Proposal to Review COE Renewal Intervals Given Plan to Transit to Low-emissions Vehicles
Ministry of TransportSpeakers
Summary
This question concerns the rationale behind Certificate of Entitlement (COE) renewal restrictions for various vehicle categories and potential exemptions for low-emission vehicles. Assoc Prof Jamus Jerome Lim inquired why Category C allows multiple five-year renewals while Categories A, B, and D are limited to one, and whether hybrid or electric vehicles could be exempted. Minister for Transport Ong Ye Kung responded that the COE system focuses on congestion control through vehicle growth limits rather than emission regulations, which are addressed by other policies. He clarified that the single five-year renewal for personal vehicles balances the interests of existing and prospective owners by ensuring COEs are recycled for bidding. However, commercial vehicles are permitted multiple renewals within their 20-year statutory lifespan to afford businesses necessary operational flexibility and commercial calculations.
Transcript
50 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.
Mr Ong Ye Kung: 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.
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.
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.
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.