On January 6, 2025, the Ministry of Environment, Forest and Climate Change notified the Environment Protection (End-of-Life Vehicles) Rules, 2025 (“Rules”). These Rules inter alia aim to promote the recycling of vehicles nearing the end of their lifecycle. Here, we address five key questions for Producers under the Rules:
Q1. When do these Rules come into force?
These Rules will be effective from April 1, 2025.
Q2. What are End-of-Life Vehicles?
End-of-Life Vehicles (“EoLV”) are those vehicles which are:
unregistered,
declared unfit,
cancelled under the provisions of the Motor Vehicles Act or by a court order, and/or
self-declared as waste by the registered vehicle owner due to circumstances prescribed under the Rules.
They include two/three/four wheelers, electric vehicles, battery-operated vehicles, e-rikshaws and/or e-carts.
The Rules mandate the deposit of all EoLVs by registered owner or bulk consumer, at designated sales outlet, Collection Centres or Registered Vehicle Scrapping Facilities within 180 (one hundred and eighty) days from the date the vehicle becomes EoLV.
Q3. Who is it applicable to?
These Rules apply to:
Producer: Includes manufacturers, importers, brand owners and sellers;
Registered owner of vehicles,
Bulk Consumers: Includes consumers owning more than one hundred vehicles, including State Transport Undertakings (STUs).
Registered Vehicle Scrapping Facility: Any registered entity involved in dismantling and scrapping of EoLVs.
Collection Centres: Registered facilities responsible for collecting, storing and forwarding EoLVs for processing.
Automated Testing stations and entities involved in testing vehicles, handling, processing and scrapping EoLVs.
Please note that these Rules do not apply to:
waste batteries covered under the Battery Waste Management Rules, 2022;
plastic packaging covered under the Plastic Waste Management Rules, 2016;
waste tyres and used oil covered under Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016;
e-waste covered under E-Waste (Management) Rules, 2022; and/or
agricultural tractors, agricultural trailers, combiner harvesters and power tillers.
Q4. What are the primary obligations of the Producer?
Extended Producer Responsibility (EPR)
Scrapping: The Producer will bear Extended Producer Responsibility, meaning it is responsible for ensuring the safe scrapping of EoLV that Producer has introduced, introduces and/or put to self-use in the Indian market.
Scrapping of EoLV means scrapping of steel from EoLV.
Manner of scrapping: The scrapping process must be carried out in a manner that safeguards human health and the environment from any adverse effects caused by substances contained in the EoLVs.
Compliance Means: Producers must meet EPR obligations either by purchasing EPR certificates generated by their own Registered Vehicle Scrapping Facilities or by third-party Registered Vehicle Scrapping Facilities.
Engagement of Registered Entities: The Rules also allow the Producer to engage any registered entity to fulfil its EPR under these Rules.
Achieve Scrapping Targets
The Producer must meet the EoLV scrapping targets outlined in the Schedule of the Rules, which vary by vehicle type. The targets for the upcoming financial year 2025-26 are as under:
Vehicle Type | EPR Target (Weight) |
Non-transport vehicles | Min. 8% of the steel used in vehicles in 2005-06. |
Transport vehicles | Min. 8% of the steel used in vehicles in 2010-11 |
These targets will gradually increase to 13% starting in 2030 and 18% from 2035 onwards.
Collection Centre Related
In case of non-availability of EPR certificates with Registered Vehicle Scrapping Facilities, the Producer has the responsibility of collection as well.
Producers must make necessary arrangements to receive EoLVs from registered owners at designated Collection Centres, including sales outlets.
A list of designated Collection Centres must be uploaded on its website as well as displayed prominently at the sales outlets and service centres of the Producer.
Central Pollution Control Board (CPCB) related obligations
Obtain Registration: The Producer should apply, obtain and maintain registration from CPCB via the centralised online portal as per the prescribed process.
Submit Annual Returns: Annual returns in prescribed Form 1 on the CPCB portal must be submitted by June 30 for the previous financial year inter alia containing details on vehicle production, EoLV collected and recycled, the weight of steel used, fulfilment of EPR obligations during the previous financial year, etc.
EPR Declaration: EPR obligations for the current year must be declared by April 30 of the same year to CPCB.
Updates to be intimated: The Producer must inform CPCB of any changes to the information contained in the EPR registration or obligation, and any permanent cessation of activities of making available on the market of the vehicles covered under EPR obligations.
Notify breaches: Any violations or non-compliance with these Rules by entities involved in handling and managing EoLVs must be reported to the CPCB or State Pollution Control Board.
Submission of list of designated Collection Centres: The list of designated Collection Centres must be submitted to CPCB on their online portal.
Adoption of Measures and Initiatives
Ensure deposit of EoLVs: Producers must take steps to ensure EoLVs are sent to designated Registered Vehicle Scrapping Facilities or Collection Centres.
Adopting Sustainable Production Measures: The Producer must take measures for sustainable vehicle production in accordance with guidelines issued by the CPCB in this regard.
Create awareness: Organize awareness campaigns and encourage customers by offering incentives for safe deposit of EoLVs at Registered Vehicle Scrapping Facilities or the designated Collection Centres.
Implement schemes like buy-back, deposit refund or other and assign another entity to handle EPR obligations.
Compliance with AIS-129
The Producer must comply with the provisions of AIS-129, as published under the Central Motor Vehicles Rules, 1989. These standards lay down the requirements for the collection and dismantling of EoLV; heavy mental restriction, dismantling information and type approval of vehicles with regard to their Reusability, Recyclability And Recoverability (RRR).
Note: If Producer sets up its own Collection Centre and/or Registered Vehicle Scrapping Facility, then the Producer will also have to fulfil the obligations associated with these registered collection/scrapping facilities.
Further, if the Producer stops operations, it must continue to fulfil its EPR obligations for vehicles already introduced to the market until closure, in compliance with these rules.
Q5. What is the penalty for non-compliance by a Producer?
The penalties for non-compliance are as under:
Fines and/or Imprisonment: Any contravention of the Rules by the Producer will attract a penalty of not less than INR 10,00,000 (Indian Rupees Ten Lakhs only), which may extend to INR 15,00,000 (Indian Rupees Fifteen Lakhs only), for each contravention. In case of continuing contravention, an additional penalty of INR 10,00,000 (Indian Rupees Ten Lakhs only) per day will be imposed.
Any failure to pay penalty or additional penalty within the prescribed timeline will render the defaulting company liable to imprisonment for up to three years or with a fine up to twice the amount of the penalty, or both. Every officer in default will also be deemed guilty of the offence and liable to be proceeded against and punished accordingly.
Environment Compensation: Any failure to comply with the provisions relating to handling and scrapping of EoLV in the prescribed manner, resulting in loss, damage or injury to environment or public health, will lead to imposition of prescribed Environment Compensation, which may equal to such loss, damage or injury. A portion of the environmental compensation may be partially refunded if the obligations are met within the specified timeframes (1-3 years).
Reputational Risk: CPCB will publish a list of defaulting producers by August 31 each year. This public disclosure could have significant reputational implications for the Producer, in addition to the financial penalties.