Explained: 12 Key Facts About Nigeria's Mandatory Vehicle Recycling Fee Starting in 2026
- Nigeria is set to introduce a mandatory vehicle recycling fee at registration under the government-approved End-of-Life Vehicle programme
- The new policy is expected to regulate vehicle disposal and enforce stricter used-vehicle import rules, including compulsory pre-export certification
- The policy is expected to generate over N150 billion annually, formalise the spare parts and recycling market, create jobs and support broader reforms
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
Beginning in 2026, Nigerians purchasing or registering vehicles will be required to pay a compulsory vehicle recycling levy as part of the Federal Government’s plan to restructure the automotive sector and address the growing problem of abandoned and unsafe vehicles.
The new charge is being introduced under the government-approved End-of-Life Vehicle (ELV) programme, a national framework aimed at regulating how vehicles are disposed of once they are no longer safe or economically viable to use.
Source: Getty Images
Officials say the policy is designed to reduce environmental pollution, stop Nigeria from becoming a dumping ground for worn-out imported cars, and stimulate a formal vehicle recycling industry.
According to government projections, a structured recycling system could generate more than N150 billion in annual revenue, while also supporting job creation across recycling, logistics, refurbishment, and component resale businesses.
Authorities describe the reforms as one of the most significant changes to Nigeria’s auto industry in decades, The Nation reports.
Key facts about the Vehicle Recycling Fee
1. Mandatory payment starts in 2026
From 2026, the recycling fee will be charged at the point of vehicle registration, covering both newly imported and locally assembled vehicles.
2. Part of the End-of-Life Vehicle (ELV) programme
The policy falls under a broader ELV framework that sets standards for vehicle lifespan management, dismantling, recycling, and final disposal.
3. Revenue potential exceeds N150 billion yearly
By formalising what is currently an informal scrap market, the government expects the programme to unlock a high-value recycling economy, earning over N150 billion annually, according to Punch.
4. Funding safe and eco-friendly disposal
Funds collected will support certified facilities that dismantle vehicles safely, recover usable materials, and prevent hazardous waste from harming the environment.
5. Aligned with international standards
Similar systems exist in Europe and parts of Asia, where buyers pay an upfront fee that covers vehicle recycling at the end of its life.
6. High reuse potential of old vehicles
Industry studies indicate that more than 85% of parts from end-of-life vehicles, such as engines, metals, plastics, and electronics, can be reused or recycled.
7. Formalising the spare parts market
The popular “Belgian parts” trade, which currently operates largely without regulation, will be brought into a structured and monitored recycling system.
8. Employment opportunities across the value chain
The recycling ecosystem is expected to create thousands of jobs in dismantling, refurbishing, transport, storage, and resale of recovered components.
9. Pre-export certification begins in 2026
From 2026, all used vehicles destined for Nigeria must be inspected and certified in the exporting country to confirm they meet minimum safety and usability standards.
10. Certification costs borne by exporters
Foreign exporters, not Nigerian buyers, will be responsible for paying the pre-export inspection and certification fees.
11. Shift toward EV and CNG conversions
The government is also promoting the conversion of petrol- and diesel-powered vehicles to electric and compressed natural gas alternatives.
12. Training already underway
The National Automotive Design and Development Council (NADDC) has begun training regulators and technicians in EV maintenance and CNG retrofitting. National occupational standards and official certification programmes for EV and CNG work are scheduled to launch by 2026.
Source: Getty Images
Nigerians import N1trn worth of cars
Meanwhile, Legit.ng earlier reported that Nigeria’s used vehicle market recorded a strong recovery, driven largely by improved stability in the foreign exchange market over the past nine months.
Fresh figures from the National Bureau of Statistics (NBS) show that car imports into the country were valued at about N1 trillion over the nine months, marking a significant rise from the previous year.
Compared with 2024, the value of car imports increased by N113.15 billion, representing a growth of roughly 12.7% from the N894.09 billion recorded earlier, according to the data.
Source: Legit.ng
