Steel Scrap Recycling Policy

  • The Ministry of Steel on 8th November, 2019, came out with a Steel Scrap Recycling Policy in a bid to ensure quality scrap for the steel industry in India.


  • To reduce imports, conserve resources and save energy.
  • To help all stakeholders engaged in collection, dismantling, processing, and transportation in order to ensure the sustainable development of scrap-based steel industry.

Need for Policy

  • Non-Availability of Scrap: The availability of scrap is a major issue in India and in 2017 the deficit was to the tune of 7 million tons due to which the government had to import scrap worth Rs. 24,500 crores in 2017-18.
  • De-incentivising pre-2005 Vehicles: As per estimates, there are about 2 crore pre-2005 built vehicles that are plying on Indian roads and there is needs to be de-incentivise such vehicles in view of about 10 to 25 times higher pollution emission by them under the new emission norms. Even if those old vehicles are maintained properly, they will be polluting more with more emissions and will prove to be a hazard for road safety.
  • To Channelise Scrap Industry: With the increase in consumption of steel in the recent past and End of Life Vehicles (ELVs), the generation of scrap is likely to be increased considerably. This scrap has to be channelized so that the same can be utilized for steel production in an environmental friendly manner.

Key Points

To Promote Circular Economy

  • The policy envisions promoting circular economy in the steel sector. The high grade steel scrap shall be recycled to produce high grade steel again, to be used in the industries such as equipment manufacturing, automobiles and other downstream industries.
Read: Circular Economy

Hub and Spoke Working Model

  • A hub and the spoke model is promulgated in order to address the issue of collecting such end of life products for increasing scrap generation.

Structuring Formal and Informal Recycling Sector

  • Promotion of a formal and scientific collection, dismantling and processing activities for end of life products as well as structuring the informal recycling sector based on environmental and scientific fronts is mandated in the policy.

Extended Producer Responsibility(EPR)

  • Ministry of Road Transport and Highways (MoRTH) and the Department of Heavy Industries are working towards ‘Extended Producer Responsibility’ by requiring the vehicle manufacturers to incentivise scrapping of unfit vehicles in exchange for price discounts for purchase of new vehicles.

Creating Effective Treatment Mechanism

  • It aims to decongest the Indian cities from reuse of ferrous scrap, besides creation of a mechanism for treating waste streams and residues produced from dismantling and shredding facilities in compliance to Hazardous & Other Wastes (Management &Transboundary Movement) Rules, 2016 is proposed in the policy.

Evolving a Responsive Ecosystem

  • Development of an organized scrapping / shredding industry through a self- regulatory ecosystem based on a system of shared responsibility (SR) to beevolved, for collection, dismantling and disposal of ELVs, White Goods and otherscraps, involving all the key stakeholders such as aggregators, scrappingcenters, manufacturers (OEMs), owners and Government.

Impact of the Policy

Positive Impacts


  • The policy will help make India a producer of high quality ferrous scrap for quality steel production thus minimising the dependency on imports.The gap between demand and supply can be reduced in the future and the country may be self-sufficient by 2030.
  • It will help India emerging as a hub for automobile manufacturing as key raw material available from scrapping like steel,aluminium and plastic are bound to be recycled, bringing down automobile prices by 20-30 percent.
  • The use of every ton of scrap shall save 1.1 ton of iron ore, 630 kg of coking coal and 55 kg of limestone. There shall be considerable saving in specific energy consumption by 16-17%.
  • Operating on the 4+1 hub and spoke model, where 4 collection and dismantling centres were to cater to the 1 scrapprocessing centre then 400 jobs would be created by one such composite unit. And for 70 units producing a total of 7 MT of scrap the potential for employment generation would be of 2800 persons. If the country was to produce 70 MT, as if expected as per NSP 2017, the employment generation could be in the range of 3 lakh jobs.
  • The setting up of scrapping centres near highways, industrial corridors, railway sidingsand in the close proximity to Sagarmala project shall help in development ofmultimodal logistics parks.


  • The policy will contribute in adopting the principle of 6 Rs i.e. Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture to avoid any adverse impact on the environment.
  • The saving in energy will help reduce the water consumption and Green House Gas (GHG) emission by 40% and 58% respectively.
  • It can contribute to promotion of the Swachh Bharat Abhiyan by developing recycling zones.

Negative Impacts

  • However, the policy comes at a time when countries worldwide are seeking an outlet for waste metals after China's tightening of mixed metal imports. It could result in a surge of mixed metal (unprocessed) scrap into India.
  • Employees in facilities that recycle metal scrap are exposed to a range of safety hazards associated with material handling methods, hazardsassociated with the metals themselves (as dust or fumes), and with thehazardous substances used to process or recover these metals, leading to several health related issues.

Challenges in Scrap Recycling

 Following challenges, which adversely impact the areas of scrap metal supply, industry growth, pollution, quality, safety, revenue and transparency in different steps of steel scrap recycling.


  • Lack of definite guidelines for scrap classification (in line withInstitute of Scrap Recycling Industries (ISRI) or equivalent classification)
  • No definite criteria of defining “End of Life of Equipment” or “ End of life Vehicle”
  • Rationalization of tax and duty structure
  • Quality of domestic scrap


  • Logistic issues as high transport cost may act as a deterrent for scrap movement within the country
  • Lack of regulations to handle contaminated waste and other hazardous items arising out of scrapping and shredding
  • E-Procurement of scrap and standardization of procurement policy for various government related departments / institutions
  • Lack of uniform standard and specifications for usage acrossindustries
  • Lack of storage guidelines for hazardous waste, non-ferrous and non-metallic waste
  • Lack of organized recycling zones


  • Lack of implementation of safety standards in melting process
  • Promotional schemes for firms for R &D on recycling process to develop better technologies/equipment


  • Scrap residue sold to agent without verifying authorization certificate
  • Lack of authorized disposal sites (landfills) in all the major cities
  • Water and other waste generated during melting.

Way Forward

  • Steel is a material most conducive for circular economy as it can be used, reused and recycled infinitely.
  • In the National Steel Policy (NSP)-2017, the importance of scrap was realised. This Scrap Policy only promotes the role envisaged in the NSP-2017 to ensure scrap segregation (quality wise), collection, processing and recycling.
  • However, following China's toughened stand on waste material imports into the country since 2017, countries like Japan were finding alternative venues for its mixed metal scrap, which included places like Vietnam, Malaysia, and recently India.
  • After China, Japan was sending mixed metal scrap to Malaysia and Vietnam. But the governments there are making it difficult now too. In this changing scenario, India seems to be another preferable venue for dumping of mixed scarp metals.
  • Therefore, the government must ensure to set up a sound regulatory and management system in order to make India self-sufficient in scrap availability and make steel sector resource efficient, rather than turning India into a scrap dumping ground.


Source : Civil Services Chronicle Online, November, 2019