Circular Economy in Mobility

• 05 Feb 2026

For Prelims: Circular Economy, NITI Aayog, End-of-Life Vehicles, E-waste, Extended Producer Responsibility

For Mains: Circular Economy as a Tool for Sustainable Development, Waste Management Challenges in Urbanising India, Critical Minerals, Energy Transition, and Resource Security

Source: PIB 

Why in News?

NITI Aayog launched three thematic reports on Enhancing Circular Economy in End-of-Life Vehicles (ELVs), Waste Tyres, E-waste, and Lithium-ion Batteries at the International Material Recycling Conference (IMRC) organised by the Material Recycling Association of India (MRAI) in Jaipur.

• The reports outline challenges and policy pathways to strengthen India’s circular economy ecosystem.

Summary

• NITI Aayog’s reports highlight that rapid urbanisation, EV growth, and digitalisation are sharply increasing ELVs, waste tyres, E-waste, and lithium-ion battery waste, exposing gaps in formal recycling, standards, and Extended Producer Responsibility (EPR) enforcement.
• Adopting a strong circular economy framework—through infrastructure expansion, formalisation of informal recyclers, stronger EPR, and high-value recycling—can turn India’s waste crisis into a source of resource security, green jobs, and climate resilience.

What are the Key Highlights of the NITI Aayog Reports on Circular Economy in the Mobility?

End-of-Life Vehicles (ELVs)

• Rapid urbanisation and rising vehicle ownership, including the surge in electric vehicles, are accelerating the generation of ageing vehicles in India. 
  • Electric Vehicles (EV) sales increased from 50,000 in 2016 to 2.08 million in 2024, with the government targeting 30% EV share in total vehicle sales by 2030, increasing future ELV volumes. 
  • The number of End-of-Life Vehicles is projected to rise from 23 million in 2025 to 50 million by 2030, intensifying environmental and material recovery challenges. 
• Limited availability of Automated Testing Stations (ATS) and Registered Vehicle Scrapping Facilities (RVSFs) constrains formal scrappage and circular economy outcomes. 
  • Weak financial viability of formal scrappage units, procedural delays, and low consumer awareness sustain informal dismantling practices. 

Circular Economy of Waste Tyres in India 

• Growth in vehicle ownership and EV adoption is driving higher tyre consumption, leading to a sharp increase in End-of-Life Tyres (ELTs). 
• The tyre recycling ecosystem remains fragmented, with poor traceability, lack of standards, and dominance of informal recyclers. 
• High-value recycling pathways such as recovered Carbon Black (rCB) and tyre retreading remain underutilised due to weak standards and market mandates. 
  • Downcycling of tyre waste leads to missed opportunities for import substitution and green job creation. 

E-waste and Lithium-Ion Batteries in India 

• Digitalisation and the clean energy transition are rapidly increasing E-waste and Lithium-ion battery waste in India. 
  • E-waste generation is expected to rise from 6.19 MMT (million metric ton) in 2024 to 14 MMT by 2030, significantly increasing recycling and environmental management pressures. 
  • Demand for Lithium-ion batteries is projected to grow from 29 GWh in 2025 to 248 GWh by 2035, driven by EV adoption and energy storage needs. 
• Informal recycling using unsafe methods dominates the sector, causing pollution, health risks, and economic losses. 
• Extended Producer Responsibility (EPR) for E-waste covers only a few metals, while weak monitoring allows fake recyclers and fraudulent certifications. 
  • Inefficient recycling deepens India’s dependence on imported critical minerals, affecting long-term energy security.

What is Circular Economy?

• About:  The Circular Economy refers to an economic model whose objective is to produce goods and services in a sustainable way, by limiting the consumption and waste of resources (raw materials, water, energy) as well as the production of waste.  
  • Unlike the linear economy (take–make–dispose), the circular economy includes 6 R’s - Reduce, Reuse, Recycle, Refurbishment, Recover, and Repairing of materials. 

Importance of Circular Economy for India 

• Resource Constraint: India has 18% of the global population but only ~7% mineral resources and ~4% freshwater, making a linear, extraction-led growth model economically unsustainable. 
  • Linear consumption increases dependence on imported metals, fossil fuels, and construction materials, while circular economy substitutes virgin imports with domestic secondary materials. 
• Exploding Waste Generation: India generates ~1.68 lakh tonnes of municipal solid waste per day, projected to reach 436 million tonnes annually by 2050, showing growth is directly translating into waste without circular intervention. 
• Residual Waste Dominance: Only about 55–60% of waste is processed, while the rest becomes residual waste that is landfilled or dumped, permanently destroying recoverable material value. 
  • India has over 2,100 dumpsites, locking over 10,000 hectares of urban land, which circular processing can reclaim for housing and infrastructure. 
• Climate impact: GHG emissions from municipal solid waste are projected to reach ~41 million tonnes CO₂-equivalent by 2030, mainly due to landfill methane.  
  • Circular economies can mitigate this by reducing emissions at both the source and disposal stages. 
• Construction Sector Pressure: India’s infrastructure boom generates massive Construction and Demolition (C&D)waste, of which ~95% is recyclable, yet poor circularity increases sand mining, cement emissions, and ecological damage. 
• Water stress: Urban India sewage generation is projected to rise to 1.2 lakh millions of liters per day (MLD) by 2050, circular reuse of treated wastewater reduces freshwater withdrawals. 
• Employment potential: Circular activities like recycling and bio-methanation can generate over 1 crore man-days of employment, unlike capital-intensive extractive industries. 

