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Government plans a PLI scheme to boost critical mineral recycling and support the circular economy
Context: The Ministry of Mines is in the early stages of developing a Production Linked Incentive (PLI) program aimed at enhancing the recycling of critical minerals in India, to promote a circular economy and strengthen local supply chains.
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Production Linked Incentive Scheme:
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- The proposed PLI scheme is in line with policy recommendations from NITI Aayog and supports the Battery Waste Management Rules (BWMR) 2022, which mandate phased recycling of lithium-ion batteries used in electric vehicles starting from 2026. The PLI scheme, currently under development, aims to target e-waste recycling, often referred to as “urban mining,” to recover critical minerals.
- Implementation Strategy: Similar to existing PLI schemes, incentivizes production of recycled critical minerals for secondary use.
- Promotes investment in advanced recycling technologies and infrastructure.
- Discussions on whether incentives should prioritise high-purity minerals suitable for primary reuse or include broader recycling approaches like black mass (e-waste containing multiple minerals).
Battery Waste Management Rules (BWMR) 2022:
- Published by the Ministry of Environment, Forest and Climate Change, Government of India on 24th August, 2022.
- Aim to ensure environmentally sound management of all types of batteries.
- The rules function based on Extended Producer Responsibility (EPR)
- where the producers (including importers) of batteries are responsible for collection and recycling/refurbishment of waste batteries and use of recovered materials from wastes into new batteries.
- NITI Aayog Recommendations Advocates for a comprehensive PLI scheme aligning with state incentives and Advanced Chemistry Cell (ACC) PLI schemes for cell manufacturers.
- Emphasises parameters like recovery efficiency and domestic utilisation benchmarks for recycled minerals.
- Market Response: Urgency in incentivizing critical mineral recycling heightened by poor investor response to recent mineral block auctions.
Circular Economy:
- A system where materials are continuously reused and regenerated, aiming to eliminate waste entirely and restore natural systems.
- In a circular economy, products and materials circulate through maintenance, reuse, refurbishment, remanufacture, recycling, and composting.
- aiming to address climate change, biodiversity loss, waste, and pollution by reducing reliance on finite resources.
- The circular economy is based on three principles:
- Eliminate waste and pollution
- Circulate products and materials (at their highest value)
- Regenerate nature
- Benefits:
- Offers resilience, promotes innovation, creates economic opportunities, and benefits the environment and society as a whole.