A New Chapter for Nigeria’s Automotive Industry
In a major move toward environmental sustainability and industrial modernization, the Federal Government of Nigeria has announced the introduction of a mandatory vehicle recycling fee, set to take effect in 2026. This initiative, spearheaded by the National Automotive Design and Development Council (NADDC), aims to formalize the country’s largely informal recycling sector and turn “automotive waste” into a multi-billion naira economic engine.
The policy, centered on the End-of-Life Vehicle (ELV) programme, was officially unveiled by the Director-General of the NADDC, Joseph Osanipin, during a media engagement in December 2025. By implementing this international best practice, Nigeria joins the ranks of developed nations that hold vehicle owners accountable for the eventual disposal of their automobiles.
How the Mandatory Recycling Fee Works
The core of the new regulation is a “modest fee” that will be collected from vehicle owners. According to the NADDC, the payment structure is designed to be inclusive but firm:
Point of Collection: The fee will be mandatory at the point of vehicle registration. This ensures that every new and used vehicle entering the Nigerian road system has a “disposal fund” attached to its lifecycle.
The “Polluter Pays” Principle: The fee is expected to range from N2,000 for motorcycles to approximately N10,000 for heavy-duty vehicles.
Mandatory Pre-Export Certification: Starting in 2026, all used vehicles imported into Nigeria must undergo a pre-export certification. This measure is designed to prevent Nigeria from becoming a “dumping ground” for rusted, non-roadworthy vehicles from Europe and America.
Economic Impact: The N150 Billion Opportunity
The Federal Government isn’t just looking at environmental cleanup; they are looking at a massive revenue stream. The NADDC projects that a well-managed vehicle recycling ecosystem can contribute over N150 billion annually to the Nigerian economy.
Job Creation: The formalization of this sector is expected to create over 40,000 direct and indirect jobs in dismantling, component refurbishing, logistics, and secondary parts resale.
Material Recovery: Over 85% of vehicle components—including steel, aluminum, plastics, and batteries—can be recycled. In a world where raw material costs are rising, these “scrap-to-cash” opportunities provide essential inputs for local manufacturing.
Second-Hand Parts Market: By regulating the “Belgian parts” (used parts) market, the government aims to ensure that recycled components meet safety standards, providing affordable and reliable options for Nigerian car owners.
Environmental and Safety Benefits
Beyond the balance sheets, the ELV policy addresses two critical Nigerian crises: road safety and public health.
Clearing the Roads: Abandoned “scraps” littering Nigerian highways are more than just eyesores; they are safety hazards that contribute to accidents. The recycling fee will fund the removal and processing of these “end-of-life” eyesores.
Toxin Management: Old vehicles leak lead-acid from batteries and hazardous fluids into the soil. A structured recycling process ensures these toxins are captured and disposed of using environmentally sound technologies.
Roadworthiness Enforcement: The policy will be linked to vehicle inspection tests. If a car fails a roadworthiness test and is deemed “end-of-life,” the owner will be encouraged (or required) to turn it in for recycling in exchange for its scrap value.
Navigating Public Resistance
The NADDC DG, Joseph Osanipin, acknowledged that the introduction of any new fee might face initial pushback from the public. However, he emphasized that the long-term benefits—cleaner air, safer roads, and a boosted economy—far outweigh the small initial cost. “Somebody has to be responsible for the disposal,” he noted, echoing systems already successful in Japan, the Netherlands, and the United States.
Conclusion: Preparing for 2026
The 2026 vehicle recycling fee is a bold step toward a circular economy. As the government prepares for full implementation, car owners and importers are encouraged to stay informed about the new registration requirements. By turning “waste into wealth,” Nigeria is not just cleaning up its streets—it’s fueling its industrial future.
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