India has pledged to become a net-zero emitter by 2070, a commitment announced at COP28. Electric vehicles (EVs) are integral to achieving this ambitious goal. The adoption of EVs in India is on an upward trajectory, with the percentage of EVs sold increasing from a mere 1.75% in 2021 to a promising 6.5% in 2023. This surge in popularity can be attributed to the growing appeal of EV ownership among Indian consumers and the proactive efforts of the Indian government to promote EVs. One such initiative is India’s participation in the EV30@30 campaign, which aims for 30% of all vehicles sold in India by 2030 to be electric.
The Critical Minerals Mission and the Proposed PLI Scheme
The success of the EV30@30 initiative relies heavily on India’s ability to secure a steady supply of critical minerals, the raw materials essential for manufacturing EVs. Recognizing this, the Indian government launched the Critical Minerals Mission in its 2024 budget. This mission seeks to ensure a continuous supply of critical minerals to the Indian industry by encouraging domestic exploration, mining, and production.
The mission also strives to enhance domestic mining capabilities, promote circularity in the critical minerals supply chain, stimulate innovation related to these minerals, and position India as a global recycling hub. In a significant move, the mission has abolished customs duties on 25 critical minerals, thus stimulating the domestic refining and processing sectors and making these minerals more accessible for industries.
In addition to the Critical Minerals Mission, the Indian government is contemplating the introduction of a Product Linked Investment (PLI) scheme for critical minerals. This scheme will incentivize manufacturers to build facilities for recycling critical minerals, leading to an increase in e-waste recycling and investments in advanced recycling technologies. These two initiatives, working in tandem, are expected to significantly increase the availability of critical minerals in India.
The Imperative Need for the Critical Minerals Mission and PLI Scheme
Increasing the availability of critical minerals in India is a pressing concern. Currently, India relies heavily on a few foreign suppliers for most of its critical minerals needs. This dependence makes the country susceptible to external shocks like supply chain disruptions, currency fluctuations, and competing geopolitical and business interests.
For instance, the volatility in the price of critical minerals between 2020 and 2022 adversely affected the returns on 4.4 GW of solar power projects, significantly impacting Indian manufacturers’ profitability. Recycling critical minerals offers a viable solution to these challenges. It not only ensures a steady supply of critical minerals but also reduces the demand for primary minerals by 18% by 2030. Moreover, recycling creates employment opportunities for both skilled and unskilled workers and facilitates the effective use of waste generated from decommissioned End of Life (EOL) Renewable Energy (RE) systems.
Recycling Over Mining: A Sustainable Alternative
While mining could theoretically increase the supply of critical minerals, it comes with significant environmental costs. Mining activities degrade air, water, and soil quality and have negative impacts on communities living near mining sites. Before mining can be considered a feasible option, robust policies addressing its environmental impact must be implemented. In contrast, recycling critical minerals mined overseas can help reduce the need for domestic mining, thus minimizing environmental harm.
The Path Forward: Harmonizing Policies and Strengthening Partnerships
Although recycling critical minerals can lessen the demand for primary minerals, it necessitates the establishment of processing facilities in India. The success of these facilities depends on harmonizing policies related to e-waste management and spent technology recycling. The government can facilitate this through sound policymaking, ensuring maximum recycling of EOL RE systems.
EV manufacturers also have a crucial role to play. They can contribute by forging stronger partnerships with critical mineral recyclers, ensuring that as many EOL RE systems as possible are recycled. This collaboration will not only secure a steady supply of critical minerals but also promote sustainable practices in the industry.
Despite a recent slowdown in the global EV transition, this delay presents India with a valuable opportunity. It provides a window for strengthening its critical minerals supply chains and allows Indian EV manufacturers to catch up with their international counterparts in developing crucial EV technologies. The Critical Minerals Mission, a PLI scheme, strategic government policies, and increased collaboration between EV and battery manufacturers will enable India to seize this opportunity effectively. These initiatives will shape the future of India’s recycling industry and accelerate the country’s transition to electric vehicles.
