More stringent pollution bands in 2024 with EVs/hybrids still benefiting from rebates, current rules apply until 2023 for Singapore’s Vehicular Emissions Scheme pollution ‘tax’

SINGAPORE 

The Land Transport Authority (LTA) announced today that the Vehicular Emissions Scheme (VES) will be extended for the next three years, until 31 December 2025. The current VES rules will apply until 2024, after which the pollutant band criteria will be tightened, and the rebate structure updated. 

Stricter band rules to kick in 2024 

VES was introduced in 2018, and in 2021 the pollutant band rebates/penalties were increased. 
Scroll to the end of this story for a simple explainer on how it works.

The existing rules from 2021 will remain in force until December 31, 2023, after which more stringent rules will apply – see the chart below for the full breakdown. 

The penalties for cars in the C1 and C2 bands will remain the same, while the rebates for cars in the A1 and A2 bands will be announced in 2023.  

Vehicular Emission Scheme (VES) bands : 2024 vs 2021

Which cars will end up in which band?

The VES bands for existing cars look to largely remain the same. That means A1 is reserved for the ‘cleanest’ vehicles on the roads, i.e. the more efficient fully-electric cars. Examples given by the LTA for this band include the Hyundai Ioniq Electric, MG ZS EV – the same cars that now fall under Category A COE after a rule change earlier this year. 

A2 will see mostly mainstream hybrids and performance EVs, including the Toyota Corolla Hybrid, Nissan Kicks E-Power, Kia Niro Hybrid, and Porsche Taycan 4S. 

Most regular gasoline cars will fall into B or C1 bands, which is what we currently see. It’s a little bit unpredictable and cars in the same segment may vary – because if the car exceeds the limit even in just one pollutant, it gets booted to the next band. Hence, the Kia Cerato currently gets a B, while the related Hyundai Avante is an A2. A car being large in size is also no predictor of performance – a Renault Grand Scenic is a B-band car, as is the smaller Audi Q2 SUV. 

The LTA’s cited list of models shows as much, although when it comes to gasoline-only models in the C1 and C2 bands it’s not that informative because it omits vital information, such as engine variant and model year. 

CarBuyer analysis: The cleanest hybrids and EVs get the benefits

With Singapore’s Green Plan now in full swing, we expect the A1 and A2 rebates to be increased over the current S$25,000 and S$15,000 level, because the entire idea of VES is to reward the clean cars, and vice versa. 

“With VES really highlighting the benefits of hybrids, we’ve seen our sales turn around. A few years ago, it would have been 65 percent gasoline-only and 30-plus percent hybrid, but now it’s the opposite,” the sales manager of a Japanese brand told CarBuyer. 

In CarBuyer’s view, the current shift in buying behaviour toward electrified vehicles wouldn’t have been possible without VES. The benefits of hybrids have been clear for years, if not decades, but higher cost has meant that the electrified shift couldn’t happen without legislature to push consumers clearly towards them.

But even with the revisions, it’s still obvious that cleanest hybrids and electric vehicles that will get the benefits of A1 and A2 rebates, and that’s exactly what VES should do. 

Explainer: What is VES? 

VES grades every car or taxi sold in Singapore into bands according to their tested emissions performance across five different types of pollutants: carbon dioxide, hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter.

The bands are, in ascending order of pollution emissions: A1, A2, Neutral, C1, C2. According to the band, the cars are given an Additional Registration Fee (ARF) rebate, to a minimum ARF of S$5,000. For 2021 to 2023, the rebates are S$25,000 for A1, S$15,000 for A2. S$0 for Neutral, penalty of S$15,000 for C1, and S$25,000 for C2. 

Singapore’s modern emissions penalty/rebate scheme came into effect as CEVS, or Carbon Emission-Based Vehicle Scheme (CEVS) in 2015, and was revised in mid 2015 and lasted until 2017. Those schemes took only CO2 (carbon dioxide) into account, and it was expanded to Vehicular Emissions Scheme in 2018, sorting vehicles into bands judged on five pollutant criteria.