The case for electric and hybrid vehicles
by Vahakn Kabakian
With a global move underway to green the transport sector—in particular, to reduce the impact of privately-owned vehicles—analysts predict that the end of the age of the internal combustion engine is just down the road. The primary catalyst for this move toward greener options can be attributed to the Paris Agreement—a treaty struck among the countries of the world in a bid to save the planet from the impact of climate change, the main driver of which is anthropogenic greenhouse gas emissions. Around 15 percent of global gas emissions are generated by the transport sector.
For Lebanon, the case is slightly more alarming as seen from the results of several studies undertaken by the environment ministry and the UNDP. For example, around 25 percent of the country’s national greenhouse gas emissions emanate from the transport sector—more specifically, from land-based transport. The official number of registered vehicles in the country has surpassed 1.6 million, with 42 percent of these vehicles being older than 20 years and almost 60 percent being 15 years or older, bringing the number of outdated vehicles on Lebanon’s streets to nearly 1 million. This indicates an excessively high vehicle ownership rate (with 250 cars per every 1000 people), dominated by old vehicles. In 2016, Lebanon’s transport sector consumed 2.8 million liters of gasoline. The externality cost (the economic losses incurred due to air pollution, carbon emissions, congestion, and accidents) of this volume of gasoline is a staggering $3 billion per year, or around $2,000 per vehicle.
In addition to contributing to climate change, the transport sector in Lebanon is responsible for 93 percent of the country’s carbon monoxide, 67 percent of non-methane volatile organic compounds, and 52 percent of nitrogen oxide emissions—all of which are air pollutants that have a disproportionate impact at the local level. Lebanese living around major road axes and in large cities are exposed to these pollutants on a daily basis.
Back in 2015, UNDP estimated the mobility cost in Lebanon—that is, the cost of one passenger traveling one kilometer in a passenger vehicle, including externality components of pollution, travel time, congestion, and accident costs. This study found an average (albeit conservative) mobility cost figure of 48 cents per km. It was also found that the most critical sub-indicator pointed to excessive energy consumption by the passenger transport sector (cost of fossil fuel). In fact, Lebanese consume close to 2.7 times more gasoline annually than the world average.
In an attempt to combine local benefits with global ones, a national mitigation plan for the transport sector was approved last October by the Council of Ministers. The incentive program aims to remove cars that are older than 15 years old and replace them with fuel efficient (hybrid and electric) vehicles. Replacing the 1 million older model vehicles on Lebanon’s roads would result in a 14 percent reduction of the country’s greenhouse gas emission by 2030 (nearly 1.1 million tons of carbon dioxide), a reduction in gasoline consumption by 466 million liters in total over a 12 year period, and less air pollution. Subsidizing these vehicles may also stimulate the market for new car purchases.
Ahmad Barclay & Vahakn Kabakian
This spring, Parliament legislated the reduction or removal of customs taxes on hybrid and electric vehicles (EVs). This incentive was laid out in article 55 of the 2018 budget law. For private vehicles, customs and excise taxes are reduced by 80 percent for hybrid and 100 percent for electric vehicles, though the owner will still have to pay the registration and circulation fees (the latter is known as “mecanique”). For taxis/service vehicles, the customs and excise taxes are reduced by 90 percent for hybrid and 100 percent for EVs, in addition to a total exemption on registration and circulation fees.
This program does not contradict the efforts of the government to establish a public transport system. In fact, it complements the efforts underway to green the land transport sector. Both approaches contribute toward meeting Lebanon’s global commitments under the Paris Agreement, as well as the United Nations’ Sustainable Development Goals (SDGs) related to Good Health and Wellbeing (SDG 3), Affordable and Clean Energy (SDG 7), Sustainable Cities and Communities (SDG 11), Responsible Consumption and Production (SDG 12), and Climate Action (SDG 13).
As global markets shift toward hybrid and electric cars, projections suggest that the upfront cost of these vehicles will become competitive on an unsubsidized basis starting in 2025 and reach parity by 2029, a trajectory that will accelerate as battery prices decline. For Lebanon to secure a smooth transition, and renew its private vehicle fleet with hybrids and electrics, certain actions must be undertaken at the national level in the medium term. In relation to electric vehicles, the implications of the current state and quality of the power grid for the charging of these vehicles must be assessed, likewise the impact of this activity on the power sector (for instance, additional capacity requirements) and the proper alleviating measures (time-of-use pricing, for example). In parallel, it might also be useful to assess the current and required regulatory framework to further promote hybrid and electric vehicle usage, including building codes to introduce charging stations at home and in offices, where a certain percentage of parking bays must be installed with conduits to allow charging stations to be set-up.
Necessity dictates a plan for infrastructure and the provision of incentives to encourage and accommodate the growth of green mobility (including public transportation). A comprehensive plan must also be set out to prepare the electricity grid to accommodate increased demand generated by EV charging, and studies must be done to examine comparative emissions from EVs versus conventional vehicles. To be truly effective, this approach will also require the continued greening of the electricity grid, since an electric vehicle is only as clean as its power supply.