On the sidelines of the launch of Honda Motorcycle & Scooter's first-ever BS-VI compliant two-wheeler in India, Union Minister of Road & Transport Nitin Gadkari stated that the government is currently working on a vehicle scrappage policy. He said that cooperation from manufacturers and finance ministry is needed for a viable scraping policy and that the government is open to suggestions from stakeholders. There will be a scrapping policy for both two- and four-wheelers soon, he added.
Gadkari mentioned that the government will assist auto manufacturers in setting up vehicle scrapping centres and that the government has also received third-party interest.
In a draft policy submitted by the transport ministry in July this year, it was suggested that those who scrap their old vehicle would not have to pay registration charges on their next vehicle. The customer would have to present a scrapping certificate issued by a government recognised scrapping centre.
Mahindra in association with Metal Scrap Trade Corporation Ltd (MSTC) has already set up scrapping centres. Mahindra Accelo, a fully owned subsidiary of Mahindra & Mahindra, has formed a joint venture with MSTC for this project under a new brand called CERO (Mahindra MSTC Recycling Pvt Ltd). The Mahindra CERO is now the first authorised scrapping centre in India and has been given the authority to certify owners of scrapped vehicles.
Also in July this year, the NGT directed the government to formulate a standard operating procedure (SOP) for setting up authorised recycling centres to scrap them scientifically. The tribunal pointed to the increasing number of 'end of life' vehicles which will be over 21 million by 2025.
According to the NGT, about nine million vehicles of which 75 percent are two-wheelers will be due for scrapping by 2020. The number will inflate to over 21 million by the end of 2025. There is "urgent need to evolve an appropriate mechanism to set up authorized recycling centres compliant with the environmental norms and prohibit unorganized, unscientific and unauthorized scrapping activity", the NGT said.