African Focus Harnessing Tax Incentives to Accelerate E-mobility in Africa by David Omata March 8, 2024 Published by David Omata The transport sector remains a significant emitter of greenhouse gasses, responsible for approximately one-quarter of global emissions. Despite efforts to transition to cleaner energy sources, the fact sheet on climate change has shown that 95% of the world’s transport energy still relies on fossil fuels. The fact sheet also reveals that in 45% of countries, transport is the largest source of energy-related emissions; in others, it ranks as the second largest. The transport sector accounts for 57% of global oil demand and 28% of total energy consumption. In Africa, transport emissions are fast increasing from a low baseline. Between 2010 and 2019, Africa experienced a 27% increase in transport emissions, ranking second only to Asia (41%) according to the data from the SLOCAT partnership on sustainable low-carbon transport. The global target for a 60% share of battery-electric and plug-in hybrid vehicles by 2050 could save more than 60 billion tons of CO2 emissions. As the global transition towards electric vehicles (EVs) gains momentum, African nations must intensify their decarbonisation efforts in the transport sector through collective efforts against climate change to accelerate the adoption of EVs. This commitment is reflected in implementing policies centred on tax incentives and waivers to promote the uptake of electric vehicles across the continent. Overview of Countries’ E-mobility Tax Policies In a bold move towards sustainability, Ghana’s 2024 budget speech unveiled a series of tax incentives to promote the adoption of electric vehicles (EVs). These measures, including the waiver of import duties on electric vehicles for public transportation and incentives for registered EV assembly companies, mark a significant step towards reducing emissions and addressing traffic congestion issues in the country. The decision to waive import duties on electric vehicles for public transportation for eight years, coupled with similar incentives for locally assembled EVs, demonstrates Ghana’s commitment to fostering a greener transportation ecosystem. By extending the zero VAT rate on locally assembled vehicles, the government encourages domestic manufacturing and paves the way for sustainable mobility solutions. Ghana’s initiative reflects a broader trend across Africa, where several countries have taken steps to reduce or eliminate import duties and taxes on electric vehicles. From Tunisia to Kenya, Uganda, and other African countries, their governments recognise the importance of incentivising EV adoption to combat climate change and promote sustainable development. Tunisia’s 2023 financial act reduces customs tariffs on electric car charging equipment to 10% and lowers value-added tax to 7%. The Tunisian Ministry of Environment anticipates that these efforts will deploy 50,000 electric vehicles by 2025. According to the Ministry, this project is expected to dramatically reduce oil usage (5.9 million barrels) and fossil fuel imports by US$660 million between 2020 and 2030. These incentives indicate Tunisia’s commitment to sustainability and are consistent with broader efforts throughout Africa to promote environmentally friendly transportation options. The Kenyan government has unveiled plans to reduce excise duties on electric vehicles (EVs) from 20% to 10% to encourage the manufacturing of EVs within the country. Additionally, the Energy and Petroleum Regulatory Authority has implemented measures to regulate the price of charging stations nationwide. Lowering the taxes on EVs and regulating charging station prices will encourage investment in EV technology and infrastructure while addressing concerns about affordability and accessibility. Uganda’s 2023/2024 budget included several tax reforms, including eliminating import tariffs on electric vehicles (EVs) and hybrids, including electric motorbikes. This strategic initiative, as detailed in a paper by the Uganda Revenue Authority (URA), is based on encouraging the use of electric vehicles and reducing pollution. The tax breaks are intended to accelerate the transition to cleaner transportation choices, demonstrating a commitment to environmental sustainability and harmonising with global initiatives to promote greener practices in the car industry. According to Ethiopia’s current e-mobility policy, all-electric vehicles are now exempt from VAT, excise tax, and surtax. The only remaining tax is the customs tax, which has been reduced to 15% for fully assembled vehicles and 5% for semi-assembled ones. Completely knocked-down (CKD) vehicles assembled within Ethiopia are exempt from taxation. The Ministry of Transport and Logistics established charging stations in three locations within Addis Ababa before transferring the responsibility to the private sector. ConclusionAs Africa grapples with urbanisation, population expansion, and climate change challenges, the transition to electric cars appears as a critical potential for transformation.Africa can chart a course for a more sustainable and prosperous future through innovation and collaboration. The current development regarding tax incentives from several African countries is welcoming; however, it is critical to emphasise that increasing EV adoption necessitates comprehensive policies that promote equity for all and tax breaks. Supporting local entrepreneurs, increasing access to financing, and building technical expertise are critical activities for maximising the benefits of electric mobility throughout society. Tax incentives are essential for increasing electric car use in Africa, increasing the momentum toward greener transportation alternatives. With creative policies and strategic investments, Africa can lead a long-term mobility revolution to benefit current and future generations. We look forward to seeing these initiatives in Africa as we reach the net zero target. March 8, 2024 0 comments 0 FacebookTwitterPinterestEmail
