The transportation sector is the main demand driver of fossil fuel consumption in the Caribbean. It accounts for 37% of fuel consumption in Jamaica, 36% in the Dominican Republic and 33% in Barbados. The development of renewable energy potential, the reduction of battery costs, and the introduction of government incentives, however, provide the ultimate opportunity to reduce a Caribbean country or territory’s dependence on fossil fuels.
In May 2021, Jamaica's electric vehicle sector has seen many upgrades, with Barbados becoming the largest per capita consumer of electric vehicles in the Caribbean, with more than 430 electric vehicles on the island's roads.
Electric mobility is gaining popularity in the Caribbean region, with the government introducing incentives to reduce carbon emissions and electrify the transport sector. Caribbean countries could save up to US$2.2B on fuel by switching to electric vehicles over the next 20 years. As such, governments are fostering partnerships with utilities and the private sector to accelerate the deployment of electric vehicles and charging infrastructure that can support the region's transition to full decarbonisation.
In the United States, the President's administration has committed to net zero emissions by 2050 and a significant investment of US$2.25T to promote green energy and decarbonisation. Among the initiatives the administration will focus on includes installing more than 500,000 electric vehicle charging stations, deploying electric buses, electric vehicle rebates to support vehicle electrification, and ensuring training standards that will create more than 1 million new jobs.
Across the Caribbean, we have other examples of how policies are driving the growth of electrification. In the Dominican Republic, the government has reduced duties and registration fees for electric vehicles by 50%, allowing for an almost ninefold increase in the number of electric vehicles. In the British Virgin Islands, the Government has implemented a duty-free policy for the next two years (which started in mid-2021) on all renewable energy products; and thereafter, the duty rate will rise to only 10% on LED materials (which is half the historical rate on such products), and a flat 15% on all other energy efficient products. The definition of energy efficient products includes hybrid and electric vehicles. The Government has also implemented a public transport service around the capital of Road Town made up of a fleet of electric-powered buses.
Barbados' enforcement policy encourages support for its 49% fossil fuel reduction target by electrifying 100% of its buses and public fleet, which could save US$200-400. As the country leads the region as the largest per capita consumer of electric vehicles, this transformation of the energy balance could contribute to a cleaner environment and reduce oil imports.