The Kazakh government has decided to keep a controversial fee in place for imported autos. Officials say the fee generates revenue for a recycling program that scraps durable goods, including cars, in an environmentally responsible manner. Critics, however, contend that the fee is achieving the opposite of its intended effect by keeping high-polluting junkers on the road because it puts newer, imported cars out of the financial reach of many Kazakhs.
A citizens’ initiative group submitted a petition containing more than 50,000 signatures in late May seeking the repeal of the fee, contending that it hindered competition and caused environmental harm by discouraging the trade-ins of older autos for more efficient models. A government commission, convened under the auspices of the Ministry of Industry and Construction, took almost two months to issue its decision.
“The recycling fee is aimed at solving environmental issues, while serving as a protective measure for the domestic market against used vehicles that do not meet environmental requirements, and indirectly contributes to the development of domestic production,” the Ministry of Industry said in a statement on July 19.
The recycling fee attached to the price of a used or new imported passenger vehicle in Kazakhstan can climb as high as 2.1 million tenge (about $4,500), depending on the engine size. In 2022, the fee topped $7,000, but was scaled back in the face of public pressure. Even so, the recycling fee, on top of the purchase price and registration cost, makes car-buying unaffordable for many in Kazakhstan, where per capita annual income is in the $4,000-$5,000 range.
Almaty taxi driver Nikolai Shapovalov is among the many citizens who would like to get rid of his old car, in his case a 1998 Mitsubishi, but must keep driving it because he can’t afford a newer model. “Often the recycling fee is even more expensive than the cost of the car,” Shapovalov told Eurasianet. The recycling fee, he added, is “is an anti-people measure that benefits local dealers.”
Sanzhar Bokaev, a leader of the group that submitted the petition, contends that the air pollution caused by older autos outweighs the environmental benefits generated by the recycling program. He added that aging cars also increase safety risks on roads. The recycling fee “brings nothing but harm to the country,” he said.
In a commentary published by Forbes Kazakhstan, Shyngys Temir, a representative of the Union of Independent Automotive Businesses, a lobbying organization, showed that since the introduction of the fee in 2016, the average age of autos in Kazakhstan has increased from 15 to 22 years old. Car ownership numbers, meanwhile, have fallen, from 22 cars per 100 people in 2016 to 18.6 per 100 today.
Bokaev, in comments given to Eurasianet, noted the government has not provided a clear breakdown of how it set the recycling fee and why it is so high. He contends the high cost can’t be justified. Temir, meanwhile, estimated that the cost of recycling a car could be as low as $200.
Not all vehicles are apparently accepted for recycling, Bokaev said. In a video posted on his YouTube channel, Bokaev bought a broken-down tractor with the intention of handing it over for recycling, but the equipment was rejected at both recycling facilities he approached. He was told the machine couldn’t be accepted because it wasn’t in working order. “What do Kazakhstanis pay for?” he asked in the video.
Officials contend the recycling program has been successful, citing statistics showing that since the introduction of the fee, the percentage of durable household goods being recycled has jumped from 2 percent in 2016 to 23 percent this year. Between 2016-2022, almost 200,000 cars and farm vehicles were disposed of under the program.
Temir and other industry observers believe the main aim of keeping the fee in place is to protect the nascent domestic auto industry from outside competition. In 2023, domestic vehicle production reached 148,000, a 30 percent increase over the previous year’s total, the Astana Times reported. The fledgling auto sector is centered in the northern Kostanai Region.
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By Almaz Kumenov via Eurasianet.org
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