ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) has introduced a new policy to encourage taxi owners to replace aging vehicles with newer, environmentally friendly models in an effort to reduce emissions, improve public services, and modernize the fleet. The changes, however, have created confusion among drivers and face the problem of a lack of necessary infrastructure for electric vehicles.
“In a new step, the Ministry of Interior, aiming to renew taxis throughout the region, raise the level of environmental protection, improve passenger services, and implement new technical standards… [has] reopened the registration of new taxis after several years of suspension,” the ministry said in a statement.
The directive, announced on April 28, ended a years-long pause on new taxi registrations that had been brought in to prevent market oversaturation and ensure drivers can still earn a living.
The new policy prioritizes vehicles that meet updated technical and environmental standards, including gasoline-only, liquefied petroleum gas (LPG), hybrid, and fully electric cars. As an incentive, administration fees to register taxis will be waived for certain eco-friendly vehicles.
With limited public transit options, taxis play a vital role in the Kurdistan Region’s transportation network, serving as a primary means of daily transport for thousands. In urban centers like Erbil and Sulaimani, where bus routes are sparse and schedules inconsistent, residents often rely on taxis to commute to work, access services, and travel between districts.
The sector also provides income for thousands of drivers, making it a key component of both the transportation system and the economy.
The volume of vehicles on the road, however, is damaging to the environment.
Erbil has one of the highest levels of air pollution in Iraq, Deputy Environment Minister Jassim al-Falahi told Rudaw last year. There are several causes, most notably, plumes of smoke from electricity generators and the numerous cars using low-quality fuel that contains sulfur.
Air quality in Erbil is a serious public health concern, with Swiss-based IQAir reporting an Air Quality Index (AQI) that frequently reaches levels classified as unhealthy for the general population. According to Salih Najib, a professor at the University of Sulaimani, Erbil’s levels of PM2.5, fine particles that we breathe into our lungs, can be as much as 11 times higher than the World Health Organization’s recommended limit.
To qualify for a taxi registration, vehicles must be newly imported and meet the safety, environmental, and mechanical standards outlined in the KRG’s 2021 import regulation that states imported vehicles cannot be more than two years old, must comply with at least Euro 4 standards that set strict limits on exhaust emissions, and pass a mechanical inspection. Eligible vehicles must also include standard safety features such as airbags, anti-lock braking systems, and seatbelt warning systems, as well as functioning speed limiters and odometers. Only left-hand drive vehicles are permitted unless an exemption is granted.
The KRG recently approved 74 hybrid and electric vehicles and 89 gasoline-powered models for use as taxis. This decision, meant to modernize the taxi fleet and reduce emissions, has caused a sudden shift in car prices and sales.
Cars made between 2010 and 2016 and that already have taxi plates have dropped in value by several thousand dollars. Although these cars are still legal taxis, many buyers are now choosing to transfer their plates to newer, cleaner hybrid or electric vehicles. As a result, demand for these models has declined, lowering their market value.
At the same time, taxis from the 1990s have gone up in price because they carry taxi plates. Since plates can be transferred for free to a newer approved car, buyers are paying more for old taxis just to get the license.
Market confusion
Rudaw English spoke to car dealerships and taxi drivers to hear what they had to say on the new regulations.
.jpeg "A car dealership in Erbil on May 5, 2025. Photo: Sehend Mayiwar/Rudaw")
“The government is honestly confusing the people. No one knows what to do. Should they buy, sell? They do not know what decision to make,” Mohammed Akram, an employee at the Rahimawa car dealership in Erbil, told Rudaw English.
Another car dealer, Qaraman Ali, who has around 10 cars for sale, said that some of the older model cars he has are worth more money and he will flip them to private cars and sell them. He also has newer taxis that he expects he will lose $1,000 to $2,000 on.
“It is a good decision, the old cars will be reduced in the streets but the cars that cost $10,800 or $10,500 up to $20,000 will lose a lot [of money]. Otherwise the cars below $10,000 do not have much of a problem. There are [Opel] Vectras that cost $2,800 or $3,000 but now they have gone up to $5,000,” Akram said.
“It does not matter if it [the decision] costs us, it is still better,” he added.
The new rules could get some of the oldest cars off the road, according to retired traffic cop Abdulqadir Sadiq. "In Erbil, I’ve seen 1982 models still in use,” he said.
He supports the new regulations. "If 90 percent of people benefit and only a few do not, then the decision should go forward."
‘Taxi drivers do not have the money’
A key concern for drivers—many of whom are already struggling financially—is how they will afford the high cost of upgrading to a newer, more environmentally-friendly car.
“I have had this car for about 10-12 years and I do not have money to change it,” Ismail Mohammed, a taxi driver in Erbil, told Rudaw English.
“I cannot [change it], honestly. Only if the government comes and helps taxi drivers get the cars from a dealership and pay off the rest on a monthly basis, then it would be good,” he added.
Mohammed also noted that many taxi drivers are not financially stable, their business affected by the financial hardships many families are experiencing while the KRG has failed to pay salaries on a regular basis.
“I can say that 50 percent of taxi drivers do not have the money, they only have enough to survive, especially because of the situation now,” he said.
The new policy also keeps the cap on the total number of taxis, meaning no new taxi licenses will be issued beyond the existing quota. Instead, current taxi owners may replace old vehicles with newer models while keeping their license plates. Older taxis can be reclassified as private cars at no cost.
“We thank the government, the decision is very, very good, honestly. They should have made this decision sooner but we ask the Traffic Directorate to make the process a bit easier,” said Hiwa Jawad from the Karokh dealership in Erbil.
A request many people had was to make the process of getting a taxi logo easier. One person told Rudaw that getting a number plate can be done in a couple of hours, but the process of obtaining the logo takes more than a week and drivers have to go to six different offices.
As for the fees for converting cars to taxis, a well placed source at the Interior Ministry told Rudaw English that it depends on the type of car.
“If they are electric or hybrid they do not pay anything. If it is a petrol car that they convert to a taxi then they pay a small sum. I do not think it is much because it is their own number plate. The road, environment and registration fees add up to around 300,000 IQD [around $229] I believe,” the source said.
Sustainability hinges on updated infrastructure
While the new policy has created uncertainty in the market and raised concerns among drivers struggling to afford newer models, many hope the move will ultimately lead to cleaner air, safer roads, and a more sustainable transport system.
Electric vehicles are a growing trend across the Kurdistan Region, but the lack of charging stations, particularly outside of urban centres, is a major deterrent to potential buyers.
“At Kurdneft we have two charging stations, 60 and 120 kWs. We are opening two more branches and both have charging stations,” Shalaw Jalal, an employee at the Kurdneft gas station on Erbil’s Pirmam road, told Rudaw English.
“We already need more. Look how many cars are parked here. The problem is not the cars, the cars are very good, the problem is the charging. There are many places with charging stations but they are very slow, 20 kWs is nothing. Ours is 60 kWs and people still complain,” Jalal added.
According to Jalal, Erbil has it best when it comes to charging stations, compared with Duhok and Sulaimani. He said that Kurdneft will have four stations soon and that almost every gated community has their own, while there is only one each in Duhok and Sulaimani.