More rebates for cleaner vehicles, higher surcharges for more pollutive models from 2021

More rebates for cleaner vehicles, higher surcharges for more pollutive models from 2021

BlueSG electric cars file photo
Electric cars operated by car-sharing service BlueSG in Singapore. (File photo: Gaya Chandramohan)

SINGAPORE: Buyers of cleaner cars and taxis can get bigger rebates from next year, while those who purchase vehicles that produce more emissions can expect to pay higher surcharges, said the National Environment Agency (NEA) and the Land Transport Authority (LTA) in a joint media release on Thursday (Nov 12).  

These come under the enhanced Vehicular Emissions Scheme (VES), which take effect on Jan 1, 2021, and will last until Dec 31, 2022.

The scheme was introduced in 2018 to encourage drivers to choose vehicles with lower emissions across five pollutants, including carbon dioxide, hydrocarbons and carbon monoxide.

Rebates and surcharges are determined by a vehicle’s band under the scheme: A1, A2, B, C1 or C2, with A1 being the cleanest and C2 being the most pollutive.

Under the enhanced VES, new cars and imported used cars in bands A1 and A2 will see a S$5,000 increase in rebates. Taxis in the same bands are eligible for S$7,500 more in rebates.

This brings rebates to S$25,000 for A1 cars and S$37,500 for A1 taxis, and S$15,000 for A2 cars and S$22,500 for A2 taxis.

With the Electric Vehicle Early Adoption Incentive also starting on Jan 1, buyers of new fully electric cars could save up to S$45,000, while buyers of new fully electric taxis can save as much as S$57,500.

“The higher savings will encourage electric vehicle adoption by further narrowing the upfront cost gap between electric cars and their internal combustion engine equivalents,” NEA and LTA said.

READ: Expanding Singapore's electric vehicle charging network will give drivers 'peace of mind', says local firm

In his Budget 2020 speech, Deputy Prime Minister Heng Swee Keat announced that Singapore aimed to phase out the use of internal combustion engine vehicles here by 2040, and outlined a slew of measures aimed at encouraging the use of more environmentally friendly alternatives, such as electric vehicles.

Enhanced VES
Increases to rebates and surcharges under the enhanced Vehicular Emissions Scheme. (Table: National Environment Agency and Land Transport Authority)

On the flip side, new cars and imported used cars in the C1 and C2 bands will see surcharges increase by S$5,000 while taxis in the same bands will see surcharges go up by S$7,500.

This means that surcharges will rise to S$15,000 for C1 cars and S$22,500 for C1 taxis, and S$25,000 for C2 cars and S$37,500 for C2 taxis.

The increased surcharges will kick in on Jul 1, 2021, to give the market time to adjust.

Surcharges and rebates do not apply to band B vehicles.

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“The VES, which came into effect on Jan 1, 2018, is aimed at encouraging buyers to choose car models with lower emissions across five pollutants. This helps reduce carbon emissions and improve ambient air quality,” NEA and LTA said.

“The scheme has been effective in encouraging the purchase of cleaner car models.”

Enhanced VES 2
New rebates and surcharges under the enhanced Vehicular Emissions Scheme, and pollutant level guidelines for the five different bands of vehicles. (Table: National Environment Agency and Land Transport Authority)

According to figures released by NEA and LTA for the period between the third quarter of 2018 and the first quarter of 2020, the number of new cars registered in Certificate of Entitlement (COE) categories A and B that qualified for band A1 and A2 rebates went up by about 60 per cent.

During the same period, the number of new cars subject to surcharges under bands C1 and C2 fell by around 20 per cent.

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The enhanced VES will be in effect until Dec 31, 2022, with the scheme likely to continue evolving beyond that to further promote the use of cleaner vehicles.

“NEA and LTA regularly engage the vehicle industry on policies to reduce vehicular emissions and improve ambient air quality,” the agencies said. 

“To this end, NEA will be contacting the industry in due course for consultations on the possibility of tightening VES band thresholds in future.”

More information on VES is available on the One Motoring website.

Source: CNA/kg(gs)

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