SINGAPORE: The Singapore government will add S$5 billion to its Future Energy Fund to support clean energy efforts, Prime Minister Lawrence Wong announced in his Budget 2025 speech on Tuesday (Feb 18). Incentives will also be provided to heavy goods vehicle and bus owners to encourage a switch to electric models and cut transport emissions, as reported by The Straits Times.
PM Wong, who is also Finance Minister, said expanding clean energy access is crucial due to rising energy demand and the need to cut carbon emissions. The additional funding will go towards securing cleaner power sources, “be it electricity imports, hydrogen or nuclear”, he said, as reported by The Business Times
Investment in clean power source
By 2035, low-carbon electricity imports could meet about one-third of Singapore’s projected energy demand.
But PM Wong stressed the need for local clean energy sources for greater energy security. One option is nuclear power, which the government will study further.
Singapore has already signed civil nuclear cooperation agreements with the US and is working on similar partnerships with other countries experienced in civilian nuclear power generation.
Heavy Vehicle Zero Emissions scheme and Electric Heavy Vehicle Charger grant
To reduce emissions in the transport sector, the government is providing incentives for businesses to switch to electric heavy vehicles and buses. The adoption of these vehicles has been slow due to high upfront costs, limited model availability, and less accessible charging infrastructure.
The Heavy Vehicle Zero Emissions scheme will provide financial incentives for companies to buy electric heavy vehicles, while the Electric Heavy Vehicle Charger grant will help fund fast-charging infrastructure to run these vehicles.
Road tax adjustments for electric heavy vehicles
To offset the loss of fuel excise duties, which contribute around S$1 billion annually, road taxes for electric heavy vehicles and buses will be introduced in phases.
From January 2026, an Additional Flat Component (AFC) tax will be introduced, with full implementation by January 2028. The rates will be:
- S$250 per year for electric heavy goods vehicles
- S$190 per year for electric mini-buses
- S$550 per year for large electric buses
PM Wong reaffirmed Singapore’s goal to have cleaner energy power all vehicles, including electric and hybrid models, by 2040.
Deven Chhaya, partner in Infrastructure Advisory at KPMG, praised the Heavy Vehicle Zero Emissions scheme and Electric Heavy Vehicle Charger grant, saying they not only reduce emissions but also drive broader change.
He added that prioritising commercial vehicle electrification can speed up improvements in infrastructure and battery technology. This will help lower costs for consumers and make it easier to adopt electric vehicles.
“By focusing on commercial fleets first, Singapore can lead the charge in sustainable transportation while accelerating systemic change that benefits the entire ecosystem,” he said.
PM Wong said the government will continue studying ways to expand the rail network, calling it the backbone of Singapore’s public transport system. Over S$60 billion will be invested this decade to upgrade and extend the rail network.
Support vouchers for energy-efficient appliances for households
As part of its sustainability efforts, the government will also provide S$400 vouchers to all Singaporean families living in private properties to help them buy energy-efficient household appliances, such as air-conditioners, under the Climate Friendly Households Programme.
Mr Chhaya praised Singapore’s commitment to clean energy, stating that “prioritising clean energy signals a forward-looking approach to addressing global energy challenges”.
“Innovation must remain at the heart of these efforts, as the global race to solve critical problem statements in energy will determine the leading players in tomorrow’s market. By staying focused on breakthroughs in clean energy solutions, Singapore is well-positioned to strengthen its competitiveness and establish itself as a leader in the sustainable energy transition,” he added. /TISG
Featured image by Depositphotos