VES: emission rebates and surcharges
The Vehicular Emissions Scheme adjusts the ARF of every new car according to its emissions. Amounts read on LTA’s pages on 24 October 2026.
ARF to pay, band A, registered in 2026
$25,500
$28,000 if registered in 2027 (+$2,500)
| ARF before rebates | $48,000 |
| VES 2026 | −$22,500 |
| EEAI 2026 (electric) | $0 |
| VES 2027 | −$20,000 |
| EEAI 2027 | $0 |
Prepared by Radif Partners · Method · COE results read on 24 October 2026 (latest: 2nd exercise of October 2026)
Under the Vehicular Emissions Scheme a new car falls into one of five bands, set by the worst of five measurements: carbon dioxide, hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter. For cars registered in 2026, band A earns a rebate of $22,500 off the ARF, band B pays nothing extra, and bands C1, C2 and C3 pay surcharges of $7,500, $22,500 and $35,000. In 2027 the band A rebate falls to $20,000 and the surcharges rise to $15,000, $30,000 and $45,000. A fully electric car registered in 2026 also gets the EEAI, 45% of its ARF up to $7,500, until the scheme ends on 31 December 2026. On an OMV of $40,000, that makes the ARF $18,000 for an electric car registered in 2026 against $28,000 in 2027.
The five bands
| Band | CO2 limit (one of five tests) | Registered in 2026 | Registered in 2027 |
|---|---|---|---|
| A | up to 90 g/km | −$22,500 | −$20,000 |
| B | 91 to 120 g/km | ±$0 | ±$0 |
| C1 | 121 to 159 g/km | +$7,500 | +$15,000 |
| C2 | 160 to 182 g/km | +$22,500 | +$30,000 |
| C3 | above 182 g/km | +$35,000 | +$45,000 |
The CO2 column shows only one of the five tests. A car can meet the CO2 limit of band B and still be placed in C1 because of its nitrogen oxides or particulate matter. That is the most common surprise for buyers who compare cars by fuel economy alone, and it is why the dealer’s stated band is the figure to use.
What it does to the ARF
| Band | ARF, registered in 2026 | ARF, registered in 2027 |
|---|---|---|
| A | $25,500 | $28,000 |
| B | $48,000 | $48,000 |
| C1 | $55,500 | $63,000 |
| C2 | $70,500 | $78,000 |
| C3 | $83,000 | $93,000 |
Between the cleanest and the most polluting band, the ARF on the same OMV differs by $57,500 in 2026 and $65,000 in 2027. The scheme is revised every few years: the 2027 amounts are already published, with a smaller rebate and larger surcharges, so a car in band C registered in January 2027 will cost more than the same car registered in December 2026.
Cost per year with your band
Cost per year over 10 years
$21,071
| OMV | $30,000 |
| Excise duty and GST | $9,240 |
| ARF after VES and EEAI | $34,000 |
| COE, October 2026 (2) | $132,004 |
Registering in December or in January
Because the amounts depend on the year of registration, not on the date of purchase, the turn of the year matters for anyone whose car is delivered around it. On the $40,000 example, a band C1 car costs $7,500 more in ARF if it is registered in January 2027 rather than December 2026. For an electric car in band A the gap is larger, $10,000, because the EEAI disappears at the same moment as the band A rebate shrinks. A temporary COE gives a few months to register; when the delivery date is close to the year end, ask the dealer which year the registration will fall in and whether the quote assumes it.
Comparing two versions of a model
Versions of the same car often sit in different bands: a mild hybrid in band A, the petrol version in B, the sport version in C1. The band difference comes straight off or on top of the ARF, and it adds to the difference in OMV. Run both versions through the calculator above with their own OMV and band before comparing prices.
The EEAI for electric cars
The EV early adoption incentive cuts the ARF of a fully electric car by 45%, with a cap that has fallen year after year: $15,000 for cars registered in 2024 and 2025, and $7,500 in 2026. It ends on 31 December 2026. Together with the band A rebate and the absence of an ARF floor, it makes the ARF of a modest electric car small or nil. From 2027 only the VES rebate will remain, at its lower 2027 level.
Electric cars have other rules of their own: Category A only up to 110 kW, road tax on motor power with an additional flat component, and a CO2 rating from electricity use. The EV road tax page covers the yearly side.
VES and the rebate at the end
The VES works once, at registration. When the car is deregistered before ten years, the PARF rebate is a share of the ARF actually paid after any VES rebate or EEAI, and without any surcharge. A band A car therefore gets back a little less PARF than a band B car, having paid less ARF to begin with, while a band C car never sees its surcharge again. The PARF rebate calculator applies that rule, and the ARF page shows the gross ARF before any of this.