COMPRESSED NATURAL GAS VEHICLES

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COMPRESSED NATURAL GAS VEHICLES: 15.

Er Edwin Khew Teck Fook asked the Minister for the Environment and Water Resources what is his Ministry's

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position on compressed natural gas vehicles in Singapore.

The Minister for the Environment and Water Resources (Assoc. Prof. Dr Yaacob Ibrahim): Sir, a key air pollutant of concern in Singapore is fine particulate matter, or PM2.5. Our ambient PM2.5 level for 2007 was 19 μg/m3, which is higher than the standard of 15 μg/m3 set by the US Environmental Protection Agency. This is of concern as PM2.5 has been linked by many studies to respiratory diseases, such as bronchitis and asthma, and to heart disease.

As diesel vehicles contribute about half of the PM2.5 in the air, a key strategy to improve our air quality is to reduce particulate emissions from these vehicles. To this end, my Ministry has introduced the more stringent Euro IV emission standards for new diesel vehicles from 1st October 2006.

To reduce PM2.5 emissions, we have also facilitated the adoption of CNG vehicles as a cleaner alternative to diesel vehicles through the Green Vehicle Rebate, or GVR, scheme since 2001. The scheme aims to narrow the cost differential between green vehicles and conventional ones. Currently, the rebate applies to hybrid and electric vehicles as well. In addition to providing incentives for green vehicles, the National Environment Agency has also supported private sector efforts to develop CNG refuelling infrastructure through providing co-funding for the start-up costs through its Innovation for Environmental Sustainability Fund. The feasibility of more CNG refuelling stations is being looked into now by the industry.

We are heartened by the recent strong market interest. Improving our environmental quality requires the joint efforts of the public, private and people sectors. Government plays an important role in facilitating industry efforts. In turn, industry players would take commercially

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viable decisions that respond to customer demand. We hope to see over time a much larger population of environmentally friendly vehicles on our roads.

Er Edwin Khew Teck Fook (Nominated Member): Thank you, Minister, for clarifying the Ministry's position on CNG vehicles.

I think very clearly CNG and hybrids are desirable for the Singapore environment and, particularly, our carbon footprint, as such. It is a little bit of a concern for me because of some negative reports from the press regarding these rebates that past 2009 they may be taken away. But this whole industry regarding clean-fuel vehicles is suffering. What I hear is that CNG vehicle sales and conversions have also come down, and this affects very much the people who are actually prepared to invest in putting up these refuelling stations. I think it is a chicken-and-egg situation as we know before that without the cars, the people who are in the refuelling business or providing the fuel will not invest –

Mr Speaker: Mr Khew, ask your question, please.

Er Edwin Khew Teck Fook: Can the Minister basically clarify how we can encourage this, as we know it is good for Singapore?

Assoc. Prof. Dr Yaacob Ibrahim: Sir, as rightly pointed out by the Member, the current rebate scheme will end by end-2009. But MOF, together with MOT and MEWR, will review the scheme. We have not arrived at a decision yet, but before end 2009, we will arrive at a decision and make it public.

I agree with the Member that it is in our interest to encourage more environmentally-friendly vehicles but, at some point, we must also allow the market to take its own course. What the

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Government has done – in order to encourage the adoption of environmentally-friendly vehicles – is to provide the rebate for the vehicles and funding for the start-up cost for the refuelling stations. We have two stations at the moment and I understand that a third one is coming up in Serangoon and, hopefully, more industry players will see that by providing the stations and more people will see that it is convenient to have CNG vehicles. I agree with him that it is a chicken-and-egg situation but no matter where it is, we have to start somewhere. With the rebate and the start-up cost, we think that is quite the right level to allow the industry to then take over. I agree with him that we need to be very clear about what happens after end 2009. The matter is being reviewed and we will report in due course.