FG to Introduce Compulsory Vehicle Recycling Fee Starting 2026
Starting in 2026, owners of newly registered vehicles must pay a modest fee to fund proper end-of-life disposal, as announced by NADDC Director-General Joseph Osanipin in Abuja. The policy tackles informal scrapping that causes abandonments and hazards, with officials noting over 85% of parts can be reused to build a circular economy and thousands of jobs. It ties into broader reforms like curbing unroadworthy imports—worth N1.01 trillion so far in 2025—and boosting local assembly, though many online voices call it another burdensome tax amid rising costs.
The End of the Road? What Nigeria’s New 2026 Vehicle Recycling Fee Means for You
If you’ve driven through any major Nigerian city lately, you’ve seen them: rusted frames of abandoned “Tokunbo” cars sitting by the roadside, slowly turning into environmental hazards.
The Federal Government has officially decided that 2026 is the year this changes.
In a move to modernize the automotive sector, Joseph Osanipin, the Director-General of the National Automotive Design and Development Council (NADDC), announced that Nigeria will launch a Mandatory Vehicle Recycling Fee starting in 2026.
But is this just another “tax burden,” or is it the start of a “Scrap-to-Cash” revolution? Here is everything you need to know.
1. The “Why”: From Eyesores to Economic Goldmines
Nigeria currently loses billions of naira to the informal scrapping industry. When a car dies today, it’s often stripped of its most valuable parts in unregulated yards, while hazardous fluids like engine oil and battery acid seep into the ground.
The new End-of-Life Vehicle (ELV) policy aims to:
- Create a Circular Economy: Over 85% of a car’s parts (steel, aluminum, plastics, and glass) can be recycled.
- Generate Revenue: The NADDC projects that formalizing this sector could unlock over ₦150 billion annually.
- Create Jobs: Officials estimate the policy will create roughly 40,000 direct and indirect jobs in dismantling, logistics, and parts refurbishment.
2. The “How Much”: What Will It Cost You?
The fee will be mandatory for newly registered vehicles and collected at the point of registration. While the official final figures are still being gazetted, current framework discussions suggest a “modest” tiered fee structure:
- Motorcycles: ~₦2,000
- Passenger Cars: ~₦5,000 – ₦10,000
- Heavy-Duty Vehicles: ~₦10,000+
“In developed countries, when you buy a vehicle, you pay for its eventual disposal upfront. Someone has to be responsible for the cleanup,” Osanipin explained during the Abuja announcement.
3. No More “Rusted” Imports
This isn’t just about old cars leaving the road; it’s about stopping “dead” cars from entering Nigeria in the first place.
- Pre-export Certification: From 2026, all used vehicles imported into Nigeria must have a certificate of roadworthiness from their country of origin.
- Cost to Exporters: Crucially, the NADDC stated that the cost of this certification will be borne by the exporters, not the Nigerian consumer.
4. The “Scrap-to-Cash” Incentive
The government is pitching this as a win for owners. Instead of paying someone to tow away a dead car, the new framework will establish formal recycling centers where owners can turn in their old vehicles for cash. This ensures that the car is “de-polluted” safely while the owner gets a final payout for the scrap value.
The Reality Check: Public Reaction
While the environmental benefits are clear, many Nigerians are skeptical. With the cost of vehicles skyrocketing—Nigeria has already seen ₦1.01 trillion spent on imports in 2025 alone—critics argue that any new fee feels like an extra weight on an already struggling populace.
Online voices have called for the government to first provide a functional public transport system before taxing the aging cars that many rely on for their livelihoods.
What’s Next?
The NADDC is currently working to turn the National Auto Industry Development Plan (NAIDP) into a formal Act of Parliament. This will give the 2026 policy the legal “teeth” it needs to stay consistent regardless of who is in power.
