What is the vehicle scrappage policy?

Urbanization, economic growth, climate change, shifting consumers and technology – are the five drivers shaping the future of mobility.

In July 2019, the Central government had proposed amendments to the motor vehicle rules to allow scrapping of vehicles older than 15 years. Further, in a draft notification, the government proposed renewing fitness certificates for vehicles older than 15 years every six months instead of the current one year. Under this policy’s norms, owners with a commercial vehicle older than 15 years and private vehicle owners with vehicles older than 20 years, could be considered for scrapping their old vehicles.

The What:

  • Old and Polluting cars to be sent to scrapyards
  • Owners of such vehicles to be compensated based on certain conditions
  • Compensation amount may be equal or more to the resale value of such vehicles

The Why:

  • Taking old and polluting vehicles off roads can help environment
  • Many parts of the old vehicles can be recycled
  • Parts which cannot be recycled needs to be disposed in an environment friendly manner
  • Can create boost in demand for new vehicles

The Concerns:

  • Who will bear the cost of compensation?
  • Which vehicles would be eligible

Ministry of Road Transport and Highways (MoRTH) has formulated a note for Cabinet on the creation of an ecosystem for voluntary and environment-friendly phasing out of unfit and old polluting vehicles. The auto industry has agreed to a proposal by the Centre to offer a 1% discount on buying new vehicles if, correspondingly, an old one is junked. Apart from the discount, the Centre is also planning to exempt new vehicles from registration fees and road tax if the owner scraps an old one.

Valuation Of Old Cars:

  • If the car is not in working condition you are likely to get the rate per kilogram of the metal parts. The current rate is an average of Rs.15 per kg for metal parts.
  • If the car is in good working condition, the scrap dealer will sell the spare parts of the vehicle. Only the metallic body of the car will be scrapped. The scrap dealer is likely to get a good profit on the sale of the spare parts, so the car owner can request a higher lump sum amount at the time of scrapping.

RTO Rules For Scrapping And Deregistration Of Vehicles:

  • The car owner will first have to write a letter to the authorized RTO about the car scrapping.
  • He/she will have to surrender the original RC of the car along with the chassis number that was cut out from the vehicle at the time of scrapping. This will be kept at the RTO as part of the historical records.
  • The scrap dealer’s confirmation on letterhead with the complete address is also required. The pictures of the scrap can be submitted at this time.
  • The vehicle owner should also submit an affidavit with the application for scrap and de-registration. The affidavit will mention that the car is not under any loan, insurance claims, or pending court cases. The affidavit will also confirm that the vehicle is not involved in thefts.

What Happens To The Registration Number Of The Scrapped Car?

  • When the RTO completes its car scrapping formalities, the registration number of the vehicle is free for use by someone else. Hence, it is possible for a new car to get the registration number of an old car that has been scrapped.
  • The insurance company should also be informed about the car scrapping.

The concerning points

The following concerning points are an extract from the Centre for Science and Environment (CSE) report, which is titled â€˜What to do with old vehicles: Towards effective scrappage policy and infrastructure.

Number of Old vehicles

It is difficult to arrive at definitive numbers for older and end-of-life vehicles, as the vehicle registration database in India is cumulative and not corrected for retirement and scrappage. The VAHAN database under the Union Ministry of Road Transport and Highways (MoRTH)that records real-time data, is an opportunity to clean up the database nation-wide — if all RTOs across the country clean up their respective databases and link up with VAHAN effectively.

A CPCB-GIZ study of 2016 estimates that as of 2015, there were more than 87 lakh end-of-life vehicles and this would increase to 2.18 crore by 2025. Fortunately, India is not an importer of used vehicles, as local laws do not permit any vehicle that does not comply with the local standards. This has dampened the interest in global trade in used vehicles. But vehicles in the domestic market change several hands and are used more intensely

Age profile of the vehicles in India

In the absence of reliable estimates, several studies have relied on parking lot surveys and fuel retail outlet surveys to assess the age profile of vehicles in different cities. The CPCB carried out such surveys in 2015 in six cities and found that 13 percent of trucks, 8 percent of buses, 5 percent of three-wheelers, 3 percent of cars, and 7 percent of two-wheelers were above the 15-year age limit. Moreover, if a broad retirement curve of 20 years for vehicles is considered, then — as of 2018 — about 69 percent of the total registered vehicles are expected to have survived. The growing fleet of obsolete vehicles poses serious threats to the environment and public health. Cities are already facing problems due to old, junk, and abandoned vehicles

Pollution contribution from old vehicles

Even though the older legacy vehicles are smaller in numbers, their contribution to the pollution load from vehicles can be disproportionately high. In its consultation note of 2018, the MoRTH had mentioned that although commercial vehicles (such as trucks and buses, taxies and three-wheelers, etc) constitute only about 5 percent of the total fleet, they contribute nearly 65-70 percent of the vehicular pollution.

