Budget 2017: Enhancing vehicle incentive schemes for a cleaner environment

Budget 2017: Enhancing vehicle incentive schemes for a cleaner environment

Finance Minister Heng Sweet Keat says the changes to the schemes are aimed at nudging car buyers towards more environmentally-friendly vehicles.

SINGAPORE: The Government will adjust two vehicle incentive schemes in a bid to nudge car-buyers towards cleaner and more environmentally-friendly models, said Finance Minister Heng Swee Keat in his Budget address on Monday (Feb 20).

Mr Heng said the current Carbon Emissions-Based Vehicle Scheme (CEVS) will be replaced with a new scheme that would consider four other pollutants on top of carbon dioxide. The new Vehicular Emissions Scheme (VES) will include nitrogen oxides, hydrocarbons, particulate matter and carbon monoxide.

The CEVS was implemented in 2013 to encourage car owners to purchase vehicles with low carbon emissions. After a revision in 2015, the scheme provided for rebates of between S$5,000 and S$30,000 if vehicles registered from Jul 1 of that year were assessed to have carbon emissions of less than or equal to 135g of carbon emissions per kilometre. The rebates were offset from the vehicle’s Additional Registration Fee (ARF).

By including four more pollutants, Mr Heng said the new scheme hopes to account more holistically for the health and environmental impact of vehicular emissions. According to earlier reports, any regulation on nitrogen oxides emissions, for example, could affect diesel vehicles more than those that run on petrol. Nitrogen oxide emission has been linked to health issues such as lung cancer.

The pollutant gained worldwide recognition after the Volkswagen scandal erupted in 2015, when the German car company admitted to cheating on emissions tests in the United States, and was in fact releasing nitrogen oxide pollutants that exceeded legal limits significantly.

Mr Heng said the new scheme will run for two years starting from January 2018. Meanwhile, the current CEVS will be extended until the end of 2017.

Mr Heng said another scheme for commercial diesel vehicles, the Early Turnover Scheme, will also be enhanced and extended. The scheme was introduced in 2013 to encourage owners of the older and more pollutive Euro II and III commercial vehicles to replace them for the cleaner Euro VI ones. Mr Heng said about 27,000 such vehicle owners have made use of this scheme since it was introduced.

He said the scheme, which was meant to expire in July this year, will be extended to Jul 31, 2019. More details on this will be shared by the Transport Ministry as well as the Environment and Water Resources Ministry during their Committee of Supply debates in March.

Source: CNA/mo