Rwanda: Experts Weigh in on Proposal to Raise Tariffs on Fossil Fuel-Powered Cars

Increasing taxes on personal fossil fuel driven cars in order to deter the public from using them should be well studied before being implemented, climate change experts have suggested.

The reactions follow a recommendation contained in the State of Environment and Outlook Report 2021 released last week by Rwanda Environment Management Authority (REMA).

The report says that huge tariffs on the use of personal fossil fuel driven cars can deter the public from owning and using fossil fuel driven cars.

The recommendation is based on the fact that the transport sector remains a major source of air pollution, contributing 40 per cent of total emissions in Rwanda, especially in urban areas like the city of Kigali.

According to REMA, the main contributors to air pollution linked to transport are the old and used motor vehicles imported with poor or degraded emission control technology.

Vehicles manufactured before 1999 contribute 58 per cent of nitrogen oxides toxic gas emissions and 66 per cent of inhalable particles emissions that cause respiratory diseases.

Between 2017 and 2019, Rwanda recorded only 0.6 per cent progress in reducing mortality related to air pollution.

The outlook report has recommended to enforce bus dedicated lanes, according to plans and emphasise the use of public transport during peak hours.

It also recommends the use of public transport for government institutions.

There is a need for developing policy instruments to support the reduction of emissions from the transport sector which could also discourage the use of personal fossil fuel driven cars.

Speaking to Doing Business’ Faustin Vuningoma, the Coordinator of Rwanda Climate Change and Development Organizations Network, recommended that the government streamlines public transport system which could discourage the public from using personal fossil fuel driven cars.

“We still have an ailing public transport system. It should first be streamlined before discouraging personal fossil fuel driven cars by increasing taxes,” he said.

He said that the public transport system needs to be fixed and reduce so many hours that commuters spend on long queues waiting for buses.

“There is a need for a system where you move from your location knowing exactly when the bus will arrive without delay,” he noted.

He added that the public transport operators should also invest in increasing big buses that can transport many people at once.

“If the public transport system works well on roads dedicated to only public transport, people would prefer it because it is cheaper instead of personal driven cars,” he said, adding that smart public transport should work in all parts of the country.

Engineer Charles Mugabo, a Climate Change Expert, said that people could give up using personal fossil fuel driven cars, “only if it is coupled with heavy duties on consumables of personal cars like fuel, spare parts and tyres,” he added; “Increasing taxes on personal fossil fuel powered cars cannot work before an efficient public transport system is in place.”

Mixed reactions

Egide Kalisa, a Climate Change Researcher, argues that huge taxes on personal fossil fuel-driven is still too early for Rwanda considering that there are still few electrical cars / buses currently on the road in Rwanda, charging stations and other needed infrastructure.

“Effort is required for the quality of fuel imported instead. We need to first understand how much fossil fuel cars contribute to air pollution in Rwanda, what type of cars from buses, small cars, to big cars, ages of car, car maintenance, driving behaviour and others,” he said.

Mugabo said that air pollution from the transport sector is prevalent in Kigali city.

“Rwanda’s urban population aims to reach 70 percent by 2050 and we have to expect increasing demand for transport & cars. There are effective solutions that can be adopted rather than putting huge tariffs on the use of personal fossil fuel-driven cars, which is not appropriate until other congestion management strategies have been optimized,” he said.

He said that multiple measures can be taken to increase road capacity and reduce traffic

The measures, he said, can also include increasing infrastructure for active transport such as walking and cycling.

“Maintenance, testing and enforcement of the existing vehicle stock would do the most to reduce air pollution. A focus on reducing emissions from older, larger, diesel vehicles that are poorly maintained would reap the biggest dividends,” he said.

Targets in electric vehicles adoption

Current efforts towards smart transport systems need to be enhanced through electrification of both road and rail transport systems, the outlook report has recommended.

“An enabling environment policy that promotes electric vehicles while discouraging fossil fuel powered vehicles is necessary,” it says adding the construction of electric car charging points need to be facilitated.

In 2018, the first electric motorcycles and cars were introduced to the Rwandan market through electric mobility initiatives.

In April 2021, an electric mobility strategy that contains tax incentives for electric mobility inputs, lower electricity tariffs and other incentives was also introduced.

Electric vehicles will benefit from a reduced tariff during the off-peak time while electric vehicles, spare parts, batteries and charging stations have to be treated as VAT zero rated products.

There is also exemption of import and excise duties and withdrawing tax at customs of five percent.

According to the ministry of environment, total Adoption of electric vehicles and related solutions in Rwanda will require up to $900 million.

Studies show that electric vehicles could save Rwf20 billion on fossil fuel importation by 2025.

Currently, Rwanda has 221,000 registered vehicles consisting of 52 percent of motorcycles and 38 percent passenger vehicles, of which at least 30,000 are in Kigali.

The number of electric vehicles is increasing by almost 12 percent per year and the fuel import bills are approximately 12 percent of total imports.

According to the ministry of environment, low-carbon climate-resilient energy and transport systems require $6,875 million from public sector funding and $3,400 million in private sector investment by 2050 as a long-term transition.

BRT system under development

In the next 10 years, Rwanda targets to convert 20 per cent of the fleet for Kigali Bus Rapid Transit (BRT), bus services to electric at the cost of over $1 billion and 33 percent of motorcycle operations.

In order to streamline public transport with solutions, Authorities in the city of Kigali have disclosed that the road from the city centre to Kigali International Airport will soon be used to pilot the BRT system as a way of reducing traffic congestion.

The BRT is a bus-based public transport system designed to have better capacity and reliability than a conventional bus system.

The system could encourage more public to avoid using personal driven cars according to developers.

Mérard Mpabwanamaguru, the vice mayor in charge of urbanization and infrastructure in the City of Kigali told The New Times the feasibility study been conducted and recommended to start with Dedicated Bus Lanes (DBLs) and later be converted into a full bridged BRT system.

“We completed the pilot study in the road City Centre-Giporoso carpark, and we are dealing with the World Bank so that we can get some finances and start the construction activities.

For the smart bus stops, we are starting very soon, and we have entered an agreement with the partner, and together with him we are going to make sure we have 32 bus smart shelters by this year in the major city corridors,” he said.

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