The New Drive To Go Green
In Budget 2012, it was announced that the new Carbon Emissions-based Vehicle Scheme (CEVS) will replace the Green Vehicle Rebate Scheme (GVR), which expires at the end of this year. The CEVS is based on carbon efficiency and will reward or penalise motorists based on the carbon dioxide (CO2) emissions of their vehicles.
In a nutshell
The GVR gives green vehicles such as petrol-electric hybrid, compressed natural gas and bi-fuel cars a rebate of up to 40 per cent of their open market value, which is offset against the vehicle's Additional Registration Fee (ARF). The downside of the GVR is that it is technology-dependent, and doesn't take into account the actual impact on the environment. Some hybrid vehicles with large engine capacity are in fact not very environmentally-friendly, while some petrol cars with smaller engine capacity emit less carbon on the whole.
The new CEVS will be rolled out in two stages. The first phase will start from 1 January 2013 when buyers of cars with low CO2 emissions will enjoy tax rebates on their ARF. The second phase will start on July 1, when an additional registration surcharge will be levied on cars with high carbon emissions.
Transport Minister Lui Teck Yew explained that the two-stage implementation will give the motor industry, as well as consumers, more time to adjust.
What it means for the consumer
The CEVS takes a broader outcome-based approach that considers vehicles' carbon emissions and fuel efficiency to encourage consumers to shift to low emission models. (Carbon emissions refer to the release of CO2 from the use of a vehicle; they are an indicator of the amount of fuel the vehicle uses. The g/km is a measure of the weight of carbon dioxide released for every kilometre that the vehicle is driven.)
Under the CEVS, all new and imported used cars registered from 1 January 2013 with low carbon emissions of less than or equal to 160g/km will qualify for rebates of between $5,000 and $20,000 which can be used to offset the vehicle's ARF. Cars with high carbon emissions equal to or more than 211 g/km will incur a registration surcharge of between $5,000 and $20,000.
Judging by last year's car buying pattern, 60 per cent of cars registered fell into a neutral category of "no rebate and no surcharge".
Diesel cars
In the scheme, diesel cars that fall within the low emission band will get the rebate, provided they meet the Euro V emissions standard. They too will be penalised if they exceed the 210g/km mark. However, non-Euro V-compliant diesel models will not enjoy the rebate, even if they fall within the low emission band. If these models fall within the surcharge bands, the appropriate CEVS surcharge will still apply.
Fuel economy labelling
After the Land Transport Authority takes over the administration of the Fuel Economy Labelling Scheme around the middle of this year, they will set up a new online database and online fuel cost calculator so that buyers can compare the carbon emissions and fuel efficiency performance data across car models. Buyers can also refer to new fuel economy labels at car showrooms to find out a model's carbon emissions and its banding under the new scheme.
