The VES takes into consideration a vehicle's emissions of four pollutants, namely hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOX) and particulate matter (PM), in addition to the vehicle's carbon emissions, to encourage consumers to shift to less pollutive models.

Cars registered from 1 January 2018 will be assessed based on their emissions of HC, CO, NOX), PM and CO2). The VES rebate or surcharge will be determined by the worst performing pollutant.

Cars that fall under bands A1 and A2 will qualify for rebates which are offset against the car's ARF payable. Cars that fall under bands C1 and C2 will incur a corresponding registration surcharge. Cars are also subject to a minimum ARF payable of S$5,000. The minimum ARF payable will ensure that cars continue to enjoy a certain amount of Preferential Additional Registration Fee benefit when they are deregistered early. This is in line with the existing policy objective of encouraging timely deregistration and keeping Singapore car fleet young.

As electric cars and plug-in hybrid cars consume electricity which produces CO2 emission at the point of power generation, an emissions factor will be applied to their electricity energy consumption to compute their equivalent CO2 emission. The emissions factor will be announced closer to the date of implementation of the VES.