Up to 20,000 additional COEs to be injected across all vehicle categories from February 2025: LTA

SINGAPORE: Up to 20,000 additional certificates of entitlement (COEs) will be progressively injected across all vehicle categories from February 2025 over “the next few years”, said the Land Transport Authority (LTA) on Tuesday (Oct 29). 
The move, a first in over 20 years, is being made in view of the upcoming implementation of the ERP 2.0 system for traffic congestion management, which includes virtual gantries that can better manage traffic congestion. 
LTA said in a statement on Tuesday that ERP 2.0 will provide “more comprehensive aggregated traffic information and will be able to operate without physical gantries”. 
With the new system, LTA will be able to introduce new “virtual gantries”, which allow for “more flexible and responsive congestion management”, said LTA. 
The new virtual gantries will begin operation only after all Singapore-registered vehicles have the ERP 2.0 system installed. The timeline for vehicle installation is targeted for the end of 2026. 
LTA also added that the new ERP system, when fully installed, provides the possibility of introducing distance-based charging in the future, which will be an additional tool to regulate vehicle usage and manage traffic congestion more responsively.
Responding to media queries, LTA said that it has not made a decision on whether to implement distance-based charging. 
“We will carefully study the implications before assessing whether to do so,” said LTA. “This injection is not related to a decision on distance-based charging.”
LTA said that another reason for the progressive injections of COEs is due to changing travel patterns post-pandemic.
Since the COVID-19 pandemic, travel patterns have evolved, said LTA, driven in part by an increase in flexible work arrangements. 
“We have observed a sustained change in travel patterns and reduction in total vehicle mileage for private vehicles over the last five years,” it said. 
For instance, it observed lower traffic demand and congestion in the central business district area after the pandemic. Weekday vehicle speeds are also still within the “optimal speeds”, which is why ERP gantries in the city cordons remain unpriced.
From 2019 to 2023, total vehicle mileage decreased by around 6 per cent, LTA added. 
Public transport accessibility has continued to improve, said LTA, as the rail network has expanded by 18 per cent from 228km in 2019 to around 270km today with the opening of the Thomson-East Coast Line Stages 1 to 4. There will also be further enhancements to the MRT network over the next few years. 
“Given the recent vehicle usage trends and improved capabilities of ERP 2.0, LTA will progressively inject up to about 20,000 additional COEs across the vehicle categories from February 2025, over the next few years,” it said. 
The last time such a move was made was between 1997 and 2003, when an additional 10,500 COEs were introduced, following the introduction of the present ERP system. 
LTA said in response to queries that the 20,000 COEs represents about 2 per cent of the total vehicle population.
“We will distribute the COEs after reviewing relevant data, such as the de-registration data across the various COE categories,” it added. 
The injection is expected to be progressively introduced over the next few years.
As to whether the injection can complement the “cut-and-fill” move to reduce the volatility of COE supply, LTA said that this was not the case. 
“The injection of COE quota is a separate decision,” said LTA. 
The cut-and-fill move is when the COE quota is brought forward from peak years to fill the periods of low COE supply to manage volatility in pricing.
The move to increase COEs will be on top of the existing allowable vehicle growth rate (VGR). 
The VGR is the annual growth rate of the total vehicle population in Singapore, and is reviewed every three years. It is separate from the progressive introduction of the additional COEs, which can be applied at different rates and timings across the next few years. 
LTA announced that the VGR for Categories A, B and D will be kept at 0 per cent per annum, while the VGR for Category C will remain at 0.25 per cent per annum from Feb 1, 2025 until Jan 31, 2028.
Category A covers cars 1,600cc and below with horsepower not exceeding 130bhp. Larger and more powerful cars fall under Category B. Category C is for commercial vehicles and buses, and Category D, motorcycles. 
Except for Category C vehicles, the VGR has been set at 0 per cent since 2018. 
“Our long-term vision remains centred on ‘car-lite’”, said LTA.