Govt issues guidelines for steel scrap recycling ahead of scrappage policy

The policy will promote formal and scientific collection, dismantling and processing activities for end of life products that are sources of recyclable (ferrous, non- ferrous and other non-metallic) scraps which will lead to resource conservation and energy savings and setting up of an environmentally sound management system for handling ferrous scrap.

The policy will ensure that processing and recycling of products is in an organised, safe and environment friendly manner.

The government proposes to evolve a responsive ecosystem by involving all stakeholders.

The policy will aid availability of high quality ferrous scrap for quality steel production thus minimising the dependency on imports, especilly by following a vehicle scrappage policy, which will in turn help decongest Indian cities from ELVs and reuse of ferrous scrap.

The policy aims to create a mechanism for treating waste streams and residues produced from dismantling and shredding facilities in compliance with Hazardous & Other Wastes (Management & Transboundary Movement) Rules, 2016 issued by the environment ministry.

The policy will promote 6Rs principles of `Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture’ through scientific handling, processing and disposal of all types of recyclable scraps, including non-ferrous scraps, through authorized centers / facility.

The steel ministry is looking to develop a globally competitive steel industry by adopting state-of-the-art environment friendly technologies and to reduce imports. 

Ferrous scrap being the primary raw material for EAF/ IF based steel production, the policy envisages a framework to facilitate and promote establishment of metal scrapping centers in India. This will ensure scientific processing and recycling of ferrous scrap generated from various sources and a variety of products. The policy framework will provide standard guidelines for collection, dismantling and shredding activities in an organised, safe and environmentally sound manner.

Steel is a material most conducive for circular economy as it can be used, reused and recycled infinitely. While iron ore remains the primary source of steel making, used or re-used steel in the form of Scrap is the secondary raw material for the steel industry. Indian steel industry is characterized by the presence of a large number of small steel producers who utilise scrap with other inputs in EAF/IF for steel making. 

As of March 2019, 47 Electric Arc Furnaces and 1,128 induction furnaces are operating in the country and largely depend upon scrap as a raw material to produce steel.

National Steel Policy 2017 (NSP-2017) aims to develop a globally competitive steel industry by creating 300 million TPA steel production capacity by 2030 with a contribution of 35-40 per cent from EAF/IF route. Although, scrap is the main raw material for secondary sector, the primary sector also uses scrap in the charge mix of BOF to the tune of 15 per cent to improve efficiency, minimise cost of production and other process needs. The availability of raw materials at competitive rates is imperative for the growth of the steel industry and to achieve NSP-2017 target. Thus, the availability of right quality of scrap, in adequate quantity is one of the critical factors for the future growth for both EAF/IF sector and primary sector.

Further, Scrap-based steel making technologies have been envisaged as one of the important options to reduce GHG emission intensity. This will feature as an important initiative of the steel sector to minimise Green House Gas (GHG) emissions. This will also contribute to the adoption of the principle of 6Rs, ie, Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture to avoid any adverse impact on the environment and strengthening the foundation of sustainable development.

There is a worldwide trend to increase steel production using scrap as the main raw material as recycling of scrap helps in conservation of vital natural resources besides other numerous benefits. The use of every ton of scrap shall save 1.1 tonnes of iron ore, 630 kg of coking coal and 55 kg of limestone. 

This will result in considerable saving in specific energy consumption also as the same will reduce from around 14 MJ/Kg in BF/BOF route to less than 11 MJ/ Kg in EAF/IF route, ie, savings in energy by 16- 17 per cent. 

It also reduces water consumption and GHG emission by 40 per cent and 58 per cent, respectively. Thus, the demand of steel scrap has increased considerably in the past globally from 367 million tonnes in 2000 to 589 million tonnes in 2017.

The availability of scrap is a major issue in India and in 2017 the deficit was to the tune of 7 million tonnes. This was imported at the cost of more than Rs24,500 crore (approx.) in 2017-18. The gap between demand and supply can be reduced in the future and the country may be self-sufficient by 2030. This is mainly because with the increase in consumption of steel in the recent past and 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 environmentally friendly manner.

The proposed vehicle scrapping policy will ensure that quality scrap is available for the steel industry. Scrap is an important input for the electric furnaces. If quality scrap is provided as the charge to the electric furnaces, then the furnaces can produce high grade steel. High grade steel scrap will not also have the impurities if processing is done with the scrap processing centres and by shredders etc. 

The current supply of scrap in India is about 25 million tonnes from unorganised scrap industry and 7 mill9ion tonnes from imports. There is potential to harness this 7 million tonnes of scrap that is currently being imported from the domestic market itself. This will require adequate collection centres, dismantling centres working in a hub-spoke model and feed to the scrap processing centres. 

To produce 7 million tonne more of scrap, the country will require 70 scrap processing centres each with the capacity of 1 lakh tonnes; this is without disturbing the existing dismantling centres. The 70 scrap processing centres shall require about 300 collection and dismantling centres on the presumption that 4 collecting and dismantling centres cater to scrap processing centre.

Government expects  scrap production to increase with overall steel production rises to 250 million tonne. The National Steel Policy estimates the requirement of scrap would rise to 70-80 million tonne by then. This would require about 700 scrap processing centres, or 700 shredders. These shall in turn be fed by 2,800-3,000 collections and dismantling centres spread all over the country.

Operating on the 4+1 hub and spoke model, where 4 collection and dismantling centres were to cater to the 1 scrap processing centre then 400 jobs would be created by one such composite unit.