THE new Vehicular Emissions Scheme (VES) will be more stringent and have five bands instead of the current nine, with the maximum rebate or surcharge lowered by S$10,000, as the government heads towards a diesel-free city.

The current Carbon Emissions-based Vehicle Scheme (CEVS) will be replaced by VES from Jan 1, 2018 for two years.

For cars, the four bands each for rebates and surcharges have been S$5,000, S$10,000, S$15,000 and S$30,000 since July 1, 2015.

But under VES, four more pollutants are included in the rebate/surcharge criteria - hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter (PM).

VES has only two rebate/surcharge bands for cars and taxis. For cars, they are S$10,000 and S$20,000, with the VES rebate or surcharge to be determined by its worst-performing pollutant.

As petrol-engine cars emit lower levels of nitrogen oxide and particulate matter than diesel-powered versions, carbon dioxide will still be the key element in determining financial incentives or disincentives.

For cars, the carbon dioxide neutral band - which neither attracts a rebate nor incurs a surcharge - has been tightened from the current 136-185 g/km to 125-160 g/km. And the higher rebate is now capped at below 90 g/km.

So while petrol-electric hybrids, such as the Toyota Prius, will still qualify for the maximum rebate, they will get only S$20,000 instead of the current S$30,000.