LTA to Revise CVES and ETS to Encourage Greater Adoption of Cleaner Commercial Vehicles
To continue encouraging the adoption of cleaner commercial vehicles, the Commercial Vehicle Emissions Scheme (CVES) and Early Turnover Scheme (ETS) will be extended for two years till 31 March 2025.
From 1 April 2023, the pollutant thresholds and incentives under the CVES, and incentives under the ETS will be adjusted. These adjustments continue to ensure that the total cost of owning and using a cleaner-energy vehicle over its lifespan remains lower than a more pollutive one.
Under CVES, vehicles are classified into Bands A, B or C based on their worst-performing pollutant among the following: carbon dioxide, hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter emissions.
The vehicles are then granted an incentive or subject to a surcharge based on the band they are in. It works in tandem with the ETS, which was structured to encourage owners to replace older, more pollutive diesel vehicles by enticing them with discounts off the Prevailing Quota Premium.
One key change is the adoption of the WLTP test procedures for the new LCVs. As it is more rigorous than the existing testing structure, the pollutant thresholds for CO2, HC, NOx and PM will be adjusted to ensure a balanced distribution of vehicle models across CVES bands in the transition to the more rigorous WLTP test cycle.
Other changes include the reduction in Band A incentives from the current $30,000 to just $15,000, a direct consequence of the narrowing price gulf between ICE and EV offerings. Band B, which consists mainly of petrol vehicles, will be stepped down from the current $10,000 to $5,000. The surcharge for more pollutive ICE models in Band C (mainly diesel) will be raised from the current $10,000 to $15,000.
An end date has also been set for the ETS - 31st March 2025. Vehicle owners may wish to utilise the ETS to turnover their vehicles early before the ETS for LCVs is discontinued. The Government will be studying other means, including regulatory levers, to encourage the early turnover of older commercial vehicles and buses in the future. These changes are in line with the Government’s vision to have all vehicles run on cleaner energy by 2040.
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