From 2018, a car's emissions will have to be far cleaner than they are today for the vehicle to qualify for tax incentives.
Finance Minister Heng Swee Keat yesterday said the Carbon Emissions-based Vehicle Scheme (CEVS), which dispenses rebates or surcharges according to how much carbon dioxide a car or taxi emits, will also take into account four other tailpipe pollutants.
The Straits Times understands these are nitrogen oxides, hydrocarbons, carbon monoxide and fine particulate matter.
The CEVS will be renamed Vehicular Emissions Scheme (VES) to reflect the changes, and will run for two years from Jan 1 next year. In the interim, the CEVS - which was to expire at end-June - will be extended to Dec 31. Mr Heng said the revision will "account more holistically for the health and environmental impact of vehicular emissions".
"With this scheme, we hope to nudge car buyers towards cleaner and environmentally friendly models," he added.
Details of the new scheme are expected during the Committee of Supply debates over the next two weeks.
Observers said the changes are likely to affect diesel vehicles most.
Although they produce less CO2 than petrol equivalents, diesel engines tend to emit more nitrogen oxides - which are harmful to the environment and can also lead to serious health issues - and particulate matter.
Meanwhile, the minister said the Early Turnover Scheme (ETS) will be extended and enhanced.
The scheme encourages fleet owners to replace their older, more pollutive diesel commercial vehicles with cleaner new ones, by giving them certificate of entitlement (COE) concessions.
Mr Heng said the scheme will go on for two more years till July 31, 2019, and will target owners of Euro 2 and 3 vehicles, who must replace them with Euro 6 models.
He said the government will "further enhance the COE bonus period for light goods vehicles".
The motor industry was not entirely surprised with the announcements.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motors, said the industry had asked for any change to the CEVS to take effect from Jan 1, 2018, when Euro 6 emission standards for diesel vehicles kick in. "We don't want a situation where dealers are stuck with affected models," he said.
Mr Lim said the ETS changes are interesting, adding: "The existing scheme is not as attractive to light commercial vehicles as it is to heavy commercial vehicles. It will be interesting to see how they will enhance it." Mr Lim noted that there are more than 13,000 commercial vehicles with expiring COEs up to March, and "81 per cent of them are light commercial vehicles".