Page 1 - Policy Brief on Designing a Business Model for Sustainable Management of End-of-Life Vehicles (ELVs) in India
P. 1
POLICY BRIEFT E R I P o l i c y B r i e f March 2017
The Energy and Resources Institute
Designing a Business Model
for Sustainable Management
of End-of-Life Vehicles
(ELVs) in India
CONTENTS Abstract
Abstract Over the last decade, India has been experiencing one of the highest
Background motorization growth rates in the world. By 2015, there were over 200
Existing System of ELV Recovery and million motorized vehicles registered (SIAM, 2015). A vehicle’s average life is
considered to be between 10 to 15 years, after which it is expected to enter
Sustainable Management the retired/end-of-life (ELV) phase. Estimates for India suggest that more
Learning from across the World than 8.7 million vehicles have reached the end-of-life phase by 2015, and
Sustainable ELV Recovery and this number is expected to rise to 21 million in 2025 (Akolkar et al. 2015).1
When a life cycle assessment to gauge the environmental impact of a vehicle
Management System/Business Model: is done, there is attribution of impact to all stages of the life cycle. There is
A Proposed Framework impact during the extraction of the raw material, in the use of energy during
Conclusion the assembly phase, in the transportation of the manufactured vehicles
to the customers, during the use phase of the vehicle, and finally at the
Authors disposal stage (ELV management),2 ELVs can also be an important source
Nitish Arora, TERI of secondary raw materials, such as metal and other materials, which if
Shilpi Kapur Bakshi, TERI salvaged and/or reused/recycled, can be again fed into the economy thereby
Souvik Bhattarcharjya, TERI helping to close the loop of sustainable resource circulation and reducing the
Advisor demand for virgin raw materials. Estimates suggest that steel scrap worth
S Vijay Kumar, TERI INR 115 billion can be generated in India from retired vehicles.3
The Energy and Resources Institute In this policy brief, we first discuss the existing system for recovery and
Darbari Seth Block, IHC Complex, management of ELVs, highlighting the challenges associated with the same.
Lodhi Road, New Delhi- 110 003 We then suggest measures to build on the existing system to address these
Tel. 2468 2100 or 4150 4900 challenges and propose a framework/business model for sustainable end-
Fax. 2468 2144 or 2468 2145 of-life vehicle recovery and management system. This model will not only
India +91 Delhi (0) 11 suggest ways for collection and management of the ELVs, but also outline
ways to obtain maximum economic benefits from their recovery, creating
www.teriin.org social values and preventing environmental degradation along with fulfilling
the relevant legislations.
1 Akolkar, AB, Mita Sharma, Meetu Puri, Bharati Chaturvedi, Gautam Mehra, Supriya Bhardwaj, Dieter Mutz, Rachna Arora, and
Manjeet Singh Saluja 2015: “The Story of Dying Car in India”. Part II. Report prepared on behalf of GIZ, CPCB, and Chintan.
New Delhi: CPCB.
2 Estimates point out that if older trucks and buses are scrapped it would result in a 17 % reduction in CofOR2oeadmTisrsainosnpso, r1t8an%d
reduction in Hydrocarbon and Nitrogen Oxides emissions, and 24% reduction in PM emissions. (Ministry
Highways, Government of India).
3 http://economictimes.indiatimes.com/news/economy/policy/vehicle-policy-to-generate-steel-scrap-worth-rs-11000-crore-per-
annum/articleshow/52598995.cms, last retrieved on March 17, 2017.
The Energy and Resources Institute
Designing a Business Model
for Sustainable Management
of End-of-Life Vehicles
(ELVs) in India
CONTENTS Abstract
Abstract Over the last decade, India has been experiencing one of the highest
Background motorization growth rates in the world. By 2015, there were over 200
Existing System of ELV Recovery and million motorized vehicles registered (SIAM, 2015). A vehicle’s average life is
considered to be between 10 to 15 years, after which it is expected to enter
Sustainable Management the retired/end-of-life (ELV) phase. Estimates for India suggest that more
Learning from across the World than 8.7 million vehicles have reached the end-of-life phase by 2015, and
Sustainable ELV Recovery and this number is expected to rise to 21 million in 2025 (Akolkar et al. 2015).1
When a life cycle assessment to gauge the environmental impact of a vehicle
Management System/Business Model: is done, there is attribution of impact to all stages of the life cycle. There is
A Proposed Framework impact during the extraction of the raw material, in the use of energy during
Conclusion the assembly phase, in the transportation of the manufactured vehicles
to the customers, during the use phase of the vehicle, and finally at the
Authors disposal stage (ELV management),2 ELVs can also be an important source
Nitish Arora, TERI of secondary raw materials, such as metal and other materials, which if
Shilpi Kapur Bakshi, TERI salvaged and/or reused/recycled, can be again fed into the economy thereby
Souvik Bhattarcharjya, TERI helping to close the loop of sustainable resource circulation and reducing the
Advisor demand for virgin raw materials. Estimates suggest that steel scrap worth
S Vijay Kumar, TERI INR 115 billion can be generated in India from retired vehicles.3
The Energy and Resources Institute In this policy brief, we first discuss the existing system for recovery and
Darbari Seth Block, IHC Complex, management of ELVs, highlighting the challenges associated with the same.
Lodhi Road, New Delhi- 110 003 We then suggest measures to build on the existing system to address these
Tel. 2468 2100 or 4150 4900 challenges and propose a framework/business model for sustainable end-
Fax. 2468 2144 or 2468 2145 of-life vehicle recovery and management system. This model will not only
India +91 Delhi (0) 11 suggest ways for collection and management of the ELVs, but also outline
ways to obtain maximum economic benefits from their recovery, creating
www.teriin.org social values and preventing environmental degradation along with fulfilling
the relevant legislations.
1 Akolkar, AB, Mita Sharma, Meetu Puri, Bharati Chaturvedi, Gautam Mehra, Supriya Bhardwaj, Dieter Mutz, Rachna Arora, and
Manjeet Singh Saluja 2015: “The Story of Dying Car in India”. Part II. Report prepared on behalf of GIZ, CPCB, and Chintan.
New Delhi: CPCB.
2 Estimates point out that if older trucks and buses are scrapped it would result in a 17 % reduction in CofOR2oeadmTisrsainosnpso, r1t8an%d
reduction in Hydrocarbon and Nitrogen Oxides emissions, and 24% reduction in PM emissions. (Ministry
Highways, Government of India).
3 http://economictimes.indiatimes.com/news/economy/policy/vehicle-policy-to-generate-steel-scrap-worth-rs-11000-crore-per-
annum/articleshow/52598995.cms, last retrieved on March 17, 2017.
