India considers truck scrapping program

The government of India is considering a vehicle scrapping program that would help remove old trucks from the road while also providing steel and iron scrap to feed the nation’s growing steel industry.

An online news item from The Telegraph, based in Kolkata, India, says India’s Union Council of Ministers “will soon take up a policy to scrap 20-year-old commercial vehicles along with a plan to use the scrapped metal to make steel.”

The article quotes India’s Steel Minister Choudhary Birender Singh as pointing to a national policy goal for India of producing 300 million metric tons of steel by 2030. (India produced 101 million metric tons of steel in 2017, according to the Brussels-based World Steel Association.)

India-based research firm CRISIL is cited in the article as estimating that some 640,000 trucks would be scrapped as a result of the policy during its first three years of implementation.

The plan would include incentives for truck owners to scrap their old vehicles, including lower tax rates on newly purchased trucks.

Government ministers in favor of the plan believe it would both spur new truck sales and boost steel production in India, according to The Telegraph. Its report also indicates the government would establish some 20 facilities around India to accept aging trucks and shred them there, adding “at least two new steel plants could use most of this scrap.”

A joint venture for shredding operations has been established by MSTC and Mahindras for six such facilities. The Tata organization is reportedly planning a similar facility in the Indian state of Gurgaon. (Both MSTC and Tata offered presentations on the topic at a SteelMint event in Thailand in late 2017.)

The Telegraph also indicates “the policy will also include rules for scrap import, which will be recycled at the local plants as the scrap is cheaper than the ore India produces.” While the policy may reduce dependence on ferrous scrap imports, “scrapped vehicles and other sources of steel scrap may be imported and scrapped at port-based steel scrapping centers and steel plants,” steel ministry officials are quoted as saying.

India’s steel sector currently uses about 64 percent iron ore as feedstock and only about 10 percent ferrous scrap. The government is seeking to grow India’s steel sector while shifting it to include more scrap-dependent, environmentally friendly and cost-effective electric arc furnace (EAF) production.