Federal Government Announces Mandatory Vehicle Recycling Fee Effective 2026

The Federal Government has introduced a mandatory vehicle recycling fee set to take effect in 2026, marking a significant step toward formalizing the nation’s automotive recycling sector and promoting sustainable vehicle management practices.

The policy was announced by the National Automotive Design and Development Council (NADDC) as part of a broader strategy to modernize Nigeria’s automotive industry and transition toward a circular economy.

A Shift Toward Formalized Recycling
Currently, Nigeria’s vehicle recycling operates largely informally, with end-of-life vehicles often abandoned or dismantled in unregulated settings. Under the new framework, a nominal fee will be collected during vehicle registration. The pooled funds will finance safe, regulated disposal and recycling processes once vehicles reach the end of their operational life.

NADDC Director-General, Joseph Osanipin, explained that the approach mirrors systems in developed nations, where disposal levies support environmentally sound recycling and turn waste into economic value.

Expected Benefits
The initiative aims to deliver multiple economic and environmental advantages:
– Economic Contribution: Projected to generate over ₦150 billion annually through a formalized recycling market.
– Job Creation: Expected to spur employment in vehicle dismantling, parts refurbishment, logistics, and resale.
– Circular Economy Growth: With over 85% of vehicle components reusable or recyclable, Nigeria can build a robust market for second-hand parts and materials.
– Environmental Protection: Reducing abandoned vehicles and hazardous waste will lead to cleaner urban spaces and safer roads.

Complementary Regulatory Measures
Alongside the recycling fee, the government will introduce mandatory pre-export certification for all imported used vehicles starting in 2026—a measure aimed at curbing the influx of near-unroadworthy vehicles. This shifts inspection costs to exporters rather than Nigerian buyers.

The NADDC also outlined plans to support Nigeria’s transition to electric vehicles (EVs) and compressed natural gas (CNG) technologies, including technician training and certification under the National Automotive Industry Development Plan (NAIDP).

Public Engagement and Implementation
While the new fee may initially face public concern over added costs, the government has called on media and stakeholders to communicate the long-term benefits: economic growth, environmental sustainability, and enhanced road safety.

The 2026 implementation timeline positions Nigeria at the forefront of automotive sector reform in Africa, signaling a committed move toward a structured, sustainable, and economically vibrant transport ecosystem.

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