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Decarbonizing the Boda Boda sector: A step towards Kenya’s 32pc emissions reduction target

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By Domas Mineikis

Unlike developed countries, where industries are primarily responsible for releasing tons of carbon into the atmosphere, in developing nations like Kenya, the transportation and agriculture sectors emerge as the major culprits.

In Kenya, motorcycles, and vehicles, especially the older ones, constitute a substantial portion of these emissions, and the consequences are dire. Older vehicles not only contribute significantly to carbon emissions but also pollute the air by releasing fine particulate matter and nitrogen oxides that pose health hazards.

Studies, including one conducted by the World Health Organization (WHO), have revealed that Kenya’s urban areas suffer the most from transport emissions, with Nairobi ranking as the most polluted city in the country.

As of February 2018, the National Transport and Safety Authority reported approximately 1.4 million registered boda bodas in Kenya. Data from the Economic Survey 2023 revealed a consistent increase in the number of registered two-wheelers each year, except for 2022, which saw a decline of 53.5 per cent to 135,514 from 291,553 in 2021 – a drop likely linked to the General Elections.

A study conducted by Car and General, a local motorcycle sales company, showed that the boda boda transport sector generates an average daily revenue of Sh1 billion from transportation services. The popularity of boda boda business has been increasing each day. The business provides income for thousands of unemployed youths who are entering the job market annually after completing their studies.

Presently, around 270 million motorcycles traverse the world’s roads, a number projected to swell to 400 million within the next two decades. Operating on fossil fuels, emissions from these vehicles contribute to climate change and pose risks to human health.

President William Ruto’s move to incentivise electric bikes is laudable. The government has already announced plans to lift taxes on electric motorbikes within the country. Electric motorcycle spare parts, batteries, and other charging equipment which are mostly outsourced will also be exempted from VAT with the aim of boosting local electric motorcycle production from the current 2,000 units to 200,000 by the end of 2024.

The United Nations Environment estimates that transitioning to electric motorcycles globally could prevent 11 billion tons of carbon dioxide emissions, while also saving motorcycle owners a combined Sh5 trillion (USD 350 billion) by 2050, as e-bikes are cheaper to fuel and maintain.

In its updated Nationally Determined Contributions (NDCs) submitted to the United Nations Framework Convention on Climate Change (UNFCCC), Kenya has raised carbon emission reduction ambitions from 30 per cent to 32 per cent by 2030.

Kenya aims to achieve this target by significantly reducing carbon emissions from the transportation sector, amounting to a substantial margin of metric tons of carbon dioxide equivalent (MTCO2e) over the next seven years. Kenya’s National Climate Change Action Plan (NCCAP) estimates that the transportation sector alone will contribute five percent towards Kenya’s total carbon emission reduction goal by 2030.

However, realising this target requires active participation from the private sector. The National Climate Change Action Plan (NCCAP) has highlighted numerous opportunities for private enterprises to contribute to this goal and combat global warming. These opportunities encompass providing affordable credit facilities for boda boda operators to acquire e-bikes.

As MOGO, we have recently taken a strategic approach towards this sustainability by introducing a credit facility that will see us fund e-bikes for both electric two-wheeler importers and Boda Boda operators.

Kenya can attain its emission reduction goal through active involvement of the private sector, offering solutions to decarbonise major contributors of carbon emissions, such as agriculture, energy, waste management, and industries.

The writer is the Country Manager at financial services firm Mogo.

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