Azerbaijan transitions into green economy through customs reforms

An economically sustainable, clean, and healthy environment is one of the main challenges, said Mukhtar Babayev, acting Minister of Ecology and Natural Resources of the Azerbaijan Republic, during a forum titled “Tax system in the new development period: Strategic Goals for a Sustainable Economy” held today, Azernews reports.

He emphasised the importance of tax policies that encourage businesses to adopt green practices, invest in sustainable energy projects, and support investors utilising renewable energy sources. M. Babayev noted that in recent years, the import of electric cars in Azerbaijan has increased 20 times in 2023 compared to 2021 as a result of these reforms in customs.

The minister also mentioned electric cars imported into the country.

"In recent years, in the direction of realising the existing potential for the development of the "green economy" in the country, reforms are being carried out in the field of legislation in accordance with the requirements of the modern era. Important steps are being taken in the direction of decarbonisation, attraction of green investments, and support of "green financing" initiatives.

M. Babayev also said that the implemented measures are showing up in their results.

"Thus, starting in 2019, tax concessions have been gradually applied to electric and hybrid cars, as well as to chargers. After the introduction of concessions, there has been an increase in the import of electric cars. In 2023, up to 20 times more electric cars were imported than in 2021.

Mukhtar Babayev noted that local car production, environmental sustainability, and recycling are encouraged by offering concessions to car owners within the framework of the recently adopted program for the disposal of old and unusable vehicles: based on the "polluter pays" principle, the damage that may be caused to nature as a result of production activities should be compensated. In many developed countries, a carbon tax is imposed on the release of pollutants into the environment as well as the release of carbon emissions. In 2022, relevant changes were made to the Rules of Application of Payments for Environmental Pollution, which have been in force in Azerbaijan since 1992. The previous payment regulations did not meet the requirements of the current period and were not compatible with the economic development of the country. The introduction of new fees created a basis for ensuring the accounting of polluters as well as increasing the sense of responsibility for environmental protection in enterprises. The main goal here is to encourage enterprises to invest in the application of modern technologies instead of paying for the release of waste and environmental damage."