India’s Automobile Industry fell short of its FY26 vehicle scrappage target by around 70% after changes to the Environment Protection (End-of-Life Vehicle) Rules tightened compliance requirements for manufacturers, as per PTI reports.
The rules, notified by the Ministry of Environment, Forest and Climate Change in January 2025, came into effect from April 1, 2025. The framework introduced extended producer responsibility (EPR) obligations linked to the recovery of steel from scrapped vehicles.
Under the rules, manufacturers were required to scrap 8% of the steel equivalent of vehicles sold in FY2005-06 for private vehicles and FY2010-11 for commercial vehicles.
This translated into 95.2 lakh vehicles becoming eligible for fitness testing during FY26. Of these, around 7.62 lakh vehicles were required to be scrapped to meet the target.
Industry data showed that only 2.42 lakh old vehicles reached registered scrappage centres during the year, resulting in a shortfall of nearly 5.2 lakh vehicles.
A draft amendment issued on March 27, 2026, removed the provision that allowed companies to use “other steel scrap materials” for EPR certification.
Following the amendment, only steel recovered directly from scrapped end-of-life vehicles qualified for certification. Industry executives said several manufacturers had planned compliance using a mix of vehicle scrappage and external automotive steel scrap.
The change increased pressure on automakers, as the volume of vehicles reaching authorised scrappage facilities remained below expectations.
Executives from the sector said the existing framework does not match current scrappage volumes in the market. Automated testing stations were also reported to be generating limited ELV volumes.
Industry body Society of Indian Automobile Manufacturers (SIAM) had raised concerns with the ministry regarding the limited availability of ELVs and sought permission for the use of other automotive steel scrap during the initial years of implementation.
The 8% target will continue until FY2030. The requirement is scheduled to increase to 13% between FY31 and FY35, and further to 18% from FY36 onwards.
Industry officials said the compliance gap may widen further if scrappage volumes do not increase in the coming years.
The revised rules have tightened EPR compliance for automakers by restricting certification to steel recovered from scrapped vehicles. Industry participants continue to flag limited ELV availability as a key challenge.
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Published on: May 11, 2026, 11:37 AM IST
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