Scheme to drive use of cleaner commercial vehicles extended by 2 years till March 2027

SINGAPORE – The Commercial Vehicle Emissions Scheme (CVES), which encourages the adoption of cleaner-energy light commercial vehicles in Singapore, will be extended by two years till March 31, 2027, with the incentive for electric vehicles in Band A staying at $15,000.

But the incentive of $5,000 for Band B – comprising mainly petrol vehicles – will be removed. The surcharge for the most pollutive Band C, composed mostly of diesel-powered commercial vehicles, will be raised from $15,000 to $20,000, said the National Environment Agency (NEA) and Land Transport Authority (LTA) on Dec 30.

The scheme was previously extended till the end of March 2025.

The agencies said in a statement that the Early Turnover Scheme for heavy commercial vehicles – meant to encourage owners of older diesel vehicles and buses to switch to cleaner new vehicles – will also be extended until Dec 31, 2025, and will be discontinued after that.

Introduced in 2021, the CVES applies to all new and used imported light commercial vehicles – such as light goods vehicles and small buses not exceeding 3,500kg in maximum laden weight – and classifies these vehicles into bands based on their pollutant levels. Buyers of these vehicles are then given an incentive, or subjected to a surcharge, based on the band their vehicle belongs to.

The authorities said the latest changes are in line with the Government’s vision to have all vehicles run on cleaner energy by 2040.

LTA and NEA noted that at present, there are more light commercial vehicles in Band A in the market than when the scheme was introduced in 2021.

As the least pollutive vehicles, this top band of vehicles has the lowest total cost of ownership over their lifespans, NEA and LTA said.

Based on available estimates of popular vehicle models as at December 2024, the total cost of ownership after 10 years for Band A vehicles was $123,300, after factoring in the CVES incentive. Vehicle models that fall into this category include electric vans BYD T3, Citroen E-Berlingo and Mercedes e-Vito.

The total cost of ownership for Band B vehicles was higher, at $147,500, while that of diesel vehicles in Band C stood at $170,900 due to the CVES surcharge.

Some examples of vehicle models belonging to Band B are the Honda N-Van Style Fun, the Suzuki Spacia Base van and the Nissan NV200 van. Some models that come under Band C are the Toyota Hiace Van, the Peugeot Partner 1.5 BlueHDI van and the Mercedes Vito 114 van.

Separately, the Early Turnover Scheme provides owners of older diesel-powered heavy commercial vehicles with a discount on the certificate of entitlement (COE) quota premium they must pay, should they switch to cleaner vehicles.

The prevailing quota premium is the moving average of COE prices over the past three months.

Under the extended scheme, the incentives for heavy commercial vehicles will remain unchanged. They range from 25 per cent to 90 per cent, depending on the existing vehicle and its emission standard, and the replacement vehicle.

The extension of the scheme till end-2025 applies only to heavy commercial vehicles, such as heavy goods vehicles and buses that exceed 3,500kg in maximum laden weight.

NEA and LTA said the Early Turnover Scheme for light commercial vehicles will end after March 31, 2025, as announced in 2022.

As at September 2024, around 70,000 vehicles eligible for the Early Turnover Scheme – introduced in 2013 – have been replaced with cleaner models, added the agencies.

The authorities said about 80 per cent of light commercial vehicles registered from April 2021 to September 2024 were cleaner models.

Motor dealers The Straits Times interviewed had mixed reactions to the news.

Mr Edward Tan, executive director of Hong Seh EVolution, which distributes Chinese EV brands DFSK and SRM, said the extension of the CVES would help the company to encourage the switch to electric commercial vehicles.

Its DFSK EC35 electric vans and EC31 electric trucks are Band A vehicles, and qualify for the $15,000 incentive.

Mr Tan hopes that the benefits of the CVES would be extended to heavy commercial vehicles too.

Mr Neo Tiam Ting, director of commercial vehicle dealership ThinkOne, is of the view that the extension of the Early Turnover Scheme for heavy commercial vehicles till end-2025 is insufficient.

He added that owners of heavy commercial vehicles do not enjoy any incentives from the CVES, and will stop receiving benefits once the Early Turnover Scheme ends.

Mr Neo noted that owners of heavy commercial vehicles may face difficulties switching to cleaner vehicles as there are fewer alternatives on the market. Hence, some may choose to renew the COE of their petrol or diesel vehicles, potentially resulting in greater pollution in the long term.

On the impact of the CVES extension, he said some drivers still have no option but to buy light commercial vehicles in bands B and C because of their longer travelling range and the lack of available charging points here.