The policy was aimed at using recycled parts taken from automobiles which were more than 15 years old, he said at an event here.
"About 65 per cent of pollution is caused because of vehicles which are more than 15 years old", he told a pre-budget conclave organised by the Confederation of Indian Industry (CII) and "The Hindu BusinessLine" newspaper.
The usage of recycled auto parts would help in reducing the pollution, an official release quoted him as having said.
The Centre was also planning to set up 'automobile clusters' across the country including Chennai, Gadkari said.
On the Goods and Services Tax regime, he expressed hope it would be introduced by April 1 this year.
Referring to the demonetisation issue, he said though there were some problems due to shortage of currency notes, the decision was taken in the best interest of the nation.
"The gravity of the problem has reduced and it will further reduce in next three months", he said.
The Government under the leadership of Prime Minister Narendra Modi has given highest priority to infrastructure development, he said, adding the time frame taken for relaying of roads per day would be expedited shortly.
Currently, roads were being relaid at a pace of 18 kms per day. It would be increased to 28-30 kms per day, he said.
On development of ports, Gadkari said after the BJP-led NDA came to power, twelve major ports had registered profits.
"Last year the profits achieved by the major ports crossed Rs 6,000 crore", he said.