Page 7 - Policy Brief on Designing a Business Model for Sustainable Management of End-of-Life Vehicles (ELVs) in India
P. 7
TERI Policy Brief
Manufacturer Responsibility: During the Design cost could be recovered in full or piecemeal from the
Stage owner of the vehicle. However stakeholders could
be consulted to arrive at the exact percentage of
The increasing change in materials composition the price of the vehicle which could be charged
(for example, the increase in the fraction of plastic as the ARF.
and aluminium) of modern vehicles can create new
problems in ELV management. Recycling plastic is very Dealers’ Responsibility
difficult when it is present in small parts or is attached
to another material. Similarly, recycling aluminium is not Franchised dealers serve as an important channel linking
straightforward due to its presence mostly in the form the manufacturer and the buyer of the vehicle They have
of alloys. It is also important to note that the technique significant potential in encouraging the sourcing back
of disassembly and recycling will vary across materials. of the ELVs and this is the stage at which they can be
Thus the choice of material is one of the key elements specifically encouraged to exercise their responsibility
in designing vehicles and will play an important role for for ELV management.
sustainable management of ELVs. The main responsibility
of the manufacturer during the design stage would include: 1. These dealers could serve an additional function as
accredited units that are authorized to collect and
1. Design for disassembly; recycle vehicles.
2. Adopt material substitution and increase the usage of 2. During the sale of a new vehicle, include a guidance
less-toxic metals; document in the vehicle kit that elaborates on the
need for ELV management and ways in which the
3. Identify materials using standard labeling systems; owner/buyer of the automobile could act responsibly
manufacturers and importers of cars should label when their vehicle reaches its end of life.
parts and provide manuals for disassembly to auto
recyclers; 3. Collect the ELV cess which is levied on the owner
and has to be paid upfront at the time of purchase.
4. Have a design for vehicles which is receptive to using The dealer will also have to deposit the cess collected
recycled/secondary raw material which also reduces into the ELV fund. This cess will later be refunded to
chances of downcycling. Specifically, the design could the owner when he takes his ELV for deregistration.
be based on end-of-life criteria while taking into
account the age of the vehicle, emission norms, and 4. Enter into an agreement with the owner of the ELV
technology status. In the process, the manufacturer who is exchanging his ELV for the new vehicle whereby
could try getting a competitive advantage by working the dealer promises to handover the “Certificate of
towards a design that not only optimizes on using Destruction” and/or “Certificate of Deregistration”
resources and recoverability of resources at the end to the owner on a postdated basis. Also, dealers
of life, but also that extends the life of the vehicle, may retain a part of the ELV cess as payment for
thereby delaying its redundancy and death. deregistration on behalf of the last owner.
Manufacturer Responsibility: At the time of sale 5. Enter into tie-ups with tow truck operators and offer
fee-based services to do an immediate10 transfer of
Pay a transparent Advance Recycling Fee (ARF) to the the ELVs that they have received (in exchange for
ELV fund wherein the fee can be designed within the sale of their new vehicles) to the Regional Transport
framework of the following factors: Offices (RTO) or to any authorized treatment facility,
whichever is convenient.
1. Linked to the rating achieved by the vehicle with
respect to the index/label for the recovery and Last Owner’s Responsibility
recyclability of resources at the end of the vehicle’s
life and as per the vehicle’s class. The last car owners (i.e., users) are the starting point
of the ELV chain and should have the responsibility to
2. Should cover part (say about 50%) of the rough ensure that the vehicle gets deregistered. The various
estimated ELV management cost (excluding the channels that could be explored for this are:
transportation cost of bringing the vehicle from the
last user to the dismantling centre). The rest of the 10 Since dealers mostly do not have much space nor do they have the required staff to deal with
ELVs at their premises, it is important that the transfer from their premises is immediate.
Moreover, most dealers also operate from their showrooms located in the heart of the city.
MARCH 2017 7
Manufacturer Responsibility: During the Design cost could be recovered in full or piecemeal from the
Stage owner of the vehicle. However stakeholders could
be consulted to arrive at the exact percentage of
The increasing change in materials composition the price of the vehicle which could be charged
(for example, the increase in the fraction of plastic as the ARF.
and aluminium) of modern vehicles can create new
problems in ELV management. Recycling plastic is very Dealers’ Responsibility
difficult when it is present in small parts or is attached
to another material. Similarly, recycling aluminium is not Franchised dealers serve as an important channel linking
straightforward due to its presence mostly in the form the manufacturer and the buyer of the vehicle They have
of alloys. It is also important to note that the technique significant potential in encouraging the sourcing back
of disassembly and recycling will vary across materials. of the ELVs and this is the stage at which they can be
Thus the choice of material is one of the key elements specifically encouraged to exercise their responsibility
in designing vehicles and will play an important role for for ELV management.
sustainable management of ELVs. The main responsibility
of the manufacturer during the design stage would include: 1. These dealers could serve an additional function as
accredited units that are authorized to collect and
1. Design for disassembly; recycle vehicles.
2. Adopt material substitution and increase the usage of 2. During the sale of a new vehicle, include a guidance
less-toxic metals; document in the vehicle kit that elaborates on the
need for ELV management and ways in which the
3. Identify materials using standard labeling systems; owner/buyer of the automobile could act responsibly
manufacturers and importers of cars should label when their vehicle reaches its end of life.
parts and provide manuals for disassembly to auto
recyclers; 3. Collect the ELV cess which is levied on the owner
and has to be paid upfront at the time of purchase.
4. Have a design for vehicles which is receptive to using The dealer will also have to deposit the cess collected
recycled/secondary raw material which also reduces into the ELV fund. This cess will later be refunded to
chances of downcycling. Specifically, the design could the owner when he takes his ELV for deregistration.
be based on end-of-life criteria while taking into
account the age of the vehicle, emission norms, and 4. Enter into an agreement with the owner of the ELV
technology status. In the process, the manufacturer who is exchanging his ELV for the new vehicle whereby
could try getting a competitive advantage by working the dealer promises to handover the “Certificate of
towards a design that not only optimizes on using Destruction” and/or “Certificate of Deregistration”
resources and recoverability of resources at the end to the owner on a postdated basis. Also, dealers
of life, but also that extends the life of the vehicle, may retain a part of the ELV cess as payment for
thereby delaying its redundancy and death. deregistration on behalf of the last owner.
Manufacturer Responsibility: At the time of sale 5. Enter into tie-ups with tow truck operators and offer
fee-based services to do an immediate10 transfer of
Pay a transparent Advance Recycling Fee (ARF) to the the ELVs that they have received (in exchange for
ELV fund wherein the fee can be designed within the sale of their new vehicles) to the Regional Transport
framework of the following factors: Offices (RTO) or to any authorized treatment facility,
whichever is convenient.
1. Linked to the rating achieved by the vehicle with
respect to the index/label for the recovery and Last Owner’s Responsibility
recyclability of resources at the end of the vehicle’s
life and as per the vehicle’s class. The last car owners (i.e., users) are the starting point
of the ELV chain and should have the responsibility to
2. Should cover part (say about 50%) of the rough ensure that the vehicle gets deregistered. The various
estimated ELV management cost (excluding the channels that could be explored for this are:
transportation cost of bringing the vehicle from the
last user to the dismantling centre). The rest of the 10 Since dealers mostly do not have much space nor do they have the required staff to deal with
ELVs at their premises, it is important that the transfer from their premises is immediate.
Moreover, most dealers also operate from their showrooms located in the heart of the city.
MARCH 2017 7
