Govt finalising new steel scrap recycling policy

Jaipur: The steel ministry is in the process of finalising a new steel scrap recycling policy to overhaul the exiting policy of 2019, primarily to address stakeholders’ pain points and make it more align with the changing industry dynamics.

Scrap is used both in the electric arc furnace (EAF) and basic oxygen furnace (BOF)-based steelmaking. However, the degree differs. While it is the primary raw material for EAF route, primary players also use scrap in the BOF-based steel production to improve efficiency and reduce production cost. Scrap substitutes iron ore and coking coal.

“We are finalising a new steel scrap recycling policy. This will be finalised within a couple of months,” Daya Nidhan Pandey, Joint Secretary, Ministry of Steel, told reporters on the sidelines of the 13th International Material Recycling Conference here.

Compared to the global average of around 33 per cent, scrap usage in steelmaking in India languishes at around 22 per cent. However, industry estimates the usage might go up to the tune of 25-30 per cent by 2030 in line with the growing steel production. Availability of scrap is an issue in India, though.

While Pandey didn’t divulge details of the proposed policy, the industry wants a few nagging issues to be addressed in the new policy to streamline the entire ecosystem.

“India’s new steel scrap policy should focus on creating a transparent and domestically integrated scrap ecosystem to support cost-competitive and low-carbon steelmaking. The government can incentivise organised scrap collection and processing through GST rationalisation, viability-gap funding for shredding centres, and faster clearances for vehicle scrappage units,” said BigMint CEO Dhruv Goel.

Goel also wants the government should also simplify and expedite the vehicle deregistration process, enhance incentives for end-of-life vehicles, and make the scrappage of such vehicles mandatory to ensure effective implementation of the policy.

Sanjay Mehta, President, Material Recycling Association of India (MRAI), said, “nearly one-third of scrap in India originates from ragpickers, households and small workshops. Lower GST and routing scrap purchases from the unorganised sector through UPI-based transactions, while discouraging cash at the first level of collection, will help bring these workers into the formal economy with dignity and sustainability.”