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Written Reply by Minister for Transport Ong Ye Kung to Parliamentary Question on Proposal to Review COE Renewal Intervals Given Plan to Transit to Low-Emissions Vehicles

05 Apr 2021 In Parliament

Assoc Prof Jamus Jerome Lim asked the Minister for Transport in light of the Government’s efforts to transition the local automobile fleet toward low-emissions vehicles 
a.     why COEs for vehicles in Categories A, B and D can only be renewed for a 5-year period once, compared to those in Category C which can be renewed multiple times until the end of their statutory lifespan even if the latter category is more likely to generate higher emissions; and 
b.     whether the Government will consider exempting the once-only renewal of 5-year COEs for hybrid and electric vehicles if these vehicles satisfy the necessary vehicle emissions inspections.
Reply by Minister for Transport Ong Ye Kung:
1.     The Certificate of Entitlement (COE) system is a major policy for sustainable development. But its primary objective is to control congestion by limiting the growth of the vehicle population. For regulating vehicles’ emission levels, there are other policy levers.
2.     Given this, the COE system is designed with equity as a key principle. This means striking a balance between the needs of existing and prospective owners. If we allow repeated five-year COE renewals for these vehicles, there will be fewer COEs recycled for bidding, hence benefitting existing owners at the expense of prospective ones. Therefore, we allow only a single five-year renewal, provided that at the end of it, the vehicle is de-registered.
3.     This measure was introduced on an exceptional basis for vehicles largely for personal use, i.e. cars and motorcycles, typically in Categories A, B and D. This is because there were owners who felt that at the point of expiry of their COEs, their vehicles may not last another full 10 years.
4.     The considerations for goods vehicles and buses, which use a Category C COE, are different. These vehicles are typically used by businesses and have a statutory lifespan of 20 years. We decided to accord businesses the flexibility to make their commercial calculations, and to renew their Category C COEs at five-year durations, within the vehicles’ statutory lifespan.