New emission levy to drive up costs for used car buyers

Energy sector regulator, the ERC is set to bring into effect new motor vehicle carbon emission rules that could see the cost of popular used imported cars increase significantly beginning July.

The new levy comes in the form of carbon emission fees the ERC (Energy Regulatory Commission) plans to charge on imported vehicles that emit fumes beyond a yet-to-be determined level. Buyers of eco-friendly cars would be offered rebates.

The ERC’s feebates (fee/rebates) plan will require owners of cars with carbon emissions in excess of the benchmark to pay a fee on top of the purchase price.

Those whose emissions are below the benchmark would get a rebate depending on how far the emissions fall below the set limit.

“We are in talks with the Treasury and the Kenya Bureau of Standards (Kebs) to bring the regulations into effect in July,” said Peter Kaigwara, the ERC’s senior manager in charge of environmental health and safety.

Mr Kaigwara said that the National Transport and Safety Authority (NTSA) had agreed to widen its inspection of vehicles to include carbon emissions.

The agency will be required to establish testing centres where motorists can take their vehicles and know their emission levels.

Part of the plan is to help Kenya map and check its carbon footprint at a time when rising affluence is getting ever more cars on Kenyan roads.

The Kenya Motor Industry Association (KMI) data shows that new vehicle dealers sold 17,499 units last year up from 14,542 in 2013.

The ERC, however, said that the fees and rebates would initially apply on imported vehicles before spreading to all cars on Kenyan roads.

Kenya has since reduced sulphur levels in its fuel to below 500 parts per million (ppms) in line with the United Nations Environment Programme (Unep) recommendations.

The country also phased out poisonous lead in fuel a decade ago but has yet to decide on the level of exhaust emissions allowable for purposes of charging the fees and offering the rebates.

The Unep, which is partly funding the emissions reduction plan, has recommend 158 grammes of carbon dioxide per kilometre (gCO2/km) for Kenya — the same level as currently applies in Mauritius.

Kenya’s vehicles on average emit 180gCO2/km which the Unep considers too high. When the new rules come into effect, owners of vehicles that emit 180gCO2/km, will, for instance, be charged a fee for each of the 22 carbon units above the Unep’s benchmark.

Official records show there are about 2.02 million vehicles on Kenyan roads, growing at the rate of at least 10 per cent yearly or nearly double the country’s economic growth rate of 5 per cent.

There are, however, concerns that eco-friendly cars are expensive and would lock out aspiring buyers.

Mr Kaigwara said that owners of old vehicles would trade in their units by paying in some cash that can be used to compensate owners of eco-friendly cars.

The ERC’s initiative comes as the government moves to limit the age of imported second-hand cars from the current eight years to five years, seeking to ensure that only cars with new fuel-efficient technologies are shipped in.

If successfully implemented, Kenya will be among the few African countries, including South Africa, Egypt and Mauritius that have working emissions policies.

Denmark has a benchmark of 150gCo2/km with a feebate rate of $320 (Sh29,987) per unit exceeded or under-emitted, while Norway has set its limit at 120gCo2/km. Most European nations are turning to clean hybrid vehicles in their fight against carbon emissions.

The European Union (EU) has announced plans to cut car emissions to 95gCO2/km by 2020, driven by cleaner technologies.

READ: East Africa move to cleaner fuels to soak up new low-sulphur supplies

Environmentalists say only a combination of cleaner fuels, advanced car emissions control through modern engine technology, and an effective inspection and maintenance programme for motor vehicles can help a country to keep its towns clean.

“The push for eco-friendly cars that are fuel-efficient is a positive thing that also has the potential to save the economy millions of shillings in fuel expenses and reduced emissions,” said Gavin Bennett, a Nairobi-based motoring expert.

Mr Bennet, however, cautioned that attempts to reduce emissions on Kenyan roads will not achieve much until traffic snarl-ups in cities such as Nairobi are addressed.

“Exhaust fumes are more toxic during snarl-ups. Our priority should be to find a solution to the traffic congestion,” he said, adding that in the absence of eco-friendly technology the more fuel a car guzzles the more fumes it emits.

A vehicle moves when combustion takes place in the engine as a result of fuel combining with air to release fumes packed with carbon dioxide, carbon monoxide and nitrogen oxide, which can cause respiratory illness when exposed to for long.

Nitrogen oxide also endangers fish and plants when it combines with water to form nitric acid.

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