Importers phasing out diesel vans and light trucks ahead of new emissions scheme

A diesel model's price will be at least $20,000 more than that of the petrol version.
A diesel model's price will be at least $20,000 more than that of the petrol version.ST PHOTO: LIM YAOHUI

SINGAPORE - Diesel vans and light trucks may be reaching the end of the road as a new emissions scheme starting in April makes them significantly costlier.

Vehicle importers are taking the cue, with at least two having phased out diesel-powered light commercial vehicle models altogether. Nissan agent Tan Chong Motor said it will offer only petrol commercial vehicles from April, while Renault agent Wearnes Automotive said it will offer only an electric version of its Kangoo van.

In last year's Budget, the Government announced the Commercial Vehicle Emissions Scheme (CVES), with tax rebates and surcharges determined by how much pollutants a vehicle emits.

An electric van can qualify for a $30,000 rebate, while a clean petrol model can get $10,000. But most, if not all, diesel models will fall into the surcharge band and be liable for a $10,000 surcharge.

This will make a diesel model's price at least $20,000 more than that of the petrol version, observers said.

Automobile Importer & Exporter Association adviser Neo Nam Heng said the price gap is actually $25,000 after factoring in the higher manufacturing cost of diesel models. For many light commercial vehicles, $25,000 translates to 25-30 per cent of the selling price.

"I have been lobbying for incentives to encourage the adoption of cleaner commercial vehicles for 10 years now," Mr Neo said, adding that with the CVES, more than three-quarters of the predominantly diesel vehicle population will switch to petrol "in three to five years".

Tan Chong International managing director Glenn Tan said those who switch will not only incur lower upfront costs, they will also enjoy lower vehicle maintenance costs and lower road tax.

"In today's climate, every dollar saved is important," he added.

On top of that, fleet owners stand to gain enhanced incentives if they replace their older diesel models with petrol or electric variants. Together with the CVES, an owner can save up to $50,000 in total upfront cost.

But commercial vehicle owner Andy Goh is not entirely convinced. Mr Goh said those who clock high mileage and lug heavy goods may still prefer diesel because higher petrol pump prices will negate tax savings.

"Many of the contractors I work with rushed to buy diesel models already," he said. "That's why COE for commercial vehicles has shot up."

Mr Goh said he himself has replaced his diesel Citroen Berlingo van with a petrol-driven Hyundai Avante passenger car, since he does not need to carry much cargo.

Asian Clean Fuels Association executive director Clarence Woo said the CVES is a good policy tool as it addresses many pollutants in tailpipe emissions other than carbon dioxide.

The scheme however, should extend to heavy commercial vehicles - which are also a major source of emissions on the road. But suitable alternatives must be found. "The power, torque and range which these vehicles need may not be supported by petrol and hybrids," Mr Woo said.

He noted that Japan is looking to hydrogen fuel cells for this category of vehicles, but the cost of infrastructure and fuel supply remains a challenge.