Page 8 - Policy Brief on Designing a Business Model for Sustainable Management of End-of-Life Vehicles (ELVs) in India
P. 8
TERI Policy Brief
Surrendering the car at the RTO Note: The salvage price that is which is globally offered
to the owner to pay the cost of vehicle’s steel. For
The owner takes the ELV to the RTO (which later bringing about a behavioural change in Indian consumers,
sends the vehicle to an authorized treatment facility), a markup over the price of steel could be considered.
that is also authorized to act as a designated collection
point. The RTO then legally issues a “Certificate of The suggested additional responsibility of the RTO
Destruction” and/or “Certificate of Deregistration” with as a collector in our proposed framework (Figure 3) is a
all the paperwork related to the surrendering of the short-term measure that will help in giving impetus to the
car being completed on its premises. These collection whole process of formal ELV management by providing
points are at the customer front end and there would people with a convenient option to go to and surrender
be such multiple points in a metro city. their vehicles. But in the long run, as in most EU member
states, vehicle manufacturers and importers should be
Based on the rate list that is published by the RTO, the made responsible for setting-up national collection
owner gets paid a price for the ELV. This rate list could be networks for the collection of all ELVs.11 In collective
arrived at by consulting the vehicle manufacturers, and schemes, a Producer Responsibility Organization (PRO)
focusing on the revenue streams, and cost flows which could be set to implement the EPR principle on behalf
suit the target value of the recycling process. The rate of all adhering companies (the obligated industry). In
list should also have a differentiated element linked to the Indian context, manufacturers could exercise their
the condition of the cars and the extent of usable parts responsibility via dealers.
(that can be assessed after an inspection of the vehicle’s
physical condition). However, it is important to make a Figure 3: Proposed framework for Sustainable ELV Management
distinction here between the rate list for vehicles which
are already plying on roads (and do not have any advance
recycling fees deposited against them into the ELV
fund) and those which will be sold once this proposed
framework gets implemented (in which case, for all new
vehicles sold, there would be an advance recycling fees
collected at the time of sale of the vehicle, in part paid
by the manufacturer when he sells to the dealer and in
part paid by the buyer of the vehicle is purchased from
the dealer). This will be a way to exercise the shared
responsibility.
Surrendering the car at the dealer’s in exchange Source: Developed by the Authors
for a new car * Owner of vehicle reaching end of life.
** To continue in the short run.
The owner takes the ELV vehicle to the vehicle dealer
from whom he is buying a new vehicle and exchanges Some material could be used by auto component manufacturers, once they
his old vehicle for the new vehicle. The dealer promises start re-manufacturing.
to handover a “Certificate of Destruction” and/or a
“Certificate of Deregistration” to the owner on a postdated 11 Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52007SC1348, last
basis (since the dealer has to get the certificate issued retrieved on March 17, 2017
from the RTO or an authorized treatment facility after
surrendering the car there). For example, this certificate
can be handed over to the owner when he comes back to
the dealer for his first service. The salvage price of the ELV
is adjusted in the price of the new car which the owner
is buying in exchange of his ELV. The RTO then sends the
car to the authorized treatment facility.
8 MARCH 2017
Surrendering the car at the RTO Note: The salvage price that is which is globally offered
to the owner to pay the cost of vehicle’s steel. For
The owner takes the ELV to the RTO (which later bringing about a behavioural change in Indian consumers,
sends the vehicle to an authorized treatment facility), a markup over the price of steel could be considered.
that is also authorized to act as a designated collection
point. The RTO then legally issues a “Certificate of The suggested additional responsibility of the RTO
Destruction” and/or “Certificate of Deregistration” with as a collector in our proposed framework (Figure 3) is a
all the paperwork related to the surrendering of the short-term measure that will help in giving impetus to the
car being completed on its premises. These collection whole process of formal ELV management by providing
points are at the customer front end and there would people with a convenient option to go to and surrender
be such multiple points in a metro city. their vehicles. But in the long run, as in most EU member
states, vehicle manufacturers and importers should be
Based on the rate list that is published by the RTO, the made responsible for setting-up national collection
owner gets paid a price for the ELV. This rate list could be networks for the collection of all ELVs.11 In collective
arrived at by consulting the vehicle manufacturers, and schemes, a Producer Responsibility Organization (PRO)
focusing on the revenue streams, and cost flows which could be set to implement the EPR principle on behalf
suit the target value of the recycling process. The rate of all adhering companies (the obligated industry). In
list should also have a differentiated element linked to the Indian context, manufacturers could exercise their
the condition of the cars and the extent of usable parts responsibility via dealers.
(that can be assessed after an inspection of the vehicle’s
physical condition). However, it is important to make a Figure 3: Proposed framework for Sustainable ELV Management
distinction here between the rate list for vehicles which
are already plying on roads (and do not have any advance
recycling fees deposited against them into the ELV
fund) and those which will be sold once this proposed
framework gets implemented (in which case, for all new
vehicles sold, there would be an advance recycling fees
collected at the time of sale of the vehicle, in part paid
by the manufacturer when he sells to the dealer and in
part paid by the buyer of the vehicle is purchased from
the dealer). This will be a way to exercise the shared
responsibility.
Surrendering the car at the dealer’s in exchange Source: Developed by the Authors
for a new car * Owner of vehicle reaching end of life.
** To continue in the short run.
The owner takes the ELV vehicle to the vehicle dealer
from whom he is buying a new vehicle and exchanges Some material could be used by auto component manufacturers, once they
his old vehicle for the new vehicle. The dealer promises start re-manufacturing.
to handover a “Certificate of Destruction” and/or a
“Certificate of Deregistration” to the owner on a postdated 11 Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52007SC1348, last
basis (since the dealer has to get the certificate issued retrieved on March 17, 2017
from the RTO or an authorized treatment facility after
surrendering the car there). For example, this certificate
can be handed over to the owner when he comes back to
the dealer for his first service. The salvage price of the ELV
is adjusted in the price of the new car which the owner
is buying in exchange of his ELV. The RTO then sends the
car to the authorized treatment facility.
8 MARCH 2017
