Global South nations risk becoming dumping ground for used vehicles: Carbon Tracker

Nations in the Global South risk becoming a dumping ground for used internal combustion engine (ICE) vehicles, unless governments adopt policies to seize the benefits of the electric vehicle revolution, warns a report from the financial think tank Carbon Tracker published on Friday.

If governments in the Global South lock themselves into using ICE vehicles, they will remain dependent on fossil fuel imports.

Currently, nations in Africa spend $80 billion a year on transport fuels, 2.5 per cent of the continent’s GDP.

But countries can break this dependency by setting policies that support a move to fully electric battery-powered vehicles (BEVs).

This shift would save nations in Asia, Africa, and South America over $100 billion annually on fuel imports, cut their trade deficits, end their dependency on offshore refining, and create new jobs in industries of the future.

The nations which lack refining capacity to meet domestic transport fuel demand experience significant capital and foreign exchange outflow.

If countries pivot their fleet to electric, these vehicles could be powered inexpensively using domestically generated renewable power, assuming the correct policy environment and industrial strategy is in place.

Ben Scott, Senior Automotive Analyst at Carbon Tracker and author of the report, said: “The Global South’s reliance on internal combustion engine vehicles, and dependency on fossil fuels, holds back the region economically. They can boost their domestic economies by incentivising a shift to electric vehicles and kick start a positive cycle that brings faster electrification, a smart grid, and increased production and use of renewable energy. All these changes will reduce dependence on foreign nations.”

The new report, Driving Change: How Electric Vehicles can rise in the Global South, recommends several policies governments can use to incentivise a shift to BEVs and creation of a domestic BEV sector — used car import bans, age restrictions, emission standards, age-based excise duties, eliminating tariffs on electric cars and supporting domestic production and sales and recycling of BEVs.

The report highlights how a switch to BEVs can open new economic opportunities in the BEV value chain, including mineral mining, manufacturing, sales, logistics, servicing, infrastructure creation, and material recycling.