The Center for Environment (hereinafter referred to as the Center), Giro di Sarajevo, Bike Tour Lukavac, and M-Bike Shop have submitted an initiative to the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina (hereinafter referred to as the Ministry) for the abolition of customs tariffs on the import of light personal electric vehicles and electric bicycles (hereinafter referred to as the initiative).
These stakeholders submitted the initiative on April 26, 2023, and subsequently requested additional clarification on December 11, 2023. The Ministry (Customs Policy and Tariffs Sector) took this initiative into account (according to the document below) when drafting the Proposal for the temporary suspension and temporary reduction of customs duties on the import of new electric and hybrid vehicles until December 31, 2024 (hereinafter referred to as the Proposal), which was adopted by the Council of Ministers of Bosnia and Herzegovina at its 39th session held on February 14, 2024.
However, as it was not clear from the document provided by the Ministry whether the tariffs were abolished and/or reduced for light personal electric vehicles and e-bikes, and to what extent (not even whether the initiative was included in the Proposal), the Center requested additional clarification from the Council of Ministers. A response was received, along with attachments: the Ministry’s Proposal – available via this link, and the adopted Decision on the temporary suspension and temporary reduction of customs duties on the import of new electric and hybrid vehicles until December 31, 2024 (hereinafter referred to as the Decision) – available via this link.
Upon further review of the attachments, the Center determined that the initiative for the abolition/reduction of customs tariffs on the import of light personal electric vehicles and electric bicycles in Bosnia and Herzegovina was not included in the Proposal drafted by the Ministry and submitted to the Council of Ministers.
Therefore, the Decision adopted by the Council of Ministers relates to electric and hybrid cars but not electric bicycles and electric scooters.
The reason why the Ministry did not include the initiative in the Proposal is unknown. It remains only to broadly interpret that the Ministry does not consider electric bicycles and electric scooters significant, while it considers electric and hybrid cars to be so.
Why the initiative to abolish customs tariffs for these two types of vehicles was submitted in the first place? And why the Ministry is not correct in prioritizing electric cars over e-bikes and e-scooters?
By examining the Decision on establishing customs tariffs for 2023 (“Official Gazette of BiH”, No. 88/22), the Center determined that the customs tariff for these two types of vehicles is 10%. This tariff applies to the import of the mentioned goods not originating from EU, CEFTA, Turkey, Switzerland, Liechtenstein, Iceland, and Norway.
Since the majority of electric bicycles and scooters are produced outside the aforementioned countries (primarily in China, Taiwan, India, Japan, and Vietnam), and companies from European Union countries (which are frequent intermediaries in the import to end-users in Bosnia and Herzegovina) import these vehicles from the mentioned Asian countries, there is no possibility of exemption from this tariff, as the origin of the products cannot be proven to be EU.
Considering the existence of the Proposal for a Decision on the suspension and temporary reduction of customs duties on the import of new electric and hybrid cars until December 31, 2024, the Center believed that “light personal electric vehicles”, namely electric scooters, and electric bicycles should be included in the same package, if not as a more primary category for which customs tariffs should be abolished.
Furthermore, more affordable e-bikes and e-scooters are among the most economically accessible elements crucial for modal redistribution of traffic at the level of local self-government towards alternative modes of transport, since public transport as the backbone of passenger transport in urban areas is still underdeveloped in municipalities and cities in Bosnia and Herzegovina.
Given that the majority of trips (both in BiH and globally) are made in urban and suburban areas, and at distances shorter than five kilometers (which is short enough for a switch to alternative modes of transportation) – the mentioned modal redistribution would address the following issues:
- Traffic congestion in active transport (cars in traffic occupy 14 times more space than bicycles or scooters: https://www.researchgate.net/figure/Space-efficiencies-of-car-tram-bike-and-walking_fig5_232847647; while on average they transport only about 30% more passengers per vehicle, considering the occupancy rate which ranges between 1.21 and 1.33 for cars)
- Lack of space in passive transport (reduction in the need for parking spaces: in the space required to park one passenger car in a parallel parking system, ten bicycles or scooters can fit)
- Carbon footprint and climate mitigation (carbon savings per kilometer compared to passenger cars (271gCO2/km/passenger) in the case of e-bikes (22gCO2/km/passenger) amount to 249 grams: https://ecf.com/system/files/Cycle_More_Often_2_Cool_Down_the_Planet.pdf)
- Air pollution from the transport sector
It is important to note the health benefits of cycling with electric assistance for people with reduced mobility, considering the obstacles that may arise when using a traditional bicycle for these individuals.
Socioeconomic circumstances of different social strata in Bosnia and Herzegovina are also a significant factor. Since electric cars are much less economically accessible to a larger number of citizens, the primacy of electrification of individual means of transportation by establishing incentives for importation should precisely involve light personal electric vehicles and electric bicycles, which are significantly more economically accessible. Furthermore, for citizens of Bosnia and Herzegovina, the most accessible market for the import of these vehicles is the European Union, in whose countries these vehicles, either as a whole or in parts, are imported directly from the mentioned Asian countries and are already taxed accordingly. In such a situation, citizens of Bosnia and Herzegovina actually find themselves in a position to pay higher prices for these vehicles when importing from the EU compared to citizens of EU countries, relative to purchasing power.
Additionally, in the long term, electric cars impose a much greater burden on the power grid and consume more electricity, which is significant considering the free public charging stations and the fact that Bosnia and Herzegovina still produces between 50% and 70% of its electricity from thermal power plants, which are major polluters.
Furthermore, the abolition of customs tariffs on these two categories of vehicles would mean a significant financial relief for the import of electric cargo bikes, which have revolutionized logistics for the delivery of goods over shorter distances in European cities, but also enabled greater flexibility for smaller, artisanal businesses. They are also significant for increasing the flexibility of transporting children by parents.
Additionally, the trend of introducing shared bike and e-scooter systems in local self-governments by the business sector supports this initiative. For now, in Bosnia and Herzegovina, a shared bike system exists in Sarajevo, Mostar, Zenica, and Banja Luka (with indications for expansion to other municipalities), while shared electric scooter systems exist in Sarajevo, Banja Luka, and Mostar. The mentioned bicycles are not electric, but the abolition of customs tariffs would support the introduction of electric bicycles (which are needed for longer distances and in municipalities with greater elevation differences in their coverage areas) and the expansion of e-scooter offerings in other municipalities with the possibility of offering more competitive prices for citizens by these companies.