By Faiza Tehseen ISLAMABAD, Feb. 17 (INP-WealthPK): With the rise in the number of eco-friendly vehicles worldwide, the need for the production of green tyres has also risen manifold. The market size of eco-friendly tyres was $77.4 billion in 2021, which is estimated to cross $175 billion mark at a compound annual growth rate (CAGR) of 11.4% by 2027. The increasing demand for green tyres is going to open new business horizons for Pakistan as well to not only meet the local demand but also capture the international market. Fuel efficiency, wet grip and noise are the three main characteristics of eco-rating. The new European Union legislation coming into effect on May 1, 2021, has made it mandatory for manufacturers to display an eco-rating on every new tyre sold. Eco-friendly tyres employ a special feature of low-rolling resistance causing a decrease in the power sapping in the tyre rotation along with the quarter decrease of CO2 emissions and keeping the tyre tread intact for longer periods. As logistics are mostly done by road, Pakistan has to import non-eco-friendly TBR (truck & bus radial tyres) on a large scale. Pakistan’s total imports of TBR are increasing by 10% per annum. However, with the world focusing on reducing carbon emissions and adapting to clean sources, Pakistan has also launched a project to produce green tyres. In this respect, Servis Industries Pakistan Ltd, a multinational tyre manufacturing firm, Chaoyang Longmarch Tyre Co Ltd of China and Myco Corporation, an arm of Longmarch Co in Pakistan, had signed an agreement in 2019 to launch the first-ever green or eco-friendly tyres manufacturing plant on a 50-acre piece of land in the industrial town of Nooriabad in Jamshoro district of Sindh. The project has now been operationalised and aims to export at least 85% of its tyres production out of a total capacity of 600,000 tyres per annum. The project has been launched keeping in view the environmental management, raw material selection and production efficiency, especially reduction in carbon emissions. At completion, the green-tyre manufacturing plant would save a lot of foreign exchange for Pakistan, besides creating jobs. This project will also encourage the tyre manufacturers in the country to turn to green tyre production. Pakistan imported re-treaded or used pneumatic tyres of rubber, solid or cushion tyres, tyre treads and tyre flaps of rubber under HS code 4012 valuing at $490 million in 2020. The following chart shows the details: Source: https://trendeconomy.com/data/h2/Pakistan/4012 Europe is the largest market in terms of green tyres with a share of about 40% followed by 25% of China. In the production prospect, semi-steel tyre is the largest sector to excel followed by light/heavy commercial vehicle. In 2017, Pakistan’s rubber tyre and tube market size was valued at $762.7 million, which is forecast to reach $2.77 billion by 2025 with an expected CAGR of 17.4% (from 2018 to 2025). Pakistan has generated the highest revenue from the radial type by design segment accounting for $595.8 million and it is estimated to reach $2.11 billion by 2025 with a CAGR of 17.1% during the forecast period.