Environmental Compliance in EV Production

Sonal Rangnekar

Electric vehicles (“EVs”) are quickly taking the place of conventional vehicles in the transportation sector, which is undergoing a dramatic change due to consumer demand for cleaner, greener cars. With initiatives like “FAME I and FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)”, India has also promoted EV mandates and requirements. Although most think that electric cars are a greener option than conventional cars, the way that they are made or charged may affect the environment.

With the increasing popularity of EVs, a relevant concern is whether the environmental laws of India and EVs are in sync.

In this article, we briefly analyze the important environmental laws that impact the manufacturing of EVs in India.

EV AND ENVIRONMENT LAWS

The Environment (Protection) Act, 1986 and the rules and regulations framed thereunder (“EPA”) are the primary law designed to control and prevent environmental degradation and pollution in India. The EPA lays down the standards for the discharge of environmental pollutants inter alia in the area of controlling chemical and hazardous waste management. As a result, the EPA works to regulate and control industrial pollution emissions, e-waste disposal, water contamination, etc. The EPA requires strict adherence to its provisions; non-compliance of which carries both criminal and financial penalties.
As per the provisions of the EPA, no person carrying on any industry, operation or process can discharge or emit any environmental pollutant in excess of the prescribed standards.

Even while EVs often produce very little or no pollution, the installation and operation of charging stations—which ultimately rely on the combustion of coal in thermal power plants, the disposal of spent batteries as well as the manufacturing facilities releasing e-waste and hazardous materials could pose a serious concern to the rising levels of pollution. Used batteries typically wind up at backyard smelters, which remove metal using extremely toxic methods. EPA works to allay these worries by regulating or controlling industrial pollution emissions, e-waste disposal, water contamination, etc.

It should be highlighted that, while the use of EVs produces zero pollution, the manufacturing process is identical to that of a regular automobile. During the manufacturing process, the companies' manufacturing facilities may release e-waste and hazardous materials. Because of the chemical composition of the batteries, their disposal may generate a number of environmental problems. Therefore, a number of waste management regulations would also be applicable to manufacturers of EVs as well as EV batteries.

Some of the essential consents/ clearances/ compliances that would be required for setting up a manufacturing unit for EVs and components used therein are set out below:

1. Consent for establishment and Consent for operation under Water (Prevention and Control of Pollution) Act, 1974 (“Water Act”) and Air (Prevention and Control of Pollution) Act, 1981 (“Air Act”).The Water Act prohibits the discharge of sewage or trade effluents into a stream, well or sewer by an industry, operation or process without the approval of the concerned State Pollution ControlBoards (“SPCB”). The Air Act, on the other hand, empowers the SPCBs to notify standards of emission of air pollutants by industrial plants and automobiles. Industries are required to obtain the ‘Consent to Establish’ before the construction of a new project from the SPCB and upon inspection, the operator is required to obtain the 'Consent to Operate' to commence operations.An EV manufacturer would be required to obtain consent to establish and operate for setting up its manufacturing unit in accordance with the Air Act and the Water Act.

2. The Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (“Hazardous Waste Rules”).According to the regulations outlined in the Hazardous Waste Rules, persons engaged in the generation, processing, treatment, package, storage, transportation, use, collection, destruction, conversion, offering for sale, transfer or the like of hazardous waste management, must obtain authorization from the SPCB. Following a thorough review, the SPCB has the authority to issue a 5-year authorization to the applicant.Hazardous waste” inter-alia includes any waste which because of its physical, chemical, reactive, toxic, flammable, explosive or corrosive characteristics causes danger or is likely to cause danger to health or environment, whether alone or in contact with other wastes or substances.Given that an EV facility will handle hazardous waste during the disposal of batteries, it becomes imperative for an EV manufacturer to secure authorization from the relevant SPCB.

3. E-waste (Management) Rules, 2022 (“E-waste Rules”).As per the E-waste Rules, “e-waste” means electrical and electronic equipment, including solar photo-voltaic modules or panels or cells, whole or in part discarded as waste, as well as rejects from manufacturing, refurbishment and repair processes. The E-waste Rules strive to ensure that e-waste is recycled and reduced by channelling it to authorized dismantlers and recyclers to limit the toxicity caused by such material.The E-waste Rules apply to every manufacturer, producer, refurbisher, consumer, dismantler and recycler involved in the manufacture, sale, transfer, purchase, refurbishing, dismantling, recycling and processing of e-waste or electrical and electronic equipment listed in the E-waste Rules, including their components, consumables, parts and spares which make the product operational.Every EV manufacturer will need to ensure that e-waste generated by them, if any, is routed to an authorized collection centre, registered dismantler, or recycler or is returned to the pick-up or take-back services provided by the producers.

4. Battery Waste Management Rules, 2022 (“BWM Rules”)The BWM Rules have been notified by the Ministry of Environment, Forest and Climate Change on 22 August 2022. These rules apply to all types of batteries regardless of chemistry, shape, volume, weight, material composition and use. The BWM Rules require defined producers to collect and recycle/ refurbish batteries that they introduce into the market under an ‘extended producer responsibility’ (“EPR”) framework. The BWM Rules are intended to facilitate the interchange of EPR certificates between producers and recyclers to meet EPR responsibilities.

CONCLUSION

Due to the availability of government subsidies and tax advantages, as well as the growing affordability of EVs, consumers are choosing EVs over conventional internal combustion engine vehicles. The environmental impact of EV adoption and compliance with environmental regulations must be taken into account. As more manufacturers enter this market and as the number of users rises, the government must develop clear regulations regarding sustainability, e-waste disposal practices and environmental protection with regard to EVs.