- 15 Jan 2025
- ICICI Securities
INDIAN AUTOMOBILE MANUFACTURERS WILL BE MANDATED TO RECYCLE AT LEAST 8% OF THE STEEL USED IN VEHICLES
News: As per media sources, starting in April 2025, Indian automobile manufacturers will be mandated to recycle at least 8% of the steel used in vehicles sold during the 2005-06 fiscal year ago (end of life vehicles at this point in time), as part of new government regulations under the Extended Producer Responsibility (EPR) framework. This recycling requirement is set to gradually increase to 18% by the 2035-36 fiscal year.
Views: There are currently 82 Registered Vehicle Scrapping Facilities in the country, with a government goal of reaching 100 within the next three months. This measure shall also promote OEMs to set up scrapping centres or tie-up with credible names and shall promote circular economy. It falls under the category of Extended Producers Responsibility (EPR) which is currently being enforced by other sectors such as tyres. Financial impact of the same is difficult to ascertain at this point in time, however this coupled with discounts on new vehicle purchase against the scrapped vehicles, will eventually make vehicle scrappage a reality and shall benefit the industry in the long run (in terms of new vehicle sales).
Impact: Neutral