Context: Recently, the Union Cabinet has approved a Rs 1500 crore Incentive Scheme to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources.
Relevance of the Topic:Prelims: Key facts about Incentive Scheme for Critical Mineral Recycling.
Incentive Scheme for Critical Mineral Recycling
- Aim: To develop capacity to recycle battery waste and e-waste for extraction of critical minerals.
- This scheme is part of the National Critical Mineral Mission (NCMM) which is aimed at building the domestic capacity of and supply chain resilience in critical minerals.
- Tenure: 6 years from FY 2025-26 to FY 2030-31.
Key Highlights of the Scheme:
- Eligible feedstock: e-waste, Lithium Ion Battery (LIB) scrap, and scrap other than e-waste & LIB scrap (E.g., catalytic convertors in end-of-life vehicles).
- Expected beneficiaries: Both large established recyclers and small new recyclers (including start-ups), for whom one-third of the scheme outlay has been earmarked.
- The scheme will be applicable to investments in new units as well as expansion of capacity / modernisation and diversification of existing units.
Incentive Structure
- Capex subsidy: 20% on plant, machinery, and utilities for units that start production within a set timeframe. Delays will attract lower subsidies.
- Opex subsidy: Linked to incremental sales over the FY 2025-26 base year. Firms can claim 40% of eligible Opex in the second year, and 60% in the fifth year, subject to meeting sales thresholds.
- Subsidy limits: Maximum Rs 50 crore per large entity and Rs 25 crore per small entity, with ceilings on Opex support at Rs 10 crore and Rs 5 crore respectively.
Expected Outcomes:
- Expected to develop at least 270 kilo ton of annual recycling capacity resulting in around 40 kilo ton annual critical mineral production.
- Bringing in about Rs 8000 crore of investment and creating close to 70,000 direct and indirect jobs.
Also Read: National Critical Mineral Mission
The scheme is a prudent way to ensure supply chain sustainability in the near term through the recycling of secondary sources.