Budget 2020: Govt aims to phase out all vehicles with internal combustion engines by 2040

BY 2040, the government hopes to phase out all vehicles with internal combustion engines and replace them with ones that run on cleaner energy.

To promote this, Deputy Prime Minister and Finance Minister Heng Swee Keat introduced three measures in his Budget speech on Tuesday.

First, the government will enhance incentives to encourage drivers to adopt cleaner and environmentally friendly vehicles.

For light goods vehicles, it will introduce a scheme similar to the existing Vehicular Emissions Scheme (VES) for cars and taxi. Under VES, those who choose cleaner models will get upfront rebates of up to S$20,000 for car buyers and up to S$30,000 for taxi operators.

Details of the upcoming scheme for light goods vehicles will be announced at the Ministry of the Environment and Water Resources' Committee of Supply.

Meanwhile, those who buy fully electric cars and taxis will also receive a rebate of up to 45 per cent on the additional registration fee, capped at S$20,000. This EV Early Adoption Incentive will be available for three years, starting from January 2021.

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The government will also revise the road tax methodology for cars from January 2021 to reflect current trends in vehicle efficiency. This will lead to an across-the-board reduction in road tax for electric vehicles (EVs) and some hybrids, Mr Heng said.

Second, the public charging infrastructure for EVs will be expanded.

There are now about 1,600 charging points island-wide. The government will work with the private sector to deploy more chargers in public car parks. The aim is to deploy up to 28,000 chargers by 2030 at public car parks around Singapore, Mr Heng said.

Third, the government itself will progressively procure and use cleaner vehicles, he added.

"We are placing a significant bet on EVs, and leaning policy in that direction because it is the most promising technology," Mr Heng said.

"It also requires a significant increase in demand to justify the infrastructure investment. This is a significant undertaking involving multiple agencies."

Mr Heng pointed out that vehicles with internal combustion engines contribute to pollution, and the domestic transport sector contributes a significant amount of greenhouse gas emissions. Many major cities have already set "ambitious" goals to phase out such vehicles and to shift to cleaner technologies, he said.

For more Budget 2020 stories, visit bt.sg/budget20.