Enhanced incentives for encouraging green motoring in Singapore

While reading the Budget 2014 statement in parliament yesterday, Deputy Prime Minister Tharman Shanmugaratnam announced enhancements and extensions to two existing schemes, in a bid to further encourage green motoring here. 

Firstly, the 'Early Turnover Scheme' will be enhanced. The scheme was announced to encourage owners to replace old diesel powered commercial vehicles with newer models that comply with the - cleaner and greener - Euro 5 emission standard. 

The scheme, introduced last April, allows owners to pay a discounted Prevailing Quota Premium (PQP) to register a replacement without having to bid for a Certificate of Entitlement (COE). The PQP is a three-month moving average of the COE premium.

Vehicle owners can transfer the unused period of the COE to the replacement vehicle while also receiving a bonus COE period for the replacement. The bonus COE period is derived from a proportion of the remaining 20-year lifespan of the existing vehicle. These are used in a formula to calculate the discounted PQP.

Yesterday, Mr. Tharman announced the bonus period will be enhanced to further encourage owners to replace their vehicles early. Full details are expected to be uncovered during the debate on the budget of the Ministry for Environment and Water Resources.

However industry players believe the scheme has not been popular and said it has to be more generous to work. Mr. Ron Lim, General Manager of Tan Chong Motor, suggested the percentage of the bonus COE could be raised by another 10 percent.

Secondly, the Carbon Emissions-Based Vehicle Scheme (CEVS), which provides rebates or adds a surcharge depending on emissions output, will be extended by six months to end in June 2015.

Also, Mr. Tharman revealed the CEVS scheme has shown encouraging results with more than 50 percent of new cars registered last year receiving rebates while about 10 percent paying surcharges. This was an improvement in comparison to 2012, where only 40 percent would have qualified for a rebate and 14 percent would have paid a surcharge.

Additionally, Mr. Tharman added the Government will observe the full impact of the scheme before refining it.