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Wednesday / 22 May 2024
HomeNewsGovernment to introduce rewards for buying electric cars and e-fuels

Government to introduce rewards for buying electric cars and e-fuels

Transport Minister Sindisiwe Chikunga has called for incentives to reward motorists who purchase vehicles that run on cleaner fuels, batteries, or hydrogen as a measure to reduce air pollution in the country.

There are approximately 12,969,430 vehicles on South Africa’s roads, 32% (4,158,818) of which are goods vehicles, which collectively contribute 95.7% of the country’s Greenhouse Gas (GHG) emissions, up from 91.2% in 2018.

Road transport is, therefore, the main contributor to GHG emissions in South Africa, with aviation, maritime, and rail transport combined accounting for less than 5%.

Green tax

The Department of Transport (DoT) is responsible for drafting policy and legislation that guides the planning and building of systems that tackle global transport externalities like GHG emissions.

However, Chikunga notes that many discrepancies exist between the needs of countries around the world, with vast differences between those of developed and developing nations.

As such, the local government may have to “improve the design of incentives to reward those whose transport production or consumption activities result in positive externalities,” she said.

“Taxes or subsidies are here imposed so that private costs absolve society’s full costs and benefits accruing from a transaction. Imposing taxes and subsidies, however, require lots of data towards establishing the true outcomes.”

Chikunga said that vehicle subsidies may be offered to buyers of “compressed natural gas (CNG) buses, electric, and hydrogen-run vehicles;” while fare subsidies are known to attract more numbers of commuters from the use of private cars.

Potentially, the policies could reduce the capital expenditure needed to purchase more eco-conscious vehicles as these tend to run at a premium when compared to more traditional internal-combustion-engine cars than only run on petrol or diesel.

They could also subsidise expenditure related to public passenger transport, and “modal subsidies for public transport buses, railways, and taxis may be offered,” said Chikunga

“It should be noted that to these ends we have already embarked on a process of developing and implementing a public transport subsidy whose benefits must accrue most importantly to the consumer of public transport,” said the minister.

Other proposed initiatives include setting fuel economy standards that capture the mileage traveled per unit of fuel consumed, or emission standards that limit the amount of exhaust gas a vehicle emits.

Fuel quality standards may also be instituted to limit polluting elements in a specific fuel, such as lead in gasoline and sulphur in diesel.

“These actions are intended to stimulate increased use of less intrusive transport modes when given subsidies,” concludes Chikunga.

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