Assessing India’s readiness for transition to EVs

Various stakeholders related to the EV ecosystem who are engaged in activities like manufacturing, assembling, repairing, refurbishing, recycling, scrappage, etc. have either started or are expected to start operations in India.

The Government had earlier announced that by 2030 the sale of electric vehicles (EVs) shall account for 30% of private cars, 70% of commercial vehicles and 80% of two and three-wheelers being sold in India. The objective is to usher the nation in sustainable mobility, decarbonise the transport sector, reduce greenhouse gas emissions, reduce fuel import dependence and improve energy conservation.

In order to achieve this ambitious target, the government has introduced a number of policy and regulatory measures in the form of FAME – I and II schemes, production linked incentive schemes for automobile sector and advanced chemistry cell, vehicle scrappage policy, and EV policies released by various state governments. These measures provide various supply and demand side incentives to boost manufacturing and sale of EVs in India. India’s transition towards electric mobility is slowly but steadily gaining traction due to these policies.

Various stakeholders related to the EV ecosystem who are engaged in activities like manufacturing, assembling, repairing, refurbishing, recycling, scrappage, etc. have either started or are expected to start operations in India. It is only natural that their activities meant to support and promote electric mobility will also lead to pollution and other significant impacts on the natural environment.

Therefore, it becomes important for us to consider the implications of these activities on environment well in advance to ensure that we move ahead with measured steps.

Separate categorisation of EV related activities

The setting up and operation of industrial units requires the project proponent to obtain environmental consents from the relevant state pollution control boards. Such consents typically require an industry to comply with the prescribed environmental standards for air, water, noise, various types of wastes etc. The Central Pollution Control Board (“CPCB”) has classified various activities into red, orange, green and white categories based on their pollution potential. While the red category includes the ones with maximum pollution potential, white includes the least polluting ones. Accordingly, most stringent consent conditions are prescribed for the red category industries and vice-versa.

Currently, CPCB has included “automobile manufacturing (integrated facilities)” in the red category and “automobile servicing, repairing, painting” in the orange category. A bare perusal of these two activities seem to include both internal combustion vehicles (“ICVs”) and EVs, despite both of them being automobiles of different types. The process of manufacturing, assembling, refurbishing, repairing, recycling or scrapping EVs and their components like batteries, motor, technologies, etc. is substantially different from that of an ICV. Studies indicate that manufacturing an EVs may emit more pollution than manufacturing an ICV, with the battery manufacturing process currently being the most polluting activity as per few studies.

To account for these practical differences and dispel unnecessary fears regarding their impact on environment, CPCB should consider undertaking a detailed study to include activities like manufacturing, assembling, repairing, refurbishing, recycling, scrappage, etc. related to EVs in separate categories based on their respective pollution potential. This exercise will not only ensure that appropriate conditions based on their pollution potential are prescribed in the environmental consents issued for such EV-related activities but it will also provide an impetus to the EV ecosystem providing it a separate identity when compared to ICVs.

Waste management from EVs

EVs, like other vehicles, are bound to generate waste at the end of their lifespan. The E-Waste (Management) Rules, 2016 and Batteries (Management and Handling) Rules, 2001 deal with such wastes to a limited extent. Therefore, there is a need for specific laws to deal with the wastes that would be generated from EVs at the end of their lifespan, especially the lithium-ion batteries that are being prominently utilised in EVs. The batteries waste rules define ‘batteries’ as lead-acid batteries thus excluding other types of batteries like nickel-cadmium, nickel metal hydride, lithium ion batteries, etc. from its scope. The need for inclusion of other types of batteries in these rules has also been acknowledged by CPCB in its review report on implementation of these rules, released in 2016.

Government of India had announced its plan to frame policy for recycling of lithium-ion batteries. This was followed by the release of Draft Battery Waste Management Rules, 2020. These rules proposed to manage various types of used batteries and provided a detailed mechanism for collection of such used batteries. However, this draft is yet to be finalised.

Impact of growing EV market

According to certain studies, batteries for EVs are expected to account for an 80% market share in the lithium-ion battery market by 2030 as compared to 35% share at present. As per estimates, the recycling market for these batteries in India is expected to increase from 2.9 GWh in 2018 to about 800 GWh by 2030, which presents a USD 1,000 million business opportunity by 2030. These numbers will only increase with policy measures nudging faster transition to EVs.

The failure to collect, reuse, recycle or manage such huge amount of EV batteries will have serious environmental implications and will also result in loss of precious metals present therein. The recycling of these batteries is technologically possible and extracted resources are valuable due to their further usage. This also provides an opportunity to create a circular economy. Certain major EV manufacturers and other entities have announced their plans for recycling of EV batteries.

Therefore, it is crucial that India revisits its environmental regulatory framework to support its ambition of becoming an EV manufacturing hub. Although recycling or refurbishment of EVs and its components, especially batteries, may not be required in the short-term, we will need such a framework within a decade when EVs become more visible on Indian roads. Considering India’s experience with waste management in the past, this is not an unusually long period.

Authors: Nawneet Vibhaw is a Partner and Himanshu Pabreja is an Associate in the Environmental Law practice at Shardul Amarchand Mangaldas & Co.

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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