Singapore’s new Vehicle Emissions Scheme, which starts on the 1st of January 2018, is better than preceding schemes, but it is far from perfect.
IT will be interesting to see how the line-up of new cars will change come January 2018, when the new Vehicular Emissions Scheme (VES) kicks in.
The VES, which metes out tax rebates or surcharges based on how environmentally sound (or unsound) a car is, is the latest attempt by the Government to nudge consumers towards cleaner choices.
This scheme dates back to 2001, when the Green Vehicle Rebate (GVR) was launched. It granted a 40 percent tax break to buyers of cars deemed cleaner than conventional petrol and diesel models.
Because it did not stipulate the emission levels, and its rebate was a flat percentage rate, the GVR led to a proliferation of high-end hybrid models, and then later, a slew of compressed natural gas cars – most of them poorly converted from petrol models.
Despite critism that the GVR was technology-biased, it took the Government more than a decade to revise it.
In 2013, the Carbon Emissions-based Vehicle Scheme (CEVS) replaced the Green Vehicle Rebate.
It meted out tax rebates and surcharges according to a vehicle’s carbon emission readings – regardless of its engine technology.
The initial CEVS was relatively lax, and the majority of new cars on sale either qualified for rebates or fell into the neutral band (where neither rebate nor surcharge applied).
In 2015, the CEVS was made more stringent to encourage consumers and retailers to pick even cleaner models.
THE VEHICLE EMISSIONS SCHEME RELIES MORE HEAVILY ON THE STICK THAN THE CARROT TO SHAPE CAR-BUYING BEHAVIOUR.
Under VES, the petrolelectric hybrid Prius and turbo-diesel Megane will be reclassified to their disadvantage.
Despite that, the scheme has cost over $100 million in forgone taxes, an indication that the industry was still able to meet the CEVS carrot criterion fairly easily.
But things are expected to change come January.
The VES will not gauge how clean (or dirty) a car is based solely on its carbon dioxide (CO2) emission.
Four other tailpipe pollutants will be taken into consideration, namely hydrocarbons, carbon monoxide, nitrogen oxides and fine particulate matter.
A car will be judged based on its worst-performing exhaust emission component.
So, a model with low carbon dioxide emission which currently qualifies it for a generous tax rebate under CEVS could well be slapped with a VES surcharge from January 1 next year if any of its other four tailpipe pollutants is high.
Diesel models are likely to fall into this group. Diesel engines produce relatively low CO2, but tend to emit more nitrogen oxides and particulate matter.
In fact, out of 11 models (petrol and diesel) sampled by The Straits Times, none qualified for a tax break under VES rules. Today, nine of them qualify for rebates, while two are in the neutral band.
The models with the biggest swings include the Toyota Prius 1.8-litre petrol-electric hybrid and Renault Megane Sedan 1.5-litre turbo-diesel.
Both cars currently qualify for the top-tier $30,000 rebate. But come 2018 January 1, the Prius will be in the Neutral band, while the Megane will face a $10,000 surcharge.
The Prius’ banding, however, is based on its Euro 5 readings. The Euro 6 variant, which will arrive in Singapore before September, should have a more favourable outcome.
The fact that the Vehicle Emissions Scheme judges a car based on its worst-performing tailpipe pollutant points to a scheme which relies more heavily on the stick than the carrot to shape car-buying behaviour in Singapore.
A banding system based on a composite of all five tailpipe pollutants might be a better way of gauging how clean a car is.
A BANDING SYSTEM BASED ON A COMPOSITE OF ALL FIVE TAILPIPE POLLUTANTS MIGHT BE A BETTER WAY TO GAUGE HOW CLEAN (OR DIRTY) A CAR’S EXHAUST GASES ARE.
This way, a car which scores fairly well for four components is not penalised just because it does not do well for one.
This is the same principle by which students are ranked. Barring English, a red mark for any other subject does not translate to a failed exam.
If a composite system is in place, a car like the Prius would still qualify for rebate.
Another thing that might make the new VES seem unfair is a particulate matter exemption granted to petrol cars with port fuel injection (PFI).
In PFI engines, fuel is injected just before the combustion chamber. The process results in less particulate matter.
But it does not mean these engines produce zero particulate matter. An exemption thus gives some models an edge over others, because it is tantamount to according these models a zero reading for one of five tailpipe pollutants.
Taking the school analogy again, it would be like allowing some O-level students entry into, say, polytechnic with only four subjects instead of the minimum five.
Explaining the exemption, the National Environment Agency (NEA) says the European Commission states that the level of particle emission from PFI engines “is low”.
“Therefore, the EC has limited the particle emission regulatory action to gasoline direct injection vehicles,” the NEA adds. (The NEA has since come out to say that PFI engines will be subject to particulate matter readings from July 2018 under the VES.)
Does Singapore have to follow exactly what other jurisdictions do?
Clearly not. In this instance, Singapore has been fighting a losing battle against particulate matter in the air.
Our readings are still above internationally acceptable levels, despite decades of efforts to bring it down.
So, a particulate matter exemption for PFI models is doubly dubious. Especially when such models make up the vast majority of cars sold here.
In essence, the VES is superior to preceding schemes. But it could have been much better.
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