Singapore is exploring the possibility of introducing biofuels at the pumps.
Biofuels are derived from plant sources such as palm, sugar cane, corn and algae. If cultivated responsibly, they are considered greener than fossil fuels.
The National Environment Agency has reached out to the auto and transport industries to gauge the feasibility of such a move.
The agency would, however, only say that the move was part of its "review of fuel quality standards".
In response to queries from The Straits Times, it said: "NEA consults the industry on these matters and will share more information when there are significant developments."
Singapore last dabbled in biofuels eight years ago when Shell, Daimler and Volkswagen ran a fleet of diesel cars on fuel blended with palm-based biodiesel.
The move to revisit biofuel is taking the industry by surprise. Players were asked if the fuel would be suitable for current models as well as older models, but there was no timeframe of when a policy on biofuels might be introduced.
Oil industry consultant Ong Eng Tong said: "Oil is so cheap now; introducing biofuel will jack up costs, and will cause a lot of unhappiness."
Biofuels typically cost 10 per cent to 20 per cent more than fossil fuels, and governments have often had to subsidise them to make them viable.
"If we go towards the Euro 6 (emission standard), the fuel quality will be very good already," Mr Ong said, adding that if Singapore wanted cleaner vehicles, it should push for electric vehicles instead.
Mr Michael Wong, general manager of Isuzu agent Triangle Auto, said unless there is real interest, the move "might suffer the same fate as CNG".
He was referring to Singapore's brief dalliance with compressed natural gas. After it was launched 10 years ago as an alternative fuel, with green rebates accorded to gas-powered vehicles, it went out of favour after about five years, when tax incentives were reduced.
The building of new refuelling stations was also stalled as the gas pipeline network did not grow as quickly as envisioned.
Mr Wong said neighbouring countries use biofuels because they have feedstock such as palm and sugar cane, "so there is a compelling reason for them to push for it".
The issue of biofuels has also been controversial as some quarters believe it would cause food prices to soar as more land and resources are diverted to growing fuel crops. Environmentalists also say the slash-and-burn method used by growers is increasingly a hazard, demonstrated in no small way by the current haze blanketing the region.
"Green is relative," said Mr Wong.
But the Republic's two main public bus operators seem to be open to the idea.
"We are always open to new and greener fuel options so long as they are commercially viable," said SBS Transit spokesman Tammy Tan.
SMRT spokesman Patrick Nathan said: "SMRT continues to study renewable, clean-burning and environmentally sustainable energy options that can be used by its fleet of vehicles."
