Transport leaders from around the world have met for the first time to discuss the flood of non-fuel efficient and unsafe secondhand vehicles into developing countries, and taken the first steps toward agreeing voluntary regulations and standards on the often secretive trade.
At a side meeting in Geneva — organized by the Inland Transport Committee, which is part of the the United Nations Economic Commission for Europe (UNECE) — delegates from 90 nations, including approximately 30 developing countries, gathered to share information.
The Geneva meeting marked the first of its kind, according to Rob de Jong, head of transport at the U.N. Environment Program. There are currently no regional or global agreements that rationalize and govern the flow of secondhand vehicles.
“The international community … do not currently address the question of used vehicles and the implications of used vehicle flows both for local pollutants and health and global emissions that contribute to atmospheric warming,” de Jong said.
And while no concrete agreements were reached during the event, de Jong said he was pleased by the turnout and tenor of the discussion, and was optimistic they will be reached in the future. He also said the topic will now be taken to higher, ministerial levels within the UN, including at the third meeting of the UN Environment Assembly, taking place in December at UNEP’s headquarters in Kenya.
“This was the first ever meeting to discuss this issue between different regions, and there were a number of issues raised which we had not expected to come up so strongly … it is safe to say we will be following up on this issue in multiple ways,” he said.
Experts predict the number of vehicles in developing countries will increase four- or five-fold by 2050. The majority of these will be second hand — the trade in used cars grew by 14.4 percent between 1997 and 2007, from 1.24 million to 4.7 million, according to a report by the Global Fuel Economy Initiative. These are just estimates however, since the industry is difficult to accurately track, with many vehicles being shipped to Dubai and then re-exported to developing countries.
Car ownership in Africa is increasing and it is now the biggest importer of used vehicles. Out of 54 countries on the continent, 27 countries do not place any restrictions on the age or quality of cars being received at the ports. 99 percent of all cars imported to Kenya are second hand, mainly shipped from Japan and Europe, according to UNEP figures.
In Latin America and the Caribbean, used vehicles are mostly imported from Japan, the U.S., Thailand, the U.K. and Germany. While several countries now ban the import of used cars, others, such as Costa Rica, have no restrictions in place. In 2015, 30 percent of all cars imported were second hand.
Mexico has traditionally been a major importer of used cars, mainly from the U.S., but is now making efforts to promote the sale of locally manufactured cars. This led to a reduction in used-car imports from 1.6 million in 2006 to 180,000 in 2015, according to the Mexican Automotive Industry Association.
The Asia Pacific region has the highest rates of motorization in the world, and Japan is the world’s biggest exporter of used cars, shipping approximately 1 million to other countries every year, while India and China have also started exporting cars. Bangladesh, Hong Kong, India, Malaysia, Nepal, Pakistan, Philippines, Singapore, and Sri Lanka allow the importation of used vehicles to varying degrees and with different restrictions in place.
Secondhand cars offer an affordable way for people living in developing countries to become mobile, which studies show leads to increases in gross domestic product. However, while many imported vehicles meet high emission standards, and thus have the potential to lower the impact of road transport in terms of CO2, the majority do not. Furthermore, used cars tend to be worse for the environment than newer ones due to declining fuel efficiency levels as they age. For example, the average age of a car imported to Uganda is already 16.5 years and it will likely be driven for another 20 years.
As well as contributing to climate change, the transport sector is responsible for up to 80 percent of urban air pollution in most cities, which the World Health Organization says causes the premature death of 7 million people every year, largely due to fine particles — also known as particulate matter — entering the bloodstream through the lungs.
Different options for regulating the flow of secondhand vehicles
Much of the discussion in Geneva focused on how to regulate the flow of cars from one country to another, de Jong said. Currently, some countries apply a range of different regulatory measures, while others leave the industry relatively unchecked. For example, in some cases, age restrictions are applied to all cars being imported — the most common cut off age being five years, but some countries allow cars as old as 12 to enter their ports.
Other countries apply higher import taxes to older cars, making them less desirable to import, and others have all out bans on secondhand vehicle imports, including South Africa, Argentina, Indonesia, Chile, Turkey, and Brazil.
