By Chris Tan

Pictured above: HDi Citroens which are examples of private diesel cars that come in all shapes and sizes.

In one deft turn, Singapore has gone from an anti-diesel state to a diesel-loving republic.

Not only will the Special Tax for diesel passenger cars be slashed to 40 cents per cubic centimetre of engine displacement for Euro 5 compliant models (from $1.25 per cc for Euro 4 cars), the Carbon Emissions-based Vehicle Scheme (CEVS) that will replace the decade-old Green Vehicle Rebate (GVR) from Jan 1, 2013 will bestow generous tax rebates on a slew of Euro 5 diesel models.

The automakers most likely to benefit from CEVS are BMW, Mercedes-Benz, the Volkswagen Group and possibly Jaguar.

This could quite possibly trigger a rush for diesel cars here, even if their price tags are usually around 10 per cent heftier than equivalent petrol models. The collective German makes will be the main beneficiary, no doubt.

By following practices in Europe, Singapore has missed an opportunity to create an automotive playing field that takes into account emissions other than carbon dioxide. We are talking specifically about nitrous oxides and hydrocarbons.

The Euro 5 standard allows diesel vehicles to spew more of such hazardous-to-health pollutants than their petrol counterparts. For instance, diesel passenger cars are allowed up to 180mg/km of nitrous oxides, versus 60mg/km for petrol models. Even for Euro 6, there is a 20mg/km allowance for diesels.

That aside, the two changes announced recently are founded on what appears to be a desire to make drivers more aware of the environmental impact caused by their choice of transport. But the changes fall far short of a holistic approach.

One of the biggest impediments to carbon awareness is not applying a tariff on diesel at the pumps the way we do for petrol.

As such, other road users and taxpayers in general are in effect subsidizing commercial vehicle owners/operators, who do not pay any form of diesel tax. Even taxi companies are charged $5,100 per annum per taxi, as a proxy for duty that cabs would have incurred had diesel attracted a pump tariff.

Anecdotal evidence seems to suggest that these commercial users are "over-using" their vehicles because of the subsidised fuel.

According to Land Transport Authority statistics (see table above), the average annual mileages of cars and motorcycles have fallen by 6.4 and 2.5 per cent (to 19,000km and 13,400km) respectively from 2004 to 2011.

But all the other types of vehicles - largely powered by diesel - have seen an increase in kilometres clocked. For instance, public hire buses were up 15.5 per cent to 52,900km and heavy goods vehicles were up 12.6 per cent to 44,100km over the same seven-year period of 2004-2011.

It is clear from the numbers that these vehicles are not only having a greater impact on the environment than passenger cars, they are also contributing significantly more to road congestion on a per-unit basis. And yet, their users are not taxed accordingly.

In fact, most of them pay far less punitive registration taxes too. This really flies in the face of the "user pays" or "polluter pays" principle that our road pricing system is based upon.

The move to exempt these vehicles from fuel duty may have been pro-business, but it is probably at some expense to the well-being of the population at large. While no statistical studies have been conducted here to show a correlation between respiratory ailments (and consequent health care costs) and the usage pattern of diesel vehicles, common sense tells us that there must be a link.

And here's the irony: Even though Singapore legislated Euro 4 standards for diesel commercial vehicles in 2006, the bulk of such vehicles on the road are still old models that merely meet the dated Euro 2 standard, if at all.

Just goes to show that even policies formulated with the best of intentions can bite you on the backside sometimes. Let's just hope the latest won't.

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