provisions for fees related to registration and fitness testing, and offer concessions for vehicle scrapping.
4. Recognition, Regulation, and Control of Automated Testing Stations Rules: These rules authorize state governments to operate Automated Testing Stations (ATS) for vehicle fitness tests. Vehicles failing the tests must be scrapped if they do not pass retests.

What is the Vehicle Scrappage Policy in India?

The Vehicle Scrappage Policy is a government-initiated program designed to retire old and unfit vehicles and replace them with newer, cleaner models on Indian roads. The main objective is to establish a system for removing outdated and polluting vehicles, thereby reducing the country’s carbon footprint. Under this policy, Vehicles that are older than 15 years for commercial use and 20 years for private use will be scrapped if they fail the fitness test, thereby classifying them as End-of-Life Vehicles (ELVs).

                                                                    Credit: TERI.

The key goals of the Vehicle Scrappage Policy:

A. Reduce Pollution: Scrap around 1 crore vehicles lacking valid fitness and registration to cut emissions.
B. Enhance Safety: Improve road, passenger, and vehicle safety by removing old, unfit vehicles.
C. Increase Efficiency: Boost fuel efficiency and lower maintenance costs for vehicle owners.
D. Stimulate the Auto Sector: Increase vehicle sales and create jobs in the automotive industry.
E. Formalize Industry: Transition the informal vehicle scrappage sector to a regulated system.
F. Support Raw Materials: Increase the availability of low-cost raw materials for the automotive, steel, and electronics industries.

Benefits of the Policy

1. Air Quality: Reduces air pollution and improves air quality.
2. Market Impact: Drives demand for new vehicles, replacing over 51 lakh light motor vehicles that are over 20 years old.
3. Job Creation: Promotes job growth in the automobile sector, including new scrapping centers.
4. Safety Enhancements: New vehicles will have better safety features.
5. Recycling Boost: Increases activity in the recycling industry, leading to higher revenue.
6. Incentives for Owners: Offers tax benefits and better scrap value for parts like tyres.

Vehicle Categorization for Scrappage

1. Government Vehicles: Scrapped if over 15 years old, effective from April 1, 2022.
2. Commercial Vehicles: Must undergo a fitness test after 15 years; if deemed unfit, they will be scrapped.
3. Private Vehicles: Subject to a fitness test after 15 years.
4. Vintage Vehicles: While older, these are considered separately due to their lower usage and better maintenance.

Fitness Tests for Vehicles

Purpose: Assess the vehicle’s roadworthiness and environmental impact.
Process: Conducted at authorized Automated Testing Stations.
Validity: Fitness test results are valid for five years.
Outcome: Vehicles failing the test cannot renew registration. A green cess of 10-15% of road tax may apply to older vehicles passing the test.
Options: Owners of unfit vehicles can either scrap or repair them to pass the fitness test.

Comparison of Vehicle Scrappage Systems

Present System vs. Proposed System
Setup:
Present: Unorganized, with low traceability of vehicle ownership.
Proposed: Organized, with collection through traceable channels.
Pricing:
Present: Opaque, with high variance in pricing and cash transactions.
Proposed: Transparent, with index-based pricing and digital payments.
Industry Scale:
Present: Fragmented; even large traders operate at 2-5 KTPA capacity.
Proposed: Economies of scale; operations scaled 3-5 times larger than current large traders.
Value Addition:
Present: Low-value addition; poor quality, no shredding, and no tax collection.
Proposed: High-value addition; higher recovery rates from scrap and tax revenue for the government.
Compliance:
Present: Lower compliance with environmental protection laws, with limited enforcement.
Proposed: Environmentally friendly, with improved compliance to environmental protection regulations.

Challenges for India’s Vehicle Scrappage Policy

The vehicle scrappage policy in India aims to phase out old, polluting vehicles but faces several challenges:

Informal Sector Issues:
Environmental Concerns: Many scrapping units are informal and lack proper equipment, leading to environmental harm and health risks.
Hazardous Materials: Improper handling of refrigerants like Freon can damage the ozone layer, and there’s no authorized system for collecting these substances.

Infrastructure and Resources:
Insufficient Facilities: There aren’t enough Registered Vehicle Scrapping Facilities (RVSFs) or Automated Testing Stations (ATSs) in operation as per regulations.
Inadequate Financial Mechanisms: Current facilities and financial systems aren’t sufficient for large-scale scrapping.

Incentive and Awareness Issues:
Inconsistent Incentives: Incentives for scrapping are decided by state governments and vehicle manufacturers, which can be uneven.
Lack of Awareness: Many people don’t know how to access available incentives, leading to confusion.

Inspection and Maintenance:
Time-Consuming Inspections: On-road emissions checks are slow and inconvenient, and there are no automated inspection devices.

