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Japan pushes to remove zero-emission vehicle target from G7 statement, draft shows

Move to water down language on climate change from the leaders' summit in Germany.

In Summary

•G7 leaders are meeting in the Bavarian Alps for a summit where climate change figures on the agenda.

•Japan has proposed removing a reference to a "collective goal of at least 50% zero-emission vehicles by 2030".

Sports utility vehicles (SUVs) await shipment/FILE
Sports utility vehicles (SUVs) await shipment/FILE

Japan, Kenya's top import source for used cars,  is pushing to remove a target for zero-emission vehicles from a G7 communique expected this week.

This is according to a proposed draft seen by Reuters, a move that would water down language on climate change from the leaders' summit in Germany.

The pressure from Tokyo, an influential member of the Group of Seven rich nations, comes as the Japanese auto industry has faced scrutiny from green investors who say it has been slow to embrace zero-emission vehicles and lobbied against regulations that would encourage quicker transition to the technology.

Reuters reported last week that Toyota Motor Corp's (7203.T) head lobbied the Japanese government to make clear it supported hybrid vehicles as much as zero-emission battery electrics.

G7 leaders are meeting in the Bavarian Alps for a summit where climate change figures on the agenda.

Japan has proposed removing a reference to a "collective goal of at least 50% zero-emission vehicles by 2030", according to a draft of the communique reviewed by Reuters.

In its place it has proposed a less concrete target of "significantly increasing the sale, share and uptake of zero-emission light duty vehicles recognising the range of pathways that members are adopting to approach these goals", according to the draft.

A person familiar with the matter confirmed that Japan had proposed the changes, declining to be identified because of the sensitivity of the issue.

It was not clear whether the proposed changes would be in the final version of the communique, which is due to be released at the end of the summit on Tuesday.

Japan's foreign ministry said it was not immediately able to comment.

AUTO INDUSTRY WANTS RANGE OF OPTIONS

Separately, Japan had pushed to remove a goal for all new car and van sales in G7 countries to be "zero emission vehicles" by 2035, in the G7 climate ministers' communique in late May, according to sources familiar with the discussions and a draft communique seen by Reuters.

Ultimately the 2035 target was not included in the final statement, which pledged instead to achieve a "highly decarbonised road sector by 2030" by "significantly increasing" zero-emission vehicle sales.

Reuters reported last week that Toyota Motor Corp's (7203.T) head lobbied the Japanese government to make clear it supported hybrid vehicles, which burn fossil fuels, as much as zero-emission battery electrics.

Both Japan's auto industry lobby and leading automaker Toyota say automakers should not be limited to specific technologies and needed to keep a range of options towards reaching a goal of carbon neutrality by 2050.

Toyota, the world's biggest automaker by sales, has said fossil fuels, not internal combustion engines, are the problem. As well as the hybrids it popularised more than two decades ago with the Prius, it also champions hydrogen technology, although that has so far not caught on the way battery-electric cars have.

Energy and climate think-tank InfluenceMap has rated Toyota the worst among major automakers for its lobbying record on climate policy, which includes public statements and interaction with governments.

KENYA'S CAR IMPORTS , AUTOMOTIVE INDUSTRY 

Kenya imports between 7,000 and 12,000 used cars a month mainly from Japan (80 per cent), with other markets being United Kingdom, United Arab Emirates, Singapore and South Africa.

With an age limit of eight years, the second-hand cars dominate the local market accounting for 85 per cent of Kenya's car purchases, with an annual import of above 86,000 units.

The government has however been seeking to reduce the age limit to five years, to promote local assembling and address emission concerns blamed on combustion in old cars.

President Uhuru Kenyatta recently affirmed his support for the growth of local industries, encouraging local motor vehicle assembling as opposed to imported used cars, which he said: “have flooded the country.”

“We want to revive the automotive industry in Kenya. It used to be at one stage that the majority of vehicles that used to traverse our roads were actually assembled by our own young Kenyans,” the President pointed out.

Meanwhile, the government has banned imports of used buses to Kenya, from July 1, in the latest move to protect and promote local assemblers.

This comes amid tax incentives announced by National Treasury CS Ukur Yatani in the 2022-23 budget  targeting the local motor vehicle industry.

The Kenya National Bureau of Standards(Kebs) plans to ban importation of all types of used passenger minibuses used in the country’s thriving  matatu industry, effective July.

Used mini-buses common with corporates, large buses, single articulated and bi-articulated buses and double decker buses will also not be allowed for importation into the country.

However, used passenger micro-buses of up to seven metres overall length(commonly used by tour firms) shall continue to be imported, but strictly under the country’s eight-year rule.

All imported new diesel powered and petrol powered vehicles shall be type approved to meet the requirements of EUROIV/4 before importation into the country.

These are European emission standards on vehicles which have been evolving with a progressive introduction of increasingly stringent environmental standards.

Details of Euro 7, the final standard, are expected out this year and probably come into force in 2025.

Most used cars imported into the country are Euro 4 according to importers, who have previously questioned the ability of local assemblers to meet the standards.

According to Kebs, the new directive to ban used buses and other units is under the Kenya Standards 1515:2019-Road Vehicle-Inspection of Road Vehicles-Code of Practice as mandatory Kenya Standards by the Industrialisation, Trade and Enterprise ministry.

Major assembly plants to benefit from the latest move are Nairobi’s Isuzu, Mombasa’s Associated Vehicle Assemblers (owned by Simba Corp), Thika’s Kenya Vehicle Manufacturers (owned by the government), DT Dobie and CMC Holdings).

Isuzu East Africa CEO Rita Kavashe has welcomed the move saying it will create an opportunity for growth of the local assembly industry. 

Latest industry data by the Kenya Motor Vehicle Industry Association (KMI) shows a resurgence on sales of new motor vehicles after a slow-down during the pandemic.

Dealers such as Isuzu East Africa, Toyota Kenya, Simba Corporation (which sales Mitsubishi), and Transafrica Motors (dealers of FAW), sold 14,250 units last year, a six-year high.

The performance also represented a 29.8 percent increase compared to the 10,977 units sold in 2020.

The share of locally assembled vehicles rose to a record 70.6 per cent of the total sales in 2021.

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