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Recently, Union Ministry of Road Transport and Highways (MoRTH) launched the Voluntary Vehicle Modernization Program or Vehicle Scrapping Policy.

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• Program aims to create an ecosystem for phasing out unfit polluting vehicles across the country through a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs).
• Under this, multiple commercial and passenger vehicle manufacturers would offer discounts for a period of two years and one year respectively against a Scrappage Certificate.
• Previously, Union Government announced Vehicle Scrapping Policy in 2021 to gradually phase out the vehicles which are more than 15-20 years old to reduce air pollution, improve road safety, and boost vehicle sales. 

Key Highlights of the Voluntary Vehicle Modernization Program

• Circular Economy: It aims to create a circular economy in the automotive sector by promoting recycling and reducing raw material consumption.
• Vehicles that fail the fitness test will be scrapped, and owners will receive a Certificate of Deposit (Scrappage Certificate) as proof, which can be used to avail of discounts on purchasing new vehicles.
• Incentives for Scrapping:
  • Manufacturers have announced various incentives to encourage vehicle scrapping:
    • Commercial Vehicle Manufacturers offer discounts up to 3% of the ex-showroom price.
    • Passenger Vehicle Manufacturers offer discounts of 1.5% of the ex-showroom price.
  • These discounts are over and above the scrap value provided by RVSFs and government incentives like Motor Vehicle Tax concessions and waivers on registration fees.

Significance of Scrapping of Old Vehicles

• Environmental: Older vehicles typically have outdated technology and poor fuel efficiency, which leads to higher emissions of pollutants like carbon dioxide (CO₂), nitrogen oxides (NOx), and particulate matter (PM). 
  • Scrapping them reduces air pollution, helping to combat climate change and improve urban air quality.
• Economic: It will also encourage people to purchase new vehicles, thereby stimulating demand in the automobile industry.
• Circular economy: Scrapping of old vehicles allows for the recovery of valuable materials like steel, aluminum, copper, rubber, etc., reducing the need for mining and manufacturing raw materials.
• Road safety: Removing older vehicle, which lack modern safety features, from the roads increases the overall safety of transportation systems by reducing the likelihood of accidents caused by faulty vehicles.
• Regulatory compliance: By scrapping older vehicles, India’s vehicle fleet can better comply with the revised emission standards under the BS-VI norms.

Challenges for effective Vehicle scrapping in India

• Inadequate infrastructure: Absence of a well-established network of authorized recycling centers and dominance of unorganized sector, where scrapping is often carried out in environmentally unsafe conditions, leading to health hazards and improper waste management.
• Poor integration with circular economy: Absence of clear recycling supply chains where materials from scrapped vehicles are effectively recycled into the production of new vehicle and other goods result in inefficiencies and hinder effective price-realization.
• Awareness and participation: Many vehicle owners are unaware of the environmental and economic benefits of scrapping their old vehicles, sentimental attachment of owners to their old vehicles, etc., restricts voluntary vehicle scrapping.
• Economic constraints: Perceived low resale value of older vehicles and high cost of buying new, fuel-efficient vehicle become prohibitive without sufficient financial support.
• Weak enforcement: Inadequate checks and corruption at local levels often lead to fake certification for old vehicles, allowing them to bypass regulations and remain on the road.

Way Forward 

• Build scrapping infrastructure: Encourage PPP in setting up scrapping facilities, build an integrated supply chain for recycled materials from scrapped vehicles, etc.
• Simplified vehicle scrapping process: Enable scrapping centers to offer a one-stop service for vehicle owners, handling processes from deregistration of the vehicle to recycling the materials to reduce bureaucratic hurdles and makes the process more efficient.
• Strengthened enforcement: Implement regular and strict emission testing for older vehicles, centralized system for tracking vehicles that have exceeded their permissible age, etc.
  • Integrate management of Electric End-of-Life Vehicles (ELVs) and batteries from the outset to ensure sustainability, safety, and environmental responsibility.
• Public awareness: Collaborate with local communities, NGOs, and vehicle associations to spread awareness and facilitate the scrapping process.