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31 Jan 2019


Adoption of Euro 5 Emission Standards May Incur Extra Expenses for New Car (Current Issue No.2961)

        Amid attempts to promote carmakers to adopt the Euro 5 emission standards for domestically-produced cars in 2021, aimed at addressing the PM2.5 dust particle problem over the long term, we at KResearch have assessed that the costs involved will force consumers to set aside extra expenses of at least THB5 billion for new car purchases during a one-year period of using those standards.

     To induce car manufacturers to adopt the Euro 5 emission standards, the government may consider a number of measures, namely excise tax restructuring to support the manufacturing of cars meeting the Euro 5 emission standards and higher because this measure will help promote changes on both carmakers and car buyers. The government may also support the production of electric commercial vehicles to tackle air pollution over the long term.

        For vehicles with emission standards below the Euro 5, the government may offer incentives for the upgrade of car engines perhaps in the form of partial subsidy over a certain period of time. The government might also raise taxes on car models with emission standards below the Euro 5 when renewing the vehicle registration, tighten measures on car inspection and strengthen law enforcement by fining vehicles emitting black smoke.

         To further reduce pollution from combustion-engine exhaust gases, consumers are advised to use Euro 5 diesel fuel. However, since its price will likely be higher than the conventional diesel fuel by THB0.50-0.60/liter once fully developed, the government may consider subsidizing Euro 5 diesel fuel to promote its use.