India's vehicle scrappage policy is creating a new carbon credit stream from end-of-life vehicles. When a car is scrapped at a registered facility, the recycled metals avoid emissions from mining and smelting. Those avoided emissions can now be verified and traded under India's Carbon Credit Trading Scheme, which is set to begin formal trading in mid 2026. The Indian Carbon Market portal is already open for registration. Corporate buyers including OEMs, fleet operators, and ESG investors can use these credits to address Scope 3 emissions. Each credit is traceable to a specific vehicle scrapped at a specific facility on a specific date. NITI Aayog projects nearly 50 million end-of-life vehicles by 2030, but only about 3 percent have been processed through registered facilities so far. That leaves a large pool of unclaimed emission reductions.
