When Aarav Motors Pvt. Ltd., a family-run vehicle dealership in Gujarat, realized that over a hundred obsolete trucks were sitting in its yard, the owners saw a problem — but also an opportunity.
The new Vehicle Scrapping Policy 2025 was not just about cleaning up India’s roads; it was about formalizing a new green industry.
By partnering with a compliance consultant and getting their facility registered, Aarav Motors transformed scrap into a sustainable business stream.
That same opportunity now exists for hundreds of entrepreneurs, recyclers, and auto-component manufacturers across India.
What Is India’s Vehicle Scrapping Policy 2025?
The Government of India launched the Vehicle Scrapping Policy 2025 to systematically phase out old, unfit, and polluting vehicles while supporting a formal recycling ecosystem.
It is jointly implemented by the Ministry of Road Transport and Highways (MoRTH) and the Central Pollution Control Board (CPCB).
The policy promotes “Reduce, Reuse, Recycle” principles by ensuring that every end-of-life vehicle (ELV) is dismantled in an authorized, environmentally sound manner rather than being scrapped informally.
Core Objectives
- Eliminate vehicles that fail fitness and emission standards.
- Recover valuable metals and materials for reuse in manufacturing.
- Encourage formal recyclers and authorized scrapping facilities (RVSFs).
- Create thousands of jobs in the green recycling sector.
- Reduce India’s carbon footprint and improve road safety.
| Vehicle Type | End-of-Life Criteria | Action Under Policy |
|---|---|---|
| Private vehicles | 20 years or failed fitness test | Must be scrapped at RVSF |
| Commercial vehicles | 15 years or failed fitness test | De-registered and scrapped |
| Government vehicles | 15 years | Compulsory scrapping |
What this means: Millions of vehicles will enter the recycling stream, supplying steady raw material to authorized facilities.
Why the Policy Matters for Recyclers and Entrepreneurs
The scrappage ecosystem is no longer an informal trade; it’s a regulated industry with measurable returns.
Under the 2025 policy, recyclers who operate legally can benefit from government incentives, private partnerships, and assured supply of ELVs.
Business Advantages
- Steady Material Flow: Old cars, buses, and trucks are now legally required to be scrapped through registered centers.
- Government Support: States are offering tax rebates, land concessions, and easy financing for RVSFs.
- Profit from Recovery: Steel, aluminum, copper, and plastics extracted from vehicles can be resold directly to manufacturers.
- Sustainability Edge: Compliance with CPCB standards enhances brand credibility and opens ESG funding options.
Market Outlook
| Metric | 2021 Estimate | 2025 Projection |
|---|---|---|
| Vehicles reaching ELV age | ~8 million | 18–20 million |
| Annual recycling market | ₹9,000 crore | ₹25,000 crore + |
| Jobs created | 30,000+ | 75,000+ (direct & indirect) |
The Indian scrappage sector is expected to rival global recycling industries by 2030, providing scalable opportunities for small and medium enterprises.
How to Set Up an Authorized Vehicle Scrapping Facility
Launching a recycling or dismantling unit requires a combination of industrial approvals, CPCB registration, and state pollution board clearances.
Step-by-Step Overview
- Business Planning: Identify your service scope — dismantling, recycling, or full ELV processing.
- Site Selection: Choose land within an industrial zone with road access and environmental clearance.
- CTE & CTO: Obtain Consent to Establish and Consent to Operate from the respective State Pollution Control Board.
- RVSF Registration: Apply through the CPCB’s online portal for authorization as a Registered Vehicle Scrapping Facility.
- Hazardous Waste Authorization: Required for handling oils, batteries, and other hazardous components.
- Infrastructure & Safety: Install dismantling pits, depollution units, and material segregation zones with fire safety equipment.
