Page 4 - Policy Brief on Designing a Business Model for Sustainable Management of End-of-Life Vehicles (ELVs) in India
P. 4
TERI Policy Brief
economically viable. However there is a need to prevent regulate the sector. These guidelines advocate disposing
wastage of resources such as glass, brakeoil, coolant, of ELVs in an environmentally friendly manner and
etc. These are simply discarded as they fetch marginal or recommend a system of “shared responsibility” involving
no value, and there are hardly any storage systems all stakeholders—the government, manufacturers,
available currently. recyclers, dealers, insurers, and consumers. Further,
the Government of India under the Ministry of Road
There is also no depollution procedure being followed Transport and Highways is currently drafting a new
in most of these informal scrap yards, and the hazardous scrapping policy or end-of-life policy which is expected
fluids from the ELVs are spilled and disposed of on the to provide incentives to the owner of the vehicle for
ground where the ELVs are handled. In such units, the surrendering an old polluting vehicle and open new
whole area is often contaminated with oil, coolants, and avenues for scrap recycling in India.
other fluids. Toxic gases such as AC gas are released into
the air generating several environmental hazards and Learning from across the World
occupational safety hazards. AIS 129 tries to address
some of these concerns and specifically provides a list of The European Union (EU), Japan, Korea, and Taiwan
materials that should not be used in vehicles. It also lays present examples of countries that have a product-
down the type of information that vehicle manufacturers oriented legislation to control the recovery of ELVs.
should make available to the dismantling centres; sets These countries have recognized that a distinct ELV
targets for the minimum reuse and recycling or reuse law is necessary within the framework of the extended
and recovery rates of vehicles; and makes provisions producer responsibility (EPR) framework and have
for the type of vehicles with regard to their reusability, reported success in controlling the number of ELVs off
recyclability, and recoverability. But in the overall picture the road. Also, with the evolving global environmental
of ELV management, these standards could be revised awareness, shrinkage in the availability of landfill areas,
to integrate the concept of circularity and ‘closing the and depletion of natural resources, these countries have
loop’ aspects of sustainability. What is required is the designed strategies towards product recovery. With the
development of the AIS 129 standards into a regulatory help of present learning and experiences from these
framework in order to ensure compliance by the countries, inputs can be collated to design the recovery
informal sector, where much of the recycling is done. and sustainable management of end-of-life vehicles for
India. Table 2 presents a compilation of these.
Other challenges within the existing system of
ELV management include high-investment costs for Sustainable ELV Recovery and Management
establishing a reverse-logistics network, costs related System/Business Model: A Proposed
to quality-assurance test equipment, and costs linked Framework
to complicated dismantling as originally, the product
was not designed to be disassembled easily for reuse, Based on the discussion in the previous sections, the
remanufacturing, or recycling. These challenges can authors propose a framework for sustainable ELV
cause businesses invested in reuse, remanufacturing, recovery and management system/business model that
and recycling of ELVs to fail. can help implement the CPCB guidelines and is based on
the shared responsibility approach that is suggested in
Moreover, issues over the lack of standard operating these guidelines. This system, in addition to preserving the
procedures, ambiguity in deregistration of vehicles, and environment, focuses on the stakeholder’s engagement
poorly informed consumer practices prevent effective required in generating economic profitability and social
and sustainable ELV management. While some aspects benefits. Before we move to discussing the proposed
of ELV recycling are addressed by vehicular policy, system, it is important to highlight the importance of
environmental policy, as well as the different wastes the 6R focus (reduce, remanufacture, reuse, recover,
management rules in the country, other aspects have not recycle, and redesign) in the life cycle design concept
yet been covered by any of these existing legislations. which forms the basis of the proposed framework.