India’s Initiatives Supporting Circular Economy 

• Swachh Bharat Mission (Urban & Gramin). 
• Solid Waste Management Rules, 2026. 
• Plastic Waste Management (Amendment) Rules, 2022. 
• Ban on Single-Use Plastics. 
• Swachh Survekshan. 
• e-Waste Management Rules 2022. 
•  Mission LiFE. 
• India is a key member of the Global Alliance on Circular Economy and Resource Efficiency (GACERE), which aims to foster a global transition to circular economic practices.  

What Measures are Needed to Strengthen the Circular Economy in Mobility? 

End-of-Life Vehicles (ELVs) 

• Expand ATS and RVSFs on a time-bound basis, including PSU-led models with private operations to ensure nationwide coverage. 
• Link vehicle deregistration strictly to a valid Certificate of Deposit (CoD), supported by Aadhaar-based ownership transfer and automated penalties to prevent leakages. 
• Formalise informal dismantlers through phased integration, technical assistance, and a one-time waiver of legacy environmental liabilities to encourage compliance. 

Circular Economy of Waste Tyres 

• Restrict Tyre Pyrolysis Oil (TPO) use to refineries or approved industrial applications and mandate conversion of carbon char only into recovered Carbon Black (rCB). 
  • Notify national standards for TPO and rCB and issue guidelines for their use in value-added applications to prevent downcycling. 
• Formalise informal recyclers via Udyam Assist, offer targeted financial support, one-time liability waivers, and rationalise GST and Harmonized System of Nomenclature (HSN) codes for recycled tyre products. 

E-waste and Lithium-Ion Batteries  

• Expand EPR coverage to include additional high-value and critical minerals beyond current metals to encourage investment in advanced recycling. 
  • Notify chemistry-wise metal composition for Lithium-ion batteries and update BIS standards (IS 16046) to mandate composition testing and purity benchmarks. 
  • Issue detailed guidelines for collection, storage, transport, refurbishment, and recycling of waste batteries and E-waste. 
• Create shared recycling facilities with modern technology, formally train and recognise informal recyclers, and increase waste collection through city-led PPP systems ULB-led PPPs. 

Conclusion 

The NITI Aayog reports collectively stress India’s waste crisis is no longer just a sanitation issue—it is a resource, climate, urban governance, and economic challenge. By embracing a circular economy approach, residual waste can be transformed from an environmental liability into a driver of sustainable growth, green jobs, and climate resilience, aligning India’s development pathway with its SDG commitments. 

Drishti Mains Question:

India’s waste problem is not merely a sanitation issue but an economic and governance challenge. Discuss.

Frequently Asked Questions (FAQs)

1. What is meant by a circular economy?
A circular economy minimises waste and resource use by following the 6Rs—Reduce, Reuse, Recycle, Refurbish, Recover, and Repair, unlike the linear take–make–dispose model.

2. Why are End-of-Life Vehicles (ELVs) a growing concern in India?
Rapid urbanisation and rising vehicle ownership, including EVs, are projected to increase ELVs from 23 million in 2025 to 50 million by 2030, straining recycling systems.

3. What are the key challenges in India’s waste tyre recycling ecosystem?
The sector suffers from informality, poor traceability, lack of standards, and underutilisation of high-value products like recovered Carbon Black (rCB).

4. Why are E-waste and lithium-ion battery recycling critical for India?
Inefficient recycling increases pollution, health risks, and dependence on imported critical minerals, affecting long-term energy security.

5. What key measures has NITI Aayog suggested to strengthen the circular economy in mobility?
Recommendations include expanding scrappage infrastructure, strengthening EPR, formalising informal recyclers, improving standards, and creating shared recycling facilities

UPSC Civil Services Examination, Previous Year Questions (PYQs) 

Prelims

Q. Consider the following statements: ( 2025)

Statement I: Circular economy reduces the emissions of greenhouse gases.

Statement II: Circular economy reduces the use of raw materials as inputs.

Statement III: Circular economy reduces wastage in the production process.

Which one of the following is correct in respect of the above statements?

(a) Both Statement II and Statement III are correct and both of them explain Statement I

(b) Both Statement II and Statement III are correct but only one of them explains Statement I

(c) Only one of the Statements II and III is correct and that explains Statement I

(d) Neither Statement II nor Statement III is correct

Ans: (a)

Q. In India, ‘extend producer responsibility’ was introduced as an important feature in which of the following?(2019)

(a) The Bio-medical Waste (Management and Handling) Rules, 1998

(b) The Recycled Plastic (Manufacturing and Usage) Rules, 1999

(c) The e-Waste (Management and Handling) Rules, 2011

(d) The Food Safety and Standard Regulations, 2011

Ans: (c)