Automakers will soon be required to recycle a specified percentage of steel from old vehicles, starting in the next financial year, according to sources familiar with the situation. The Ministry of Environment, Forest and Climate Change (MoEFCC) is expected to introduce these new regulations in the near future, marking a significant shift in how vehicle scrapping is managed.
“We recently conducted a meeting with members of the Society of Indian Automobile Manufacturers (SIAM),” a government source disclosed. “The final set of regulations is likely to be announced within the next 10 days.” Government officials noted that this move is part of an effort to formalize vehicle scrapping in the country, ensuring automakers become more “active stakeholders” in the overall policy framework aimed at combating air pollution.
As it stands, India only has 70 registered vehicle scrapping facilities (RVSFs) listed on SIAM’s website. The impending regulations, expected to take effect in less than seven months, will likely compel automakers to make significant investments. These investments may involve establishing their own RVSFs or collaborating with third-party operators, sources indicated.
Earlier, the MoEFCC had issued a draft notification on January 30 under the Environment (Protection) Rules, 1986, outlining the concept of “extended producer responsibility (EPR)” for vehicles at the end of their life cycle. The notification is seen as a framework for managing these vehicles and ensuring proper recycling practices are implemented.
Recently, a SIAM delegation, which included representatives from major automakers such as Hero MotoCorp, Mahindra & Mahindra, Maruti Suzuki India, Ashok Leyland, JSW MG Motor, and TVS Motor, engaged in discussions with the environment ministry. During these talks, the ministry agreed to offer a degree of flexibility concerning the steel recycling mandate stipulated in the draft notification.
The draft initially mandated that in the financial year 2025-26, automakers would be required to recycle or recover at least 10% of the steel used in vehicles placed on the market in the financial year 2005-06. The following year, in 2026-27, the same 10% recycling mandate would apply to vehicles sold in 2006-07. This pattern would continue annually until FY30.
Furthermore, from the financial year 2030-31, the recycling requirement will increase to 20% for vehicles placed on the market in 2010-11, continuing annually until FY35 for vehicles that have been on the road for two decades. By FY35-36, the mandate will rise to 30% for vehicles completing 20 years on the road. However, these targets could be revised.
Sources suggest that the initial 10% recycling requirement might be lowered to 8%, while the 20% and 30% mandates could be reduced to 13% and 18%, respectively. If automakers fail to meet the EPR targets, provide false information, or do not recover the steel as required, the Central Pollution Control Board (CPCB) will have the authority to impose environmental compensation penalties on them.
The final regulations are also expected to allow automakers to introduce buyback schemes, deposit refund initiatives, or similar programs to incentivize customers to sell or return their old vehicles to RVSFs. This would help companies fulfill their EPR obligations, the sources added.
RVSFs will be mandated to generate an EPR certificate for automakers, detailing the quantity of steel extracted from end-of-life vehicles. This information will need to be uploaded to an online platform, where it will be verified by the CPCB or another authorized agency.
The upcoming regulations will specifically focus on steel recycling and will not encompass other vehicle components like batteries, tires, or used oil, which are governed by separate disposal and recovery rules. Notably, the EPR regulations for automakers align with similar rules introduced last month.
The mandate that all new products made from non-ferrous metals, such as aluminum, copper, and zinc, must contain at least 5% recycled material starting in the financial year 2027-28. The recycled content requirement will gradually increase, reaching 10% in FY29. By FY31, products made of aluminum must include 10% recycled content, copper 20%, and zinc 25%.