Of these, the older commercial vehicles, typically manufactured before 2000, account for 15 percent of the total vehicular pollution as these pollute 10-25 times more than a modern vehicle.

Another 2013 study from the International Council on Clean Transportation estimates that in 2011, pre-2003 vehicles were about 23 percent of the fleet but were responsible for about half of the particulate emissions from vehicles. IIT Bombay’s multi-city study in 2014 estimated that pre-2005 vehicles were responsible for 70 percent of the total pollution load from vehicles. In fact, old heavy-duty vehicles have a higher impact in smaller cities and towns, and the contribution of old diesel cars and two-wheelers can vary between 8-23 percent across cities.

Fleet renewal of heavy-duty vehicles based on BSVI emissions standards can give significant benefits. For example, an old BS-I heavy-duty diesel vehicle is designed to emit 35 times higher particulate matter compared to a BSVI vehicle. As cities begin to take stronger action on old and junk vehicles, these will begin to crowd in other areas and transfer pollution. This program, therefore, requires a national framework. 

What else can be proposed in the policy?

As stated, India will have a monumental load of over two crore old vehicles nearing the end of their lives by 2025. These, along with other unfit vehicles, will cause huge pollution and environmental damage.

In India, car scrapping is not an organized activity like the sale of used cars. Recently, there was a National Green Tribunal order that banned the use of cars that are older than 15 years in Delhi. The Regional Transport Offices (RTOs) have stopped re-registering these vehicles and checking their fitness. Until now, there has not been any uniform policy for old vehicles. The impact of the National Green Tribunal order may be detrimental to car owners, as they may not be aware of the formalities of dealing with an aged vehicle. When it becomes illegal to operate such a car on Indian roads, what could they possibly do with it?

There have been policy initiatives taken in different context. For example, Delhi now has banned 10-year-old diesel vehicles and 15-year-old petrol vehicles. Kolkata has phased out 15-year-old vehicles. Several clean air action plans for non-attainment cities under the National Clean Air Programme (NCAP) have included old vehicle phase-out provisions. Currently, Section 59 of the amended Central Motor Vehicle Act of 2019 provides for fixing of age and restrictions on the plying of unfit vehicles. But this does not specify the criteria for defining end-of-life vehicles yet. On the other hand, the CPCB has taken the step to frame the ‘Guidelines on Environmentally Sound Facilities for Handling Processing and Recycling ELVs, 2019’ to minimise environmental hazards from the disposal of old vehicles. The notification of the Draft Vehicle Fleet ModernisationProgrammeis awaited. 

These need to be enforceable to scale up scrappage infrastructure across the country. At the state level, Government of Delhi has notified its own scrappage policy in 2018 to enable setting up of proper scrapping infrastructure and compliance with the CPCB guidelines to facilitate the process of phasing out 10-year-old diesel vehicles and 15-year-old petrol vehicles. This process has started, but will have to be ramped up. This will also require action to integrate informal scrappers and dismantlers with adequate state support to set up common infrastructure for waste processing and treatment. 

In a nutshell following are the key action points which can be adopted in various context:

  • Clean up the vehicle database for an accurate estimate of end-of-life vehicles.
  • Leverage opportunities to maximize emissions gains from the replacement of end-of-life vehicles and recover material from the wasted clunkers for reuse and recycling
  • Need state-level scrappage policies synced with the national policy objectives for the automobile industry to set clear milestones for scrappage infrastructure.
  • Environmentally sound vehicle scrappage infrastructure should be scaled up country-wide for safe disposal of waste.
  • For fiscal stimulus package, prioritize replacement of heavy-duty diesel vehicles with BSVI vehicles
  • If cars and two-wheelers are included in the stimulus scheme, link scrappage incentive more explicitly with electric vehicles to enable 30-40 percent electrification by 2030. Delhi is a good example to study.
  • Lay down criteria for selection of ELVs and unfit vehicles for a national program.
  • Leverage vehicle inspection and certification (I/C)centers and remote sensing monitoring to screen grossly polluting vehicles.
  • Adopt other strategies to discourage old and polluting vehicles (such as stronger on-road emissions inspection, low emissions zones, tax measures, etc.)

PPIN Staff

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