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SINGAPORE: Further injections of Certificates of Entitlement (COEs) could be considered if distance-based charging is implemented in the future, said Transport Minister Chee Hong Tat in parliament on Tuesday (Nov 12).

This is aside from the injection of up to 20,000 COEs in the next few years across all vehicle categories, starting next February.

Mr Chee made clear the upcoming injection is not linked to the implementation of distance-based charging. 

“We have not made a decision on whether to implement distance-based charging, though ERP 2.0 gives us the option to do so,” said Mr Chee in response to questions from Members of Parliament (MPs) on the injection of COEs. 

“We will need to study this further, including with the data from ERP 2.0, as there are trade-offs we need to think through carefully.” 

He added that if distance-based charging were to go ahead, it would give the Land Transport Authority (LTA) an “additional tool to manage congestion”. 

“There is scope to consider a further injection of additional COEs in tandem with the implementation of distance-based charging,” he said. 

LTA had explained during its announcement of the COE injections that travel patterns have evolved after COVID-19, with the total vehicle mileage decreasing by around 6 per cent from 2019 to 2023, along with lower traffic demand in the CBD. 

On top of that, with ERP 2.0, Mr Chee said that LTA can better manage traffic congestion, through “virtual gantries”, for example. 

“This allows for more flexible and responsive congestion management,” he said. 

Mr Chee also noted that COE quota for categories A, B and C will continue to increase every quarter before reaching the projected peak supply in 2026. 

“The additional COEs will give us more flexibility to meet this commitment, and further increase the COE supply in the next few quarters before we reach the peak supply from 2026,” he said. 

Responding to a question by MP Melvin Yong (PAP-Radin Mas) on whether the planned injection would help to stabilise COE prices, Mr Chee said that the authorities have increased COE supply since last year with the "cut-and-fill" move and additional injection of up to 20,000. 

“All else being equal, an increase in COE supply should help to moderate prices,” said Mr Chee. 

“However, we are not able to predict how prices will move as that would also depend on the demand from motorists.” 

DO EV SUBSIDIES IMPACT COE PRICES? 

Mr Chee also addressed the impact of electric vehicle (EV) subsidies on COE prices. 

Singapore currently provides up to S$40,000 in tax rebates for electric cars, and the amount is deducted off the additional registration fee when registering a new electric car.

Mr Chee said that the subsidies are intended to reduce the difference in the total cost of ownership between a mass-market electric car and its internal combustion engine (ICE) and hybrid equivalents.

He added that when someone decides to buy a car, the EV subsidies serve to nudge him or her towards considering an electric car, instead of an ICE car.

“EV subsidies on their own do not induce new demand for cars,” he said. 

CAN CAR-LITE VISION COEXIST WITH MORE COES?

Having a car-lite vision does not mean that Singapore’s total car population cannot increase, said Mr Chee. 

“The key is to avoid road congestion through the use of both ownership controls and usage-based pricing, which is what we have been doing over the last few decades,” he said. 

He added that an increase in the vehicle population does not automatically lead to an increase in the total vehicular usage. 

“There are car owners who may choose to take public transport to work, as well as those who use their cars mostly on weekends or during off-peak hours,” he said. 

“This is why it is useful to have both ownership controls and usage-based pricing, so that we can enable some families to own cars while keeping congestion in check, especially during peak periods.”