Industry requests for policy to make zero per cent duty on metal scrap
India’s growing appetite for aluminium industry is largely accounted by demand for aluminium recycling industry which is zoomed at a CAGR of 9-11% from fiscal 2015 and 2023, while primary aluminium demand registered a CAGR of 1-2% only.
Projecting the demand pattern, Material Recycling Association of India (MRAI) said the recycled aluminium demand drivers are the country’s automobile, power, railways, packaging, consumer durables and construction sectors.
Looking to environment concerns, domestic primary aluminium manufacturers have the highest carbon intensity among global producers, with emissions of 14 tonnes of CO2 equivalent per tonne of aluminium. Whereas, recycled aluminium industry emits only 0.3MT CO2 per ton of recycled aluminium products, according MRAI.
India’s lower carbon-intensive aluminium recycled products demand is increasing day by day with newer applications with the growing appetite for environmentally friendly products due to its higher usage of scrap is another lever for decarbonisation.
While recycling aluminium industry is facing major challenges of domestic scrap collection due to lowest per capital consumption in India in past. As Aluminium has a long-life cycle, there is always a long gap between a recycled product entering into services and its end of life.
Given, India’s fast paced growth, India is consuming much more materials than is available from End-of-Life products. Hence, the recycling industry relies on imports of Metal Scrap to meet the shortfall to ensure sustainable business.
“We strongly urge the Government must provide a level playing field for both primary and secondary sector as we believe both are vital contributors to the national economy, for example, if customs duties are applicable on import of scrap, then commensurate export duties on the basis of total cost to country on primary products should also be levied,” MRAI President Sanjay Mehta said on 9 Nov 2023.
“Further, the Standards on Scrap material should be formed after consultation with recycling aluminum industry and to support recycling it should be industry friendly and not restrictive in nature, else it will have a negative impact on the aluminum recycling industry which is supporting to minimize the carbon emission,” he said, urging the government.
“Overall, we request government policy makers should make zero per cent duty on metal scrap till India becomes the Atmanirbhar on the availability of sufficient quantity and quality of scrap,” added Mehta while highlighting the benefits of Secondary Aluminium Industry.
The usage of Recycled aluminium, due to its monumental benefits of being environment friendly, being high quality, generating large employment and being cheaper is growing at a very faster pace, according to Mohan Agarwal, MD, CMR Green Technologies Ltd.
While recycling does not generate any liquid or solid effluents and has CO2 imprint of only 0.3 mt per ton, every 1 mt of primary aluminium generates 14 mt of Co2 emission and 8 mt of hazardous land fill.
“Therefore, as a services to the future generations, we must promote recycled aluminium over primary aluminium,” Agarwal underlined.
“India’s secondary aluminium metal manufacturing sector is playing a larger role in the circular economy, sustainability and low-carbon economy to minimise the CO2 emission,” Dhawal Shah, Partner, Metco Ventures LLP, pointed out.
“Despite this, Primary aluminium producers often suggesting to impose higher import duty on aluminium scrap and also demanding scrap unfriendly BIS specifications, insufficient collection systems which can hinder the market growth,” Shah said.
However, many countries like EU, UAE & South Africa have recognised that scrap is a critical raw material and have legislated to prevent its exports making it virtually impossible for us to import scrap. This is going to become more challenging ever after the execution of EU Waste Management Rule which will be effective from 1 Jan 2025 for the non-OECD countries, according to MRAI.
More importantly, India needs to have strategy for enhancing scrap imports as the world is shutting exports and domestic sourcing is limited, it stressed. Fiinews.com
