Introduction
The Indian government is in the initial stages of designing a Production Linked Incentive (PLI) scheme to promote the recycling of critical minerals, aligning with the broader goal of fostering a circular economy.
This initiative is particularly crucial given the tepid response to recent auctions of critical mineral blocks, which saw many fail to pass the technical bids stage.
Aligning with Policy Recommendations
The proposed PLI scheme is in line with policy recommendations from NITI Aayog, the government’s apex think tank.
It also complements the Battery Waste Management Rules (BWMR), 2022, which mandate phased recycling of used electric vehicle (EV) lithium-ion batteries starting from 2026.
Development and Stakeholder Involvement
On May 1, 2024, the Mines Ministry circulated a concept note on the PLI scheme, sharing it with key stakeholders including:
Department of Science & Technology
Ministry of New and Renewable Energy (MNRE)
Ministry of Heavy Industries (MHI)
Feedback from MNRE and MHI is pending, which is crucial given MNRE’s role in solar and wind energy policies and MHI’s involvement in the EV ecosystem.
Focus on Urban Mining
The PLI scheme aims to target e-waste recycling, often referred to as “urban mining”, to recover critical minerals such as:
Lithium
Copper
Cobalt
Graphite
Chromium
Silicon
These minerals are essential for clean energy technologies, including solar PV modules, wind turbines, energy storage systems, EVs, and consumer electronics.
Incentives and Investment
The scheme will incentivize the production of recycled critical minerals for secondary use and promote investment in advanced recycling technologies and infrastructure.
The quantum of incentives is expected to vary based on the type and value of minerals recycled.
Divergent Views on Scope
There is a debate among recyclers regarding the scope of the scheme:
Some argue that it should benefit only those extracting high-purity critical minerals suitable for reuse as primary inputs.
Others advocate for a broader scope, including the production of black mass, which is shredded and processed e-waste rich in minerals like lithium, manganese, cobalt, and nickel. This is because most Indian recyclers currently lack the capacity to extract battery-grade minerals from black mass.
Surge in E-Waste Generation
India's e-waste generation is set to surge due to rapid growth in solar and wind energy infrastructure and EV adoption. Industry estimates project:
Solar PV module waste to increase from 100 kilotonnes (kt) in FY23 to 340 kt by 2030.
500 kt of EV batteries are expected to reach recycling units in the coming years.
NITI Aayog’s Push for Production Linked Incentive scheme
In a report released in July 2023, NITI Aayog also recommended a PLI scheme for critical mineral recycling. The report, co-authored with the Green Growth Equity Fund, suggested that:
The scheme could help domestic recyclers and serve cell manufacturers selected under the ACC PLI scheme.
Key parameters for developing the incentive should include the cell chemistry or minerals and metals being recovered, recovery efficiency of recycled minerals and metals, and benchmarks for domestic utilization of recovered minerals and metals.
Challenges and Need for Incentives
The need to incentivize critical mineral recycling has become urgent after most critical mineral blocks offered by the Mines Ministry failed to attract enough eligible bidders.
This indicates a lack of investor interest in domestic mining of critical minerals.
Building on Battery Waste Management Rules
The new incentives will build on the Battery Waste Management Rules (BWMR), 2022, notified by the Central Pollution Control Board.
These rules mandate that producers of batteries containing lithium, nickel, cobalt, and lead ensure environmentally sound management of waste batteries through Extended Producer Responsibility (EPR) compliance.
Conclusion
The proposed PLI scheme represents a significant step towards establishing a robust circular economy in India.
By fostering critical mineral recycling, the government aims to reduce reliance on virgin ores and new mines, thus promoting sustainable development and enhancing domestic supply chains.
Importance for Competitive Exams
This article is highly relevant for candidates preparing for competitive exams such as UPSC CSE, UPSC CAPF, Assistant Commandant, Essay Writing, Current Affairs, NDA, CDS, SSB Interview, AFCAT, IAS, IB ACIO, and Current News.
It provides insights into government policies, sustainable development, and economic strategies, all of which are critical topics in these examinations.
Understanding such initiatives can help candidates frame better answers in mains examinations, write comprehensive essays, and perform well in interviews by demonstrating awareness of current government actions and their implications.
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