Recycling Fee on Imported Vehicles: Good Idea, Hard Choices

Aliyu Umar Sadiq,

A recent announcement by the Nigerian Government to introduce a compulsory fee on imported used vehicles for their proper treatment and recycling at end-of-life (EoL) is a commendable step. The fee is meant to ensure that old vehicles, once they are no longer usable, are properly dismantled and recycled instead of becoming environmental hazards.

According to a press release by the National Automotive Design and Development Council (NADDC), this initiative could generate over ₦150 billion annually from 2026, while creating jobs and reducing the environmental impacts of imported vehicles. Although the economic potential sounds impressive, the real success of this policy should be measured by whether it actually prevents pollution caused by old vehicles at the end of their life. If implemented properly, this policy could mark a major turning point for Nigeria’s circular economy.

However, poor implementation could easily undermine its purpose. End-of-Life Vehicles (ELVs) contain valuable materials such as metals, plastics, and reusable parts. At the same time, they also contain hazardous substances like oils, batteries, and heavy metals. Most imported second-hand vehicles eventually reach their end of life after a few years of use because they are already old before being imported.

When these vehicles are not properly managed at the end of life, they can create serious environmental and public health problems. Nigeria is already facing significant environmental pressure from poorly managed vehicle waste and emissions from aging vehicles. Unfortunately, many vehicles that should already be classified as EoL are still on Nigerian roads, contributing heavily to air pollution. This is partly because some imported vehicles are already considered unroadworthy in their countries of origin but still enter Nigeria through weakly regulated or illegal routes.

A study by the European Environmental Bureau (EEB) shows that Nigeria is the largest destination for imported used vehicles in Africa, many of which come from the European Union. These imports also have significant economic value. Data from Nigeria’s National Bureau of Statistics (NBS) shows that used vehicle imports were valued at ₦169 billion in the first half of 2022 alone.

While used vehicles provide affordable transport and economic benefits, it is equally important to prevent long-term environmental damage.

Stop Near-End-of-Life Vehicles at the Border

Although many vehicle components can be reused or recycled, some materials are not recyclable or are not economically valuable. These materials often end up dumped or sent to landfills. A clear example is used lead-acid batteries (ULABs).

Nigeria generates about 110,000 tonnes of ULABs every year from vehicles and renewable energy systems, yet only about 13% is properly recycled. The rest poses serious risks to human health and the environment. This shows that recycling alone is not enough. Preventing waste at the source is just as important. While the proposed recycling fee is a positive move, an even more critical step is for the Nigerian Government to address the importation of fully or near end-of-life vehicles in the first place. Many vehicles exported to Nigeria no longer meet roadworthiness standards in Europe and other regions.

Nigeria has taken a step in the right direction with the Vehicle Identification Number (VIN) valuation system, which restricts imports to vehicles that are more than nine years old. However, weak enforcement remains a major challenge. If Nigeria is serious about reducing vehicle waste, existing regulations must be strengthened and properly enforced. Improving the quality of imported used vehicles is one of the most effective ways to reduce future EoL vehicle waste and its environmental impacts. This is a more impactful circular economy approach.

ELV Fees Must Build Infrastructure, Not Just Revenue

The proposed recycling fee follows models already used in countries such as the Netherlands and Belgium, where vehicle recycling fees are used to fund functional and efficient recycling systems. For example, the Netherlands established Auto Recycling Nederland (ARN) in 1995. ARN coordinates vehicle collection, dismantling, and recycling through a nationwide network of licensed facilities. Because the necessary infrastructure exists, the country now achieves very high ELV recovery rates.

In Nigeria, however, formal vehicle recycling infrastructure is still largely absent. This raises a key question: will the proposed fees be used to build vehicle dismantling plants, recycling facilities, and vehicle tracking systems? Before nationwide implementation, the government should develop an effective operational strategy and feasibility assessment of the proposed plan with actual realities of the country.

A pilot phase with robust feedback from stakeholders would be a more responsible approach before a full blown implementation. This would help ensure that the fees do not simply increase vehicle costs for Nigerians without delivering real environmental benefits.

Who Manages the Money?

This is where Extended Producer Responsibility (EPR) becomes essential. EPR is a policy approach that makes producers and importers responsible for what happens to their products at the end of their life. Nigeria already applies EPR to electronics, tyres, and plastics. Vehicles should not be an exception.
In countries with successful systems, producers and importers operate through a Producer Responsibility Organisation (PRO). These organisations collect fees, track vehicles throughout their life cycle, and ensure proper end-of-life treatment through certified facilities.

For Nigeria, this means establishing a vehicle-specific EPR system with clear roles, transparency, and accountability. Enforcement must also go beyond major ports like Lagos to cover illegal and informal import routes, which currently undermine regulation.

Integrating the Informal Recycling Sector

One of Nigeria’s biggest strengths is also one of its biggest policy blind spots: the informal scrap and auto-parts sector. For decades, informal mechanics and dismantlers have recovered reusable parts and materials from old vehicles. Ignoring this sector would weaken the system. Instead, Nigeria should adopt a locally adapted, hybrid model that integrates informal actors into the EPR framework. Doing so can protect livelihoods, improve material recovery, create jobs, and strengthen environmental outcomes.

A Promising Step That Requires Careful Planning

The NADDC’s announcement is a positive signal of Nigeria’s commitment to circular economy principles in the automotive sector. However, success will depend less on how fast the policy is implemented and more on careful planning, strong enforcement, infrastructure development, and transparency.

If implemented properly, Nigeria’s ELV programme can reduce environmental harm, create jobs, and unlock real economic value. If not, it risks becoming another policy that increases costs for Nigerian citizens without solving the problem it was meant to address.

Author’s bio

Aliyu Sadiq is a Circular Economy Specialist with extensive experience in research, policy advocacy, and the development of innovative solutions for sustainable waste management and resource efficiency. He is currently a postgraduate student at the University of Manchester under the European Union ERASMUS mundus scholarship.

He is the Co-Founder of the Ecocykle, an environmental organization in Nigeria. Previously, Aliyu served as a Visiting Researcher at the European Environmental Bureau (EEB). His work bridges environmental policy, practice, and innovation, with a vision to address pressing environmental and resource challenges while delivering sustainable socio-economic impact. He can be reached at: [email protected]