Government mulls making Scrap Recycling an Organized Sector

Institution of BIS quality standards and SOPs to help reduce dependence on sub-standard scrap imports.

The Ministry of Mines has recently issued the National Non-Ferrous Metal Scrap Recycling Framework, 2020 covering key non-ferrous metals like Aluminium, Copper, Zinc, and Lead. The framework has been released with an objective to promote a formal and well-organized recycling ecosystem in the country which is currently highly unorganized with heavy dependence on imported scrap. Also, it aims to produce high-quality scrap for quality secondary production thus minimizing the dependence on imports and encourage economic wealth creation, job creation, and increased contribution to GDP through metal recycling.

This framework is also seen to be prepared in the backdrop of the upcoming Vehicle Scrappage Policy for automobiles, which will ensure sufficient availability of domestic scrap in the country. One of the key recommendations is setting up a central authority for recycling metals as the Metal Recycling Authority (MRA). It strongly recommends establishing BIS standards for Quality of scrap used for recycling and recycled products, and standard procedures for recycling and processing of scrap in consonance with MoEFCC rules/guidelines for environmental protection.

These recommendations will strengthen efforts of the domestic Aluminium industry demanding formulation of standards for Scrap in the country. The formulation of BIS Standards for Scrap usage, recycling & imports will be the first step to develop the domestic recycling ecosystem and promote a circular economy by utilization of indigenous scrap thereby reducing dependency on imports. Unfortunately, India today does not have an adequate institutional mechanism for proper collection, sorting, and processing of domestic or imported scrap. There are no BIS/quality standards in place for Scrap and the final recycled products.

As per industry sources, the domestic Aluminium industry is facing severe threats from increasing scrap imports, whose share in total Aluminium imports increased from 52% in FY-16 to 67% in FY-21, resulting in a Forex outgo- of USD 2 billion (Rs 14,000 Crore). India has become a scrap dumping ground due to the US-China trade war and various Chinese measures to restrict Scrap imports through its National Sword Policy. This has diverted the entire global scrap chain towards India as the USA dumps huge scrap volume to India resulting in a 327% rise in scrap imports from the USA in the last 5 years, given the stringent standards for scraps followed by the EU and other developed countries.

The framework also focuses to extend necessary support to promote Research and Development (R&D) in Metal scrap recycling while adopting data-based analysis and policy-making at all stages of the recycling chain. It highlights the promotion of 6Rs namely, the principles of Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture through scientific handling, processing, and disposal of all types of non-ferrous scrap, through authorized centers. Also, importance has been given for creating public awareness about benefits of efficient scrap collection, segregation and recycling with Quality certification mechanism for recycled secondary metal and a ‘recycled’ logo may be put on all recycled products to highlight circular economy.

The structured plan defines roles and responsibilities with clear timelines for various stakeholders including the Government, Recycling Authority, Public, Manufacturers, Dismantling & Processing Centers to achieve the goal of making an organized recycling industry in the country over the next three years. This includes the setting up of Metal Recycling Authority by Q1-FY 22, formulation of Quality Standards, certification, process standards for recycling by Q2/Q3 of FY 22. The action plans in FY 2022-23 will be focused on regulating the scrap collection, segregation, and dismantling units with a proper framework for registration, review mechanism, data collection and reporting mechanism for registered recycling units, ranking and performance evaluation of recycling units, and development of specified metal recycling zones and urban mining facilities.

Expediting all these action plans will be the key to the success of the Indian Recycling industry to encourage efficient utilization and recycling of indigenous scrap and boost a domestic circular economy. This will create significant opportunities for revenue generation, creation of jobs, and MSMEs and encourage domestic value addition in the country in line with a greater vision to make an AatmaNirbhar Bharat.

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