Economic Challenges:
Endowment Effect: Vehicle owners often value their old vehicles higher than their actual worth, making them hesitant to scrap unless given substantial compensation.
OEM Viability: Setting up scrapping units is only viable if a large number of vehicles are processed. There’s also a lack of regulation for aftermarket parts and no extended producer responsibility (EPR) for OEMs.

Circular Economy and Recycling:
Plastic Recycling Difficulties: Sorting and recycling plastics is challenging, and mixed plastics can lead to poor-quality recycled products.
Circular Economy Integration: There’s no framework for integrating recycled materials back into production efficiently.

Way Forward for India’s Vehicle Scrappage Policy for Better Implementation

To effectively reduce on-road emissions and manage the end-of-life vehicles (ELVs), the following steps are essential:

1. Role of Central Government

Regulatory Environment
Set Targets: Establish clear targets and responsibilities for OEMs under the Extended Producers’ Responsibility (EPR) to improve recovery and recycling of ELVs. Bring all manufacturers into compliance.
Mandate Standards: Enforce the Automotive Industry Standard–129 for vehicle design. Define which non-critical parts can be reused and create standards for these secondary parts.

Phased Implementation
Immediate Guidelines: Announce and implement guidelines from the Ministry of Road Transport and Highways (MoRTH) across all states, with a focus on states with high vehicle populations like Maharashtra, Uttar Pradesh, Tamil Nadu, Gujarat, and Karnataka.
Support Infrastructure: Coordinate with state governments to develop the necessary infrastructure, including RVSFs and ATSs.

2. Role of State Governments

Inspection and Maintenance (I&M)
Provide Land: Allocate land for setting up automated test stations (ATS) and explore public-private partnerships for their development.
Update Database: Maintain a centralized database of vehicles for regular updates and compliance. Implement penalties for non-compliance.

Improve Customer Awareness
Awareness Campaigns: Create targeted awareness campaigns about the scrappage policy and incentives.
Incentives: Offer conditional purchase incentives for electric/hybrid vehicles for those who present a scrapping certificate. Consider a refundable advance recycling fee at the time of vehicle purchase.

Support to RVSFs
Assist with Land: Help with land acquisition for RVSFs and offer incentives to the recycling industry.
Dispute Resolution: Speed up the resolution of disputes related to accident vehicles to avoid deterioration and expedite scrapping.

Inclusion of Informal Sector
Promote Formalization: Integrate informal ELV markets by setting up depollution centers nearby and enforcing guidelines with regular audits. Provide training to informal dismantlers.

3. Role of Original Equipment Manufacturers(OEM) 

Extended Producers’ Responsibility (EPR)
Reverse Logistics: Implement reverse logistics for the collection, recycling, recovery, and disposal of ELVs. Provide detailed material information to calculate recyclability and recoverability.
3Rs—Recycle, Reuse, Reduce
Design for Recycling: Design vehicles for easier recycling, aiming for at least 85% recyclability and 95% recoverability by mass, in line with EU standards.
Gasses and Plastics: Mandate the recycling of refrigerant gasses and use clear coding for plastic components to facilitate recycling.
Management of Electric Vehicles
Plan for End-of-Life: Integrate end-of-life management into electric vehicle policies from the outset.

4. Role of RVSFs

Compliant Infrastructure: Build scrapping facilities that meet environmental and safety standards.
Scrap Value and Fees: Base scrap value on vehicle weight and material market value. Implement a residue fee to reduce landfill waste and encourage proper dismantling.

Conclusion:

The vehicle scrappage policy in India, introduced a year and a half ago by the Ministry of Road Transport and Highways, is still developing. While the expansion of Registered Vehicle Scrapping Facilities (RVSFs) is underway, it is slow, particularly outside major cities. The policy needs updated testing procedures and a robust system for managing end-of-life vehicles (ELVs), including reverse logistics under Extended Producers’ Responsibility (EPR). Vehicle designs should facilitate reuse and recycling. Government support for RVSFs, increased public awareness, and pilot projects with OEMs are crucial. The policy aims to reduce air pollution, improve resource efficiency, and establish a sustainable scrappage system, requiring effective implementation to balance development and environmental goals.

PRELIMS QUESTION:

Q. Which of the following are key components of the Voluntary Vehicle Modernization Program?
1. Vehicle Import policy
2. Registered Vehicle Scrapping Facilities (RVSFs)
3. Electric Vehicle Subsidy Program
4. Public Transport Expansion Plan

Select the correct answer using the code given below:
A. Only one
B. Only two
C. Only three
D. All four

ANSWER: A

Mains Question:

Q. Discuss the objectives and potential benefits of the Voluntary Vehicle Modernization Program introduced by the Ministry of Road Transport and Highways. How does the program aim to address environmental concerns and help to reduce air pollution in India?
(250 words 15 marks)

A government program/Policy to combat the Air pollution

Munde Dhananjay Navnath