Recently, the Central Pollution Control Board (CPCB) of
India has come out with “Guidelines for Environmentally
Sound Management (ESM) of ELVs9” with an objective to
9 http://cpcb.nic.in/Final_Report_on_ELV_Guidelines_December_2016.pdf, last retrieved on
March 17, 2017
4 MARCH 2017
economically viable. However there is a need to prevent regulate the sector. These guidelines advocate disposing
wastage of resources such as glass, brakeoil, coolant, of ELVs in an environmentally friendly manner and
etc. These are simply discarded as they fetch marginal or recommend a system of “shared responsibility” involving
no value, and there are hardly any storage systems all stakeholders—the government, manufacturers,
available currently. recyclers, dealers, insurers, and consumers. Further,
the Government of India under the Ministry of Road
There is also no depollution procedure being followed Transport and Highways is currently drafting a new
in most of these informal scrap yards, and the hazardous scrapping policy or end-of-life policy which is expected
fluids from the ELVs are spilled and disposed of on the to provide incentives to the owner of the vehicle for
ground where the ELVs are handled. In such units, the surrendering an old polluting vehicle and open new
whole area is often contaminated with oil, coolants, and avenues for scrap recycling in India.
other fluids. Toxic gases such as AC gas are released into
the air generating several environmental hazards and Learning from across the World
occupational safety hazards. AIS 129 tries to address
some of these concerns and specifically provides a list of The European Union (EU), Japan, Korea, and Taiwan
materials that should not be used in vehicles. It also lays present examples of countries that have a product-
down the type of information that vehicle manufacturers oriented legislation to control the recovery of ELVs.
should make available to the dismantling centres; sets These countries have recognized that a distinct ELV
targets for the minimum reuse and recycling or reuse law is necessary within the framework of the extended
and recovery rates of vehicles; and makes provisions producer responsibility (EPR) framework and have
for the type of vehicles with regard to their reusability, reported success in controlling the number of ELVs off
recyclability, and recoverability. But in the overall picture the road. Also, with the evolving global environmental
of ELV management, these standards could be revised awareness, shrinkage in the availability of landfill areas,
to integrate the concept of circularity and ‘closing the and depletion of natural resources, these countries have
loop’ aspects of sustainability. What is required is the designed strategies towards product recovery. With the
development of the AIS 129 standards into a regulatory help of present learning and experiences from these
framework in order to ensure compliance by the countries, inputs can be collated to design the recovery
informal sector, where much of the recycling is done. and sustainable management of end-of-life vehicles for
India. Table 2 presents a compilation of these.
Other challenges within the existing system of
ELV management include high-investment costs for Sustainable ELV Recovery and Management
establishing a reverse-logistics network, costs related System/Business Model: A Proposed
to quality-assurance test equipment, and costs linked Framework
to complicated dismantling as originally, the product
was not designed to be disassembled easily for reuse, Based on the discussion in the previous sections, the
remanufacturing, or recycling. These challenges can authors propose a framework for sustainable ELV
cause businesses invested in reuse, remanufacturing, recovery and management system/business model that
and recycling of ELVs to fail. can help implement the CPCB guidelines and is based on
the shared responsibility approach that is suggested in
Moreover, issues over the lack of standard operating these guidelines. This system, in addition to preserving the
procedures, ambiguity in deregistration of vehicles, and environment, focuses on the stakeholder’s engagement
poorly informed consumer practices prevent effective required in generating economic profitability and social
and sustainable ELV management. While some aspects benefits. Before we move to discussing the proposed
of ELV recycling are addressed by vehicular policy, system, it is important to highlight the importance of
environmental policy, as well as the different wastes the 6R focus (reduce, remanufacture, reuse, recover,
management rules in the country, other aspects have not recycle, and redesign) in the life cycle design concept
yet been covered by any of these existing legislations. which forms the basis of the proposed framework.
Recently, the Central Pollution Control Board (CPCB) of
India has come out with “Guidelines for Environmentally
Sound Management (ESM) of ELVs9” with an objective to
9 http://cpcb.nic.in/Final_Report_on_ELV_Guidelines_December_2016.pdf, last retrieved on
March 17, 2017
4 MARCH 2017
