In News:

• The Union Cabinet has approved a ?1,500 crore Incentive Scheme to promote critical mineral recycling in India, marking a significant step towards reducing import dependence and ensuring sustainable supply chain resilience.
• The scheme forms part of the broader National Critical Mineral Mission (NCMM), which seeks to build domestic capacity in exploration, mining, acquisition of foreign assets, and recycling of critical minerals.

Key Features of the Scheme

• Tenure: Six years, from FY 2025-26 to FY 2030-31.
• Outlay: ?1,500 crore.
• Eligible Feedstock:
  • E-waste
  • Lithium-ion battery (LIB) scrap
  • Other scrap sources such as catalytic converters from end-of-life vehicles.
• Beneficiaries:
  • Large, established recyclers.
  • Small/new recyclers and start-ups (allocated one-third of scheme outlay).
• Applicability: Investments in new units, as well as expansion, modernization, or diversification of existing units.

Incentive Structure

• Capex Subsidy:
  • 20% subsidy on plant, machinery, equipment, and utilities for projects that commence production within the stipulated timeframe.
  • Delays will lead to reduced subsidies.
• Opex Subsidy:
  • Linked to incremental sales over FY 2025-26 baseline.
  • 40% subsidy in the 2nd year (FY 2026-27).
  • 60% subsidy in the 5th year (FY 2030-31), subject to achieving threshold sales.
• Ceilings per Entity:
  • Large recyclers – ?50 crore (with ?10 crore cap on Opex subsidy).
  • Small recyclers/start-ups – ?25 crore (with ?5 crore cap on Opex subsidy).
• Scope: Incentives are limited to the extraction of critical minerals, not just black mass production.

Expected Outcomes

• Development of 270 kilotons of annual recycling capacity.
• Production of around 40 kilotons of critical minerals annually.
• Mobilization of about ?8,000 crore investment.
• Creation of nearly 70,000 direct and indirect jobs.

Significance

• Strategic Minerals Security: Provides near-term solutions to bridge supply-demand gaps until new mines and foreign acquisitions materialize.
• Circular Economy Boost: Promotes recycling of high-value e-waste and LIB scrap, reducing environmental load.
• Atmanirbhar Bharat: Strengthens domestic industries in electronics, renewable energy, and EV sectors by ensuring reliable access to lithium, cobalt, nickel, and other critical minerals.
• Inclusivity: Special provisions for start-ups and small recyclers to encourage innovation and wider participation.