African Focus Balancing Electric Vehicle Charging Stations and Community Power Needs in Africa by David Omata November 27, 2023 Published by David Omata The rise of electric vehicles (EVs) presents a promising solution to mitigate the environmental impact of traditional fossil fuel-based transportation. As of 2022, more than 10 million EVs were already manufactured and sold. In the first quarter of 2023, only about 2.3 million EVs were sold. Based on this current trend, the International Energy Agency (IEA) has projected that EVs would avoid about 500 million barrels of oil daily by 2030. However, as the adoption of EVs increases, so does the demand for energy to power charging stations. In developing countries, particularly in Africa, the challenge lies in finding a balance between catering to the growing electric mobility sector and addressing the broader energy needs of communities. This essay explores the implications of establishing EV charging stations in developing African nations, examining the potential conflicts with overall energy requirements and proposing strategies for sustainable energy infrastructure. Challenges of EV Charging Stations in Developing Countries Energy Competition: The demand for energy from EV charging stations could potentially compete with the energy needs of communities, where access to reliable electricity is often a challenge. In many African nations, a significant portion of the population lacks access to basic electricity, making it crucial to prioritize energy allocations for essential services, industries, and residential areas. For electric vehicle charging stations, reduced capacity Single phase loads, or Level 1 and Level 2 chargers, are most frequently found in residences, parking lots, and commercial fleets. Their average loads range from 2 to 4 kVA. An EV can be efficiently charged in 10–20 minutes using a level 3 charger, often between 200 kVA and 500 kVA. Infrastructure Limitation: Developing countries face infrastructure limitations that impact the establishment of robust electric grids. Insufficient grid capacity and unreliable power sources can hinder the integration of widespread EV charging infrastructure, raising questions about the feasibility and sustainability of such projects. As of 2022, there were about 2.7 million charge stations globally, with more than two-thirds of them in China, with the projection of about 17 million charge stations by 2030. In Africa, only a few countries, such as South Africa, Morocco, and Rwanda, have taken major steps to invest in e-mobility startups with support from private institutions. Financial Barriers: The financial burden of setting up charging stations may divert resources from broader energy development initiatives. Developing countries often grapple with limited budgets, and prioritizing between expanding energy access for communities and investing in EV infrastructure becomes a delicate balancing act. Audi recently started the construction of 33 units of 150kw EV charging units in South Africa. Jaguar has also partnered with Gridcars to launch 88 charging stations nationwide. Total Energies is also working with Ampersand, a Kenyan-based startup, to launch EV charging stations across several points in Kenya. The government’s role in promoting the e-mobility market in Africa is important because it has the power to propel the widespread installation of level 3 charging stations across several cities, even though all of these collaborations contribute to e-mobility’s success in Africa. Strategies for Sustainable Energy Development Integrated Energy Planning: Governments and energy authorities must adopt integrated energy planning approaches that consider the needs of both EV infrastructure and community energy requirements. This involves assessing current energy consumption patterns, identifying high-impact sectors, and strategically allocating resources to balance the interests of different stakeholders. Renewable Energy Integration: Leveraging renewable energy sources, such as solar and wind, for EV charging stations can alleviate the strain on traditional power grids. Implementing decentralized, off-grid charging solutions can be particularly beneficial, especially in semi-urban areas and subsequently to rural communities. Public-Private Partnerships: Collaboration between governments, private sector entities, and international organizations can facilitate the development of sustainable energy infrastructure. Public-private partnerships can attract investments, drive innovation, and accelerate the deployment of EV charging stations while ensuring that community energy needs are addressed. Incentivizing Energy EfficiencyImplementing policies promoting energy efficiency in EV technologies and community power systems can be instrumental. Incentives for adopting energy-efficient appliances, practices, and technologies can reduce overall energy demand, making accommodating the needs of both EVs and communities easier. ConclusionIn less developed nations, especially those in Africa, the switch to electric vehicles may not be an easy transition process as it necessitates carefully weighing the benefits and problems that are associated with it. Sustainable development requires striking a balance between the energy requirements of communities and the energy demand for EV charging stations; this becomes a case of a scale of preference and opportunity cost to be dealt with. These countries may steer toward a future where electric mobility coexists peacefully with the more extensive energy needs of their populations by means of integrated planning, renewable energy integration, public-private partnerships, and energy-saving incentives. African countries