The Indian automobile industry is poised to see a big policy push in circular economy in vehicle production with the Environment Protection (End-of-Life Vehicles) Rules, 2025, notified by the Ministry of Environment, Forest and Climate Change, which is set to come into effect from April 1. States having adequate Registered Vehicle Scrapping Facilities (RSVF) will be critical to achieving the end objectives of sustainability and environmental protection through the reduction of vehicular pollution. The rules are based on the principle of extended producer responsibility (EPR), where producers of vehicles will be mandatorily required to scrap end-of-life vehicles, the targets of which have been set by the government. The life span of vehicles has been fixed at 20 years in the case of non-transport vehicles and 15 years in the case of the transport sector. This implies that non-transport vehicles sold in 2005-06 and transport vehicles placed in the market in 2010-11 or before that will have to be deposited by owners at RSVF or designated collection centres. The rules cover all types of transport and non-transport vehicles, except agricultural tractors, agricultural trailers, combine harvesters, and power tillers. Under the rules, the onus lies on the producer to ensure that no end-of-life vehicles are on the road. They must make necessary arrangements to receive such a vehicle from the registered owner at any designated Collection Centre, including its sales outlet, and shall upload such a list of designated collection centres and sales outlets on its website and at a conspicuous place of its sales outlets and service centres, the government informed the Lok Sabha. The rules also mandate the producers to fulfil the EPR obligations by floating schemes such as buy-back schemes, deposit refund schemes, etc., or designate any other entity to achieve the targets. Industry sources say that the automobile industry has been asked to recycle at least 8% of the steel used in the production of vehicles in 2005-06 from scrapped vehicles. The annual target for recycling steel from scrapped vehicles is set to increase to about 18% over the next decade. The regulation requires an RVSF to receive unfit vehicles for scrapping and carry out treatment, depolluting, dismantling, segregation, and scrapping activities by the provisions of the relevant laws; send all the recovered and segregated materials to the registered recyclers or refurbishers, co-processors for recycling and reuse of components or materials, in case of not having recycling or refurbishing facilities; send all non-recyclable or non-refurbishable materials and non-utilisable hazardous materials to the Common Hazardous Waste Treatment, Storage, and Disposal Facility authorised under Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. States putting in place a strong oversight mechanism to ensure that non-recyclable and hazardous components are safely disposed of and do not find their way into the solid waste dumping sites of the cities. The State Pollution Control Board, which is required to undertake periodic inspections and audits, or cause to be inspected by an authorised agency, of the RVSF, ensuring the compliance of these rules and taking necessary actions in the event of any violation, will be crucial to prevent any environmental hazards from irregularities in vehicle scrappage. The rules empower the Central Pollution Control Board to issue guidelines for handling, processing, and recycling or refurbishing materials of unfit vehicles in an environmentally sound manner. The CPCB undertaking periodic inspections and audits of the producer, as mandated by the new regulation, will be crucial to ensure that such a facility is complying with all the requirements. The rules also mandate the registered owner and bulk consumer of vehicles to deposit the unfit vehicle to the RVSF or at any of the producer’s designated sales outlets or designated collection centres within 180 days of declaration of it as an end-of-life vehicle by an automated testing station. States giving wide publicity to the rules will be essential to build awareness among registered owners about the legal implications of keeping an unfit vehicle. The Ministry of Road Transport and Highways has been claiming scrappage of older vehicles will help in the reduction of air pollution by about 20 to 25% and will also substantially reduce road fatalities. Attractive incentives offered to consumers, such as producers offering discounts on the purchase of new vehicles and state governments offering concessions in motor vehicle tax against the production of the certificate of depositing unfit vehicles, will determine the pace of recycling in the circular economy of vehicle production. The number of end-of-life vehicles in the country is estimated to increase to over 20 million in the current year. However, till July 15 last year, about 97,000 such vehicles have been scrapped, which is indicative of the pace of scrappage of older vehicles even though four years have already elapsed since the notification of Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021. The new rules on environmental protection roll out a stronger legal framework for compliance.