It is anticipated that the government will compel automakers to recycle a predetermined quantity of steel from outdated cars, a measure that will encourage the supply of scrap and strengthen the steel circular economy.
Based on the proposed guidelines for Extended Producer Responsibility (EPR) for end-of-life cars, the Environment Ministry is anticipated to release regulations requiring automakers to recycle or recover a minimum of 8% of the steel used in vehicles that were sold in 2005–2006 by the year FY26.
Manufacturers increasing recycling would free up an extra 0.2-0.25 million tonnes (MT) of steel scrap. Even while this amount is little in comparison to the total amount of steel scrap consumed by steel mills, which is projected to be between 29 and 31 million tons for the fiscal year 2024, it would nevertheless be beneficial to the steel ecosystem as a whole and support the circular economy.
Steel producers think that increased scrap supply will help them as the industry attempts to lower its carbon footprint. India imports 11.2 metric tonnes of steep scrap in FY24 to meet demand because it does not have enough of it.
India needs a strong recycling ecosystem since its people keep their cars for a very long time and this will make change difficult.
In India, the biggest users of steel scrap are companies with an IF structure. About thirty percent of JSW Steel’s capacity, among significant firms, is based on EAF. Tata Steel intends to build similar facilities in other locations where scrap is easily accessible. In Ludhiana, the company is constructing a 0.75 mtpa scrap-based EAF factory.