may leverage the potential of electric vehicles to boost economic growth, reduce their impact on the environment, and enhance the general quality of life for their population by carefully addressing these issues. November 27, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch Advancing E-mobility in Nigeria: Overcoming the Hurdles by Doose Iortyom November 27, 2023 Published by Doose Iortyom The International Energy Agency (IEA) posits that the transport sector is one of the dominant carbon emitters. The energy transition plan also highlights the substantial contribution of the transport sector to total emissions, accounting for over 40%, the second-largest after the power sector. Consequently, the ETP proposes a shift from diesel/petrol vehicles to hybrid and electric vehicles (EVs) as a strategy to decarbonize Nigeria’s transport sector. This article sheds light on the actions and policies to materialize this objective. Electromobility, or e-mobility, encompasses electric cars, bikes, pedelecs, e-buses, and trucks—all of which operate fully or partly on electricity and draw their energy primarily from the power grid. EVs produce less greenhouse gases than internal combustion engines such as gasoline and diesel-powered vehicles. Integrating electric vehicles into public transportation could provide commuters with clean, affordable, and convenient options. This approach would reduce emissions and demonstrate the viability of EVs to the general public. For example, in a city like Lagos, Nigeria, with a relatively large stock of mini-buses for public transit, the bus fleet’s electrification could yield more benefits than other types of vehicles. Electric Vehicles (EVs) are poised to become increasingly common on global roads. Several countries, including Norway, Iceland, Sweden, the Netherlands, and China, embrace e-mobility. Recently, Ford Motors announced that it was investing R5.2 billion into its South African Silverton production plant. They will start producing the first-ever Ranger plug-in hybrid electric vehicle, targeting energy self-sufficiency by 2025. The Federal Government’s strategies thus far Nigeria recognizes the role of EVs in the journey to net zero. This is evidenced by the launch of Nigeria’s first Electric Vehicle in June 2021. Earlier in the year, the Governor of Lagos State, Babajide Sanwo-Olu, informed us about delivering the country’s first set of electric buses. Another Progress made towards advancing E-Mobility in Nigeria is the establishment of commercial charging stations for electric vehicles. Efforts are also under full swing to frame a policy for implementation. The National Automotive Design and Development Council (NADDC) revealed in July 2023 that their Electric Vehicle Development Plan has entered the final stages for ratification and implementation. Possible challenges and solutions Despite the recent progress on EV deployment, reaching a trajectory consistent with climate goals is a formidable challenge, especially for Nigeria. The commercialization of EVs in the country will require that fundamental issues be dealt with. In Nigeria, more than half of grid-connected customers suffer frequent power outages that last several hours or days. To promote e-mobility, the power grid must be stabilized and strengthened to support the increased electricity demand from EVs. Additionally, alternative solutions like solar-powered charging stations could be explored. Furthermore, Public EV charging infrastructure is at its nascent stage in Nigeria. Charging stations are a fundamental composition of an enabling environment where the EV industry can thrive. Charging infrastructure is vital to address “range anxiety,” which is referred to as a fear that the vehicle may run out of power before reaching a charging point. Installing charging stations, particularly in urban areas, is a priority, but the costs and logistical challenges are substantial. These charging infrastructures create more surges in electric load growth, and today’s grid is not equipped to meet this demand for power. To fully enable the EV revolution and decrease emissions from the transport sector, we need faster and smarter grid planning. The comparatively high cost of electric vehicle assembly is a massive deterrent. In Nigeria, the current Tesla line (Model S, Model X, Model 3) ranges from N16 million to N58 million at the current exchange rate without customs. The recent reports by the Nigerian Bureau of Statistics state that half the population’s income remains at $1 per day or less. For many Nigerians, affordability is farfetched. Hence, policymakers in developing countries will need to improve their economy and foster accessibility through incentives and subsidies to lower the initial costs of EVs. These actions will encourage potential buyers to consider the eco-friendly option. Other key issues to be addressed are creating policies and regulations that align with global best practices and addressing the battery recycling challenge. conclusion Finally, the shift towards cleaner transportation systems may cause dire economic implications. Nigeria is a petroleum-dependent country, and a shift to electric vehicles could reduce oil demand, potentially affecting the country’s revenue. The government needs to plan for this economic shift by diversifying the economy through investments in agriculture, sustainable energy sources, and the promotion of manufacturing. Advancing E-mobility in Nigeria is a formidable task with several hurdles to overcome. There is no ‘one-size-fits-all’ approach to EV deployment. However, tackling the issues highlighted above and seizing the opportunities presented by E-mobility solves the dual challenge of reducing emissions and creating economic opportunities that drive technological innovation in the country. November 27, 2023 0 comments 0 FacebookTwitterPinterestEmail