Sri Lanka is one of the most progressive countries when it comes to regulating the secondhand car trade, banning all cars older than three years from entering the country, said Dr. Sugath Yalegama, additional secretary at the country’s Ministry of Sustainable Development and Wildlife. This is coupled with high import tax rates for diesel and older cars, which receive levies ranging from 150 percent to as much as 250 percent, while hybrid cars are taxed at between 70 to 150 percent, and electric cars are subject to 30 to 50 percent combined tax rates. Applying this sliding scale tax approach is an example of “using financial incentives to leapfrog to clean technologies,” de Jong said.
Sri Lanka also imposes strict regulations on emissions, abiding by emission standards set by the European Union in 2000 — known as Euro 3 — but in the future it plans to go further, Yalegama said. On average the country imports 35,000 used cars per year, the vast majority from Japan.
Yalegama put Sri Lanka’s relative success in regulating the field down to the commitment and forward thinking of government officials, high fuel import prices, and the fact that Sri Lanka is a small country.
“It was clear from the meeting that we are far far ahead of other countries and I was delighted to find that. We had a very dedicated group of officers who really fought very hard with businessmen and vehicle importers to put these standards in place and that is really quite impressive,” he said.
The Geneva meeting revealed a negative mindset among officials from other countries, he said, which will need to change if they are to improve the quality of their fleet and prevent their cities from becoming more congested.
“The only way to improve transport options for people is to improve public transport, importing more cars is not moving in the right direction. Governments need to change their mentality and make up their minds up to it, otherwise they won’t get rid of this problem,” Yalegama said.
Enforcement is a challenge
Applying performance, safety and emissions standards to all cars exported is another way of regulating the flow, but enforcing such restrictions is also a challenge, meeting participants said.
Part of the problem is that buyers in developing countries often make purchases through online dealers, and as a result often have poor access to verified and detailed information about the vehicles.
Being able to access more detailed information will not only enable buyers to ensure the car they are purchasing is safe and not in breach of accepted pollution levels, but also to ensure the running costs are low, which is especially important to owners in developing countries, de Jong said. As a result, delegates discussed potential ways of influencing dealers to provide more detailed labelling and information about their cars’ emissions and performance levels, he said.
Some cars are being tampered with
There is evidence that European exporters, for example in Germany, are not carrying out vehicle checks, nor are cars being checked on the receiving side, according to Georg Mehlhart from the Institute for Applied Ecology in Germany, who was also at the meeting.
According to Mehlhart, it is common for exported cars to have ineffective exhaust systems — they are expensive to replace, so dealers often prefer to ship the cars overseas where they know they will not be checked, he said. There are even cases where the catalytic converters have been deliberately removed so that the platinum inside can be sold on before the car is exported, he said, which drastically increases the car’s emissions.
End of life policies for used cars is not as urgent as initially thought
The number of old cars going to developing countries has led to concerns about how to safely dispose of the vehicles and their parts, especially lead-acid batteries and other hazardous materials. However, at the meeting, participants learned that very few car parts are actually going to scrap, but are instead being recycled. Only a handful of cars are actually “end of life” vehicles in the traditional sense. For example, in Ghana and Egypt, the mechanical parts are sold on and used in other cars, steel is ripped out and sold to dealers, car seats are used in playgrounds, Mehlhart said.
However, while it is encouraging to know car parts are being recycled, it is still important to know more about how they are being repurposed, and whether it is being done in a safe and non-polluting way, de Jong said.
Regional, not global level monitoring is needed
For Mehlhart, the onus for monitoring and enforcement should lie with the exporting country authority and not the importing one as is currently the case.
“Right now you can export whatever you want and the authorities have to prove it’s scrap — I would reverse this and put the onus on the exporter to supply paperwork to prove that the used vehicle can safely and efficiently run for a certain time before it can be exported,” he said.
All the countries represented agreed that increased monitoring of trade flows in secondhand cars was needed, both on the importing and the exporting side. But due to the different levels of current regulation between individual countries, they agreed a regional rather than global approach will be more effective.
“There are many different policies around but it’s piecemeal and not harmonized, we hope soon to see countries who are currently not imposing any regulations start picking up the issue and regions harmonizing how they approach it,” de Jong said.
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