Increased funding for the recycling sector is essential. For domestic production in India, a secondary market for material recovery and reuse is required.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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Increased funding for the recycling sector is essential. For domestic production in India, a secondary market for material recovery and reuse is required.

As a nation, India is developing strong aspirations for a brighter future. The government is aiming for a USD $5 trillion economy and the IT sector will need to play a major role to achieve this target. Multiple government programs and schemes such as Digital India, Make in India, Production Linked Incentives (PLI), and Electronics System Design & Manufacturing (ESDM) aim to develop strong supply chains and create a manufacturing hub for IT products.

While growth is always good, it has its own side effects. India’s consumption growth will lead to a substantial increase in natural resource consumption, as the current linear economy model of “Take – Produce – Consume – Dispose” is putting a strain on our limited resources. India is the 3rd largest producer of e-waste in absolute terms, but as of 2019, the per capita e-waste generation (2.4 kg) is still far less than the world average (7.3 kg) in the same year. As the economy grows, we can only expect e-waste generation to increase with improved consumer purchasing power.

However, the increase in e-waste doesn’t have to be inevitable, and India can seize this moment to shift away from the linear model and increase its participation in the circular economy. By working across various phases, India can pursue its economic growth without following the same unsustainable trends as developed nations.

The first opportunity in the product lifecycle is to design out ‘WASTE’. Since 80% environmental impact of the product is determined during its design, this is the critical phase to ensure that producers are incentivized and encouraged to adopt circular economy concepts.
Instead of maximizing near-term profits through the linear model of consumption, product leaders can prioritize long-term sustainability and business profits. Short-term and long-term profits don’t need to be mutually exclusive, as sustainability is reinforced through desirable features like durability and repairability. Additional features include recyclability, use of recycled materials, and designing for sustainability in packaging.

The next critical phase after design is manufacturing and transportation. During manufacturing, tracking of resources usage is very important. This can be done through energy source, quantity or material usage in products, and packaging. Further optimization of resources, improving efficiency, and using new technologies will further help to improve the entire value chain. The creation of more sustainable fuel alternatives is providing new opportunities to reduce emissions.

After consumption phase – Due to the fast change in technologies, products keep on changing by including new features. Due to various government programs like digital India, digital financial inclusion, and greater penetration of IT products to mass population, IT products consumption is increasing day by day. And hence the discard of products is also becoming faster. As per the published data by the Central Pollution Control Board (CPCB), e-waste generation has grown by about 30% on year on year (YoY) basis from FY 2018-19 to FY 2019-20. India’s e-waste regulation started in 2011 and was amended in 2016 with a major change of adding collection targets for producers. This became a game changer.

Rahul Agarwal
Senior Manager Global ESG, Lenovo India

Initial targets were implemented in FY 2017-18 with the 5% target (on Pro rata basis) set by the government, e-waste processed was about 10%, and in FY18-19 against the target of 20%, e-waste was processed 21%. The industry readily adopted the new targets, and infrastructure for the circular economy was continuing to build in the country. In FY 2019-20, the target was increased in the rules to 30% of the sales in previous years, depending on product average life. FY19-20, processing was done 22% against the target of 30%, though it fell short to meet the government set target, due to various challenges, but still e-waste processing was increased by around 36% in FY19-20 as compared to FY 2018-19 in absolute quantity.

As per Global Waste Monitor (backed by UN), globally 53.6 Mt of e-waste was generated in 2019, and out of that around 82.6% e-waste flow is uncertain or not documented. According to the same report, this 53.6 Mt e-waste contains around $57 Billion USD of recoverable raw material. Due to uncertain e-waste flow, a major portion of raw material may have gone to landfill or non-recovery which is not only a loss to the world economy but also has an adverse impact on our planet. There is a clear opportunity to recover these raw materials and reuse them for manufacturing new products.

As per CPCB portal, there are around 472 dismantlers/ recyclers in India with 1.4 Mt capacity. With the e-waste generation rate of 30% CAGR (Assuming same increase as in FY1920), we would need around 3 Mt recycling capacity in FY 2023-24. There is huge gap in required capacity verses available capacity. The problem is going to get more complicated with the new regulation which increased the products scope from existing 21 product categories to 106 product categories. Out of currently available 1.4 Mt dismantling/ recycling capacity, we have negligible real capacity to recover the end-to-end raw materials.

There is an absolute need for bigger investment in recycling industry. India would need to create a secondary market for material, recovery, and reuse for an in-country manufacturing.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members