End-of-Life Vehicles (ELV) Rules: Scrappage and EPR Compliance for the Auto Sector

The End-of-Life Vehicles Rules have rewritten the compliance rulebook for every carmaker, importer and fleet operator in India. Under the Environment Protection (End-of-Life Vehicles) Rules, 2025, vehicle producers now carry a hard, measurable obligation to see their old products scrapped and their steel recovered. If you make, import or run vehicles at scale, ELV compliance is no longer a paperwork formality — it is a targeted, portal-tracked liability that started biting from FY 2025-26.

What the End-of-Life Vehicles Rules, 2025 Actually Require

The Ministry of Environment, Forest and Climate Change (MoEF&CC) notified the Environment Protection (End-of-Life Vehicles) Rules, 2025 through S.O. 98(E) dated 6 January 2025. The Rules came into force on 1 April 2025 and, for the first time, apply the principle of Extended Producer Responsibility (EPR) to whole vehicles rather than just batteries or tyres.

The framework covers all transport and non-transport vehicles, with a narrow set of exclusions — agricultural tractors, agricultural trailers, combine harvesters and power tillers. Everything else, from your two-wheelers to heavy commercial fleets, falls inside the net.

The core idea is simple but demanding. A "producer" — any manufacturer or importer of vehicles — is assigned a mandatory annual scrapping target, expressed as a weight of steel that must be recovered through registered channels. You discharge that obligation by buying EPR certificates that prove the scrapping actually happened.

When Does a Vehicle Become "End-of-Life"?

A vehicle formally becomes an end-of-life vehicle when it fails automated fitness testing or crosses its statutory age. Under the current framework, transport(commercial) vehicles are treated as end-of-life at 15 years, and non-transport (private) vehicles at 20 years, subject to mandatory fitness testing at automated testing stations.

Once a vehicle is declared end-of-life, the owner must deposit it at a producer designated collection outlet or a Registered Vehicle Scrapping Facility (RVSF) within 180 days. The Rules also require producers to run consumer-facing incentives — buy-back programmes and deposit-refund schemes — so that owners realise genuine scrap value based on verified material recovery rather than dumping vehicles informally.

EPR Targets — The Numbers Auto Producers Must Hit

The Schedule to the Rules sets a rising steel-recovery obligation. For the FY 2025-26 to 2029-30 window, producers must recover steel equal to 8% of the steel embedded in their qualifying end-of-life vehicles. That rises to 13% for 2030-31 to 2034-35, and to 18% beyond 2035.

The obligation is calculated against a historic sales baseline: a 20-year lookback for private (non-transport) vehicles and a 15-year lookback for commercial (transport) vehicles. In practice, that means the vehicles you sold up to two decades ago now define the scrapping bill you owe today.

Why the baseline matters

Because the target is pegged to historic sales volumes, high-volume manufacturers face the largest absolute obligations first. If you have grown your sales aggressively over the last 15 to 20 years, your FY26 and FY27 targets will scale accordingly — this is not a flat percentage that treats every producer alike.

How EPR Certificates and the CPCB Portal Work

The Central Pollution Control Board (CPCB) runs the EPR portal that makes the whole system auditable. The mechanism is deliberately physical: an RVSF scraps a vehicle, weighs the steel recovered and logs it on the CPCB portal. The portal then issues one kilogram of EPR certificate for every one kilogram of steel recorded.

Producers browse and purchase these certificates on the portal to meet the current year target, plus any carried-forward shortfall from previous years. Certificates are non-transferable once purchased and remain valid for five years, giving some room to bank early recovery against future obligations.

The takeaway for compliance teams: you cannot manufacture a certificate on paper. Every certificate is backed by a real vehicle that a licensed facility has actually shredded and logged. That design is what makes RVSF capacity the binding constraint on the entire scheme.

The FY26 Reality Check — A 70% Shortfall

The first year of the Rules exposed a serious infrastructure gap. As of January 2025, the government reported just 84 operational RVSFs nationwide — far short of what a country of India vehicle population needs.

The results were stark. Industry data indicate the auto sector missed its FY26 steel-recovery obligation by roughly 70%. Only about 2.42 lakh vehicles reached registered scrapping centres against a requirement that implied a shortfall of around 5.2 lakh vehicles. Several producers were left technically non-compliant not through negligence, but because there simply were not enough certificates in the market to buy.

If your compliance strategy assumes certificates will be freely available on the portal when you need them, FY26 is a warning. Demand for certificates is outrunning RVSF throughput, and early movers who lock in supply have a real advantage.The March 2026 Draft Amendment — Why It Raises the Bar

On 27 March 2026, MoEF&CC issued a draft amendment that, at the time of writing, remains at the draft stage but signals the direction of travel. Crucially, it proposes removing the provision that allowed "other steel scrap materials" to count toward EPR certificate generation.

That change matters enormously. Many producers had planned their FY26 compliance around a mix of genuine vehicle scrappage and qualifying industrial steel scrap. Stripping out the industrial-scrap route means certificates must come almost entirely from actual end-of-life vehicles processed at RVSFs — tightening supply exactly when demand is already unmet. Producers should model their FY27 exposure on the assumption that this route may close.

A Compliance Roadmap for Producers and Fleet Operators

The practical steps below will keep you ahead of the enforcement curve:

Register as a producer on the CPCB EPR portal and reconcile your 15/20-year historic sales baseline before your target is computed against you.

Calculate your FY26 and FY27 steel-recovery obligation early, using the 8% factor, so you know your certificate requirement in tonnes, not guesses.

Secure certificate supply through tie-ups or offtake arrangements with CPCB-licensed RVSFs, rather than relying on spot availability on the portal.

Stand up your deposit-refund and buy-back scheme so end-users actually return vehicles to your designated outlets within the 180-day window.

Track the March 2026 draft amendment; if the industrial-scrap route closes, rebuild your FY27 plan around vehicle-only recovery.

Keep an audit trail — portal logs, certificate purchase records and RVSF agreements — ready for CPCB and State PCB scrutiny.

What This Means for Your Business

The ELV Rules have turned end-of-life vehicles from an afterthought into a board-level compliance risk. With targets rising to 13% and 18%, a shrinking scrap-eligibility definition, and RVSF capacity still catching up, the producers who plan two years ahead will avoid the non-compliance trap that caught the sector in FY26.

Testa & Tegmen advises producers, importers and fleet operators on ELV registration, target computation, RVSF sourcing strategy and end-to-end EPR documentation. If you want a clear read on your obligation and a defensible compliance file before the next filing cycle, our environmental advisory team can help you build it.