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In the past month, Parlament passed the national budget for 2023-24. The budget saw a lot of 'firsts' in it, one of them being the introduction of carbon tax.
CARBON TAX: Under the carbon tax that became effective from July 1, 2023, anyone who owns more than one car in Bangladesh will have to pay an environmental protection surcharge from Tk 25,000 to as much as Tk 3.5 lakh. The amounts will vary depending on the engine capacity. For example, owners of cars, be it an individual or company, with engine capacity of up to 1,500cc will pay Tk 25,000 in surcharge for every second and subsequent vehicle after the first one. This amount will double to Tk 50,000 for any vehicle with engine capacity ranging from 1501cc to 2,000cc.
An owner of every second car with a capacity of 2,001cc to 2,500cc will have to pay Tk 75,000 as the environmental protection surcharge. Any one owning second or third cars with over 3,000cc engine capacity will have to pay a surcharge of Tk 200,000 while owner of second cars with engine capacity of 3,500cc and above will have to pay a surcharge as high as Tk 350,000.
MOVING TOWARDS 'CLEAN ENERGY': Introduction of carbon tax by the government is quite commendable as Bangladesh does not need to take drastic measures towards achieving a net zero emission goal by 2050, unlike other countries, as carbon emission in the country is still very low. Additionally, Bangladesh has recently promised to have 40 per cent of the country's energy from clean sources by 2041. A big part of this will be generated through nuclear energy and new technologies, as pointed out by Towfiq-e-Elahi Chowdhury, energy advisor to the prime minister, at the second stakeholders' meeting on Integrated Energy and Power Master Plan (IEPMP), this past week.
As the chief guest on the occasion, Chowdhury stressed that Bangladesh promised to have 40 per cent of the country's energy from clean sources by 2041, not from the renewable sources. "Nuclear energy is a significant part of the clean energy future. There is far less carbon emission from solar energy. Along with that, new technologies will be our priority," he said.
INTRODUCING NEW TECHNOLOGIES: As global trends show, after introducing carbon tax, most governments have incentivised the purchase of low emission vehicles like hybrid or electric vehicles. Already developed nations like Japan, USA, France, the United Kingdom, China, Norway and others have introduced such policies.
Hybrid cars are now being imported and sold in Bangladesh. However, these are still not very popular. In the developed nations, the sale of hybrid cars and electric cars are being popularised through incentives in car purchase and maintenance taxes for such cars. These taxes are usually lower in those countries when compared with taxes for cars that run on fossil fuels.
Some governments are taking drastic measures to encourage these vehicles. The state of California in the US is going to ban the sale of gasoline-powered cars from 2035. The UK will discourage the sale of new diesel and gasoline vehicles by 2030. It will be a requirement in the country to have zero tailpipe emissions from 2035. As a result, sales of hybrid and electric vehicles are soaring in the developed countries. In Japan, last year, the sale of hybrid vehicles was around 49 per cent of the total number of vehicles sold in the country, up from 42.8 per cent in 2021. The sale of electric vehicles also saw a rise in 2022 in Japan as 65 per cent more imported electric vehicles were sold last year. However, gasoline-driven cars are still popular in that country.
According to the Global EV Outlook 2023 report, published by the International Energy Association (IEA), sale of electric vehicles has soared in China, Europe and the United States in 2022. China is the frontrunner, with 60 per cent of global electric car sales taking place there in 2022. More than half of all electric cars on the road worldwide are in China. Europe and the United States, the second and third largest markets, both saw strong growth with sales increasing 15 per cent and 55 per cent respectively in 2022.
The global alternatively-powered vehicle sales is expected to rise to 14 million in 2023. "This explosive growth means electric cars' share of the overall car market has risen from around 4 per cent in 2020 to 14 per cent in 2022 and is set to increase further to 18 per cent this year" said the IEA report.
ROADBLOCKS TO ALTERNATIVELY-POWERED VEHICLES IN BANGLADESH: Already some environmental experts along with foreign donor bodies have prescribed for energy transitioning and promoting alternatively-powered vehicles. However, Bangladesh is still not at a stage to incentivise such vehicles because of the following reasons:
Higher prices: Most of the cars running on fossil fuels are imported and sold in Bangladesh as 'reconditioned vehicles'. Hybrid vehicles have higher prices. Even used hybrid cars with higher engine capacities have prices anywhere between Tk 25 lakhs and 60 lakhs. With considerable government incentives, the prices of alternatively-powered cars will be more than the traditional cars.
Limited range due to lack of charging station infrastructure: Bangladesh lacks the infrastructure required for import and sale of hybrid and electric vehicles. Electric vehicles have electric motors that run on batteries. These batteries need to be charged regularly. So, electric vehicles cannot be used in Bangladesh for long trips. Also, some electric vehicles have solar panels. While these can be used to charge the batteries, these cannot store power for lengthy periods of time.
Hybrid vehicles have a petrol engine and an electric motor. Due to the lack of charging station infrastructures in the country, it is obvious that most hybrid cars will be running on petrol. As a result, the objective of having lower carbon emissions is less likely to be achieved with hybrid cars.
Higher replacement costs for part and accessories: Finding used auto parts and accessories in Bangladesh for traditional cars is quite easy. There are thousands of mechanics for such cars offering their services at negotiable rates. Such a scenario will be very difficult at least for the first 7 to 8 years if and after the government promotes the sale of alternatively-powered cars.
Less speed and performance: Though acceleration in hybrid car is quicker compared to traditional vehicles, the former is slower as most of these have smaller engines with lower horsepower. Most hybrid vehicles focus on economy rather than speed. The average speed that hybrid cars can run at electric mode is between 30 miles to 45 miles per hour. After this, if the car is accelerated, it will switch to gasoline mode and even then the highest speed will most likely not be more than 100 miles per hour, whereas the top speed for traditional cars are between 150 to 160 miles per hour.
If hybrid cars are encouraged in Bangladesh under the prevailing traffic and road situations, we are likely to see more traffic congestion. Some international automobile brands are working on faster hybrid cars. But the cost of these are very high ranging from US $170,000 to $ 1.7 million per car.
There is a need for researching that will ensure the use of cleaner energy thus lowering air pollution in the country. However, we need to invest in road communications, ensure completion of the mega projects and set up nationwide infrastructure like electric charging stations at filling stations and elsewhere, before making the leap towards encouraging the sale of hybrid and electric vehicles in Bangladesh.
Syed Tashfin Chowdhury is a communications and content marketing professional. The views expressed in this article are his own.