- Annual Reporting: Submit periodic returns to CPCB through the online EPR portal.
| Stage | Requirement | Approving Authority |
|---|---|---|
| Industrial land & zoning | Proof of ownership / lease | District Industries Centre |
| Pollution NOCs | CTE & CTO under Air/Water Acts | State Pollution Control Board |
| EPR Registration | For recyclers under CPCB | CPCB |
| Waste handling license | Hazardous Waste Rules 2016 | SPCB / PCC |
| Annual reporting | Quarterly & annual returns | CPCB |
Tip: Compliance first, construction next — building before obtaining CTE can delay approval by months.
EPR Certificates: A New Income Stream
Under Extended Producer Responsibility (EPR), authorized recyclers receive certificates for the volume of materials recovered.
These certificates are purchased by vehicle manufacturers to meet their annual recycling targets, creating a parallel digital marketplace similar to carbon credits.
| Material Recovered | Approx. Market Value (₹/tonne) | Eligible for EPR Credit |
|---|---|---|
| Steel & Iron | 38,000 – 42,000 | Yes |
| Aluminum | 1,00,000 – 1,20,000 | Yes |
| Copper | 6,00,000 – 7,00,000 | Yes |
| Plastic components | 35,000 – 50,000 | Optional |
A mid-size RVSF processing 1,000 vehicles annually could generate ₹1.5–2 crore in EPR credit sales, in addition to the scrap material revenue.
Common Compliance Mistakes to Avoid
Many recyclers lose time and money due to minor documentation errors.
Here are the top pitfalls and how to prevent them:
- Applying for registration without uploading geo-tagged photos or videos of equipment.
- Missing hazardous waste authorization before operation.
- Using mismatched addresses between GST and CTO certificates.
- Not submitting quarterly or annual EPR reports on time.
- Operating under another entity’s license — a violation that can lead to immediate suspension.
Penalties for non-compliance can include closure orders, cancellation of registration, and fines up to ₹5 lakh.
A Case Study: Turning Compliance Into Growth
In 2022, Vardhan Eco Recyclers, a mid-tier firm in Tamil Nadu, started with a small dismantling unit handling just 15 cars per month.
With proper CPCB registration and EPR documentation, they scaled to 120 vehicles monthly within two years.
Today, the company supplies recovered steel and aluminum directly to auto-part manufacturers and earns over ₹35 lakh annually from EPR credits alone.
Their success story underscores a simple truth — compliance isn’t a cost, it’s a growth strategy.
Why Partner with Green Permits
Green Permits Consulting LLP simplifies environmental compliance and business licensing for recyclers, dismantlers, and entrepreneurs.
Our support includes:
- End-to-end assistance for CPCB EPR registration and documentation.
- Feasibility studies and DPR (Detailed Project Reports) for new recycling plants.
- Plant layout & setup guidance as per MoRTH and CPCB norms.
- Assistance in EPR target management and certificate generation.
- Strategic consulting for state-wise incentives and policy benefits.
Conclusion
India’s Vehicle Scrapping Policy 2025 is reshaping how the nation manages automotive waste.
For recyclers and entrepreneurs, it’s not merely an environmental mandate — it’s an entry into a structured, profitable, and future-ready industry.
Businesses that act early will enjoy the twin advantages of first-mover credibility and government-endorsed sustainability.
📞 +91 78350 06182 | 📧 wecare@greenpermits.in
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Frequently Asked Questions (FAQs)
The Vehicle Scrapping Policy 2025 is a government initiative to phase out old, polluting vehicles and promote recycling through authorized scrapping facilities registered with CPCB.
Any entrepreneur, manufacturer, or recycler with industrial land, valid CTE/CTO, and CPCB authorization can establish a Registered Vehicle Scrapping Facility (RVSF) under MoRTH guidelines.
Registered recyclers earn EPR certificates for every tonne of recovered metal or material. These certificates can be sold to vehicle manufacturers to meet their annual recycling obligations, creating additional revenue.
You’ll need CTE and CTO from the State Pollution Control Board, GST and PAN registration, plant layout with geo-tagged visuals, and EPR registration on the CPCB portal.
Green Permits offers end-to-end consulting for CPCB registration, EPR setup, and recycling-plant establishment, helping entrepreneurs stay compliant while scaling sustainably.
