Singapore to inject 20,000 COEs across vehicle categories from February 2025

Up to 20,000 additional Certificates of Entitlement (COEs) will be made available across five vehicle categories in Singapore starting in February 2025, the Land Transport Authority (LTA) announced on 29 October.

The expansion, which represents about a 2% increase in the vehicle population, is aimed at responding to shifts in travel patterns.

According to LTA data, the total mileage clocked by vehicles in Singapore declined by approximately 6% from 2019 to 2023, providing an opportunity to modestly increase vehicle numbers without necessarily adding to congestion.

The new electronic road pricing system, ERP 2.0, is expected to play a critical role in this initiative by facilitating more targeted and effective traffic management.

This upgraded system, which replaces traditional gantries with satellite-based on-board units (OBUs) installed in vehicles—and which some motorists have regarded as bulky—is expected to be operational by the end of 2025.

ERP 2.0 will introduce “virtual gantries” for more responsive control over traffic flow and is also set to enable distance-based charging, which remains under consideration as an additional congestion management tool.

The concept of distance-based charging is under careful review, as LTA previously indicated in October last year.

At that time, the agency had not reached a decision on whether to implement the policy, recognising the need for further analysis on its impacts and feasibility.

Former Transport Minister Ong Ye Kung emphasised in 2020 that distance-based pricing would mark a significant shift in policy. Ong noted that such a system would require rigorous study due to its implications for Singapore’s infrastructure and the approximately one million-vehicle population.

Experts have also highlighted that implementing a distance-based pricing framework would necessitate robust data-handling capabilities and a carefully designed policy structure to ensure equity and efficiency.

The increase in COEs, which are essential for vehicle ownership in Singapore, aims to ease the supply of COEs amid sustained high premiums in recent years.

According to the latest tender data from 23 October, COE prices dipped slightly but remained above S$100,000 in the two car categories.

Category A COEs, designated for smaller and less powerful cars, including electric models, closed at S$102,900, while Category B COEs, for larger cars, ended at S$113,890.

LTA has not yet disclosed specific details on how the new COEs will be allocated across vehicle categories or the exact timeframe for this injection.

This current COE expansion mirrors previous initiatives such as the government’s decision to release 10,500 additional COEs between 1997 and 2003 following the original ERP system’s introduction.

Vehicle growth in Singapore, however, has been set to zero since 2018, except for commercial vehicles, which have a permitted growth rate of 0.25% per year.

On 29 October, LTA announced that the zero-growth rate would be maintained for cars and motorcycles, while commercial vehicle growth would continue at 0.25% annually from 1 February 2025 to 31 January 2028.

While vehicle growth remains tightly controlled, Singapore’s transport strategy focuses on a “car-lite” society that encourages walking, cycling, and public transit as primary modes of travel. Singapore’s rail network has expanded by 18% since 2019, increasing from 228 km to around 270 km, with further rail line expansions planned over the next few years.

The anticipated injection of COEs follows Transport Minister Chee Hong Tat’s remarks in March, where he acknowledged the potential benefits of a one-time increase in the vehicle population.

Chee emphasised that any such increase would need to be accompanied by higher usage-based fees to prevent congestion, with distance-based pricing as a possible component of future policy.

To support ERP 2.0’s implementation, around 150,000 OBUs have already been installed in vehicles, according to LTA’s October update.

Notifications for installation appointments will continue from November 2024, but vehicle owners may now book installation appointments directly with authorised workshops, bypassing the need for an LTA-issued notification.

The LTA has additionally modified its booking portal to simplify the process, providing an information page on OBU installation to guide vehicle owners to their preferred workshops.

As Singapore proceeds with ERP 2.0 and a gradual expansion of its COE supply, the LTA has indicated it will assess further COE injections based on the effectiveness of these new congestion management tools and evolving traffic data.

This ongoing analysis will inform additional policies, including further ERP adjustments and potential COE releases, to balance vehicle population growth with the city’s “car-lite” goals.