Exclusive Op-ed: Environmental and policy experts have voiced serious concerns over the International Monetary Fund’s (IMF) recent proposal encouraging Pakistan to allow the commercial import of used cars. They warn that such a move could significantly undermine the government’s clean energy initiatives in the transport sector.
As part of its broader trade liberalization push, the IMF has recommended reducing tariffs on Completely Built Units (CBUs) by 5–15%, with steeper cuts proposed for vehicles with larger engine capacities.
“Pakistan is already grappling with a serious transport-related emissions crisis, and the sector is one of the fastest-growing contributors to urban air pollution and greenhouse gas emissions,” said environmental policy analyst Dr. Shafiq Ahmad Kamboh. “Allowing the import of used cars, many of which lack modern emission control technologies, will only worsen this burden,” he added.
Dr. Kamboh described the IMF’s position as contradictory, noting that while the Fund recently approved a $1.4 billion loan for Pakistan under its climate resilience program, it is simultaneously pushing for policy changes that could increase the country’s carbon footprint.
Imported used cars currently account for about 15-20% of the total car purchases in Pakistan despite restrictions and protections for the local industry.
Dr. Aneel Salman, Chair of Economic Security at the Islamabad Policy Research Institute (IPRI), criticized the IMF’s approach.
“While the IMF’s trade liberalization agenda may offer short-term economic relief, it effectively shifts the environmental burden from developed to developing countries. Without a complementary carbon management or vehicle retirement strategy, the long-term costs—environmental, health-related, and economic—are likely to outweigh any immediate fiscal gains.”
Environmental scientist and academic, Dr. Muhammad Irfan Khan, agrees that the environmental cost of the proposed step is likely to outweigh the economic benefits unless accompanied by strong regulatory measures.
According to IPRI, the transportation sector is a key driver of environmental degradation, accounting for 43% of airborne emissions in Punjab alone. The United Nations Environment Programme (UNEP) has similarly warned that the export of older, polluting vehicles to developing countries exacerbates public health issues and accelerates environmental decline.
Experts stress that Pakistan must remain committed to its National Electric Vehicle Policy (2020–2025), which aims to convert 30% of all vehicles to electric by 2030. They argue that encouraging the use of internal combustion engine (ICE) vehicle imports directly contradicts this goal.
The domestic automotive industry also opposes the proposal, warning that it would severely impact profitability and investor confidence. While liberalizing imports might benefit price-sensitive consumers in the short term, industry leaders argue it threatens the long-term sustainability, innovation, and growth of the sector.
They also caution that increased used car imports, particularly ICE CBUs, will undermine the competitiveness of New Energy Vehicles (NEVs) by making them less price-competitive. This could stall progress in local NEV assembly (CKD), which is critical for technological development, job creation, and cost efficiency.
Furthermore, continued reliance on ICE vehicles risks entrenching fossil fuel infrastructure, such as fuel stations and traditional maintenance networks, while delaying vital investment in electric vehicle (EV) infrastructure, including charging stations and smart grids.
In light of these challenges, experts are urging the government to adopt a firm stance in the upcoming federal budget. Instead of reducing the allowable age of imported vehicles, they recommend tightening tariffs on used car imports and aligning trade policies with national environmental and industrial goals to protect local manufacturing and reduce emissions.