Hong Kong's Pathway to Carbon Neutrality

In early October 2021, before the Glasgow Climate Summit, the Hong Kong Special Administrative Region (HKSAR) Government published its Climate Action Plan 2050. The government has pledged to achieve carbon neutrality before 2050, including an interim target of reducing Hong Kong’s carbon emissions by 50 percent before 2035 compared to 2005 levels. The Climate Action Plan lays out deep cuts in fossil fuels in Hong Kong’s power sector -- the source of two-thirds of the city’s greenhouse gas emissions.

At this April 6th CEF meeting, Hong Kong’s Secretary for the Environment, Mr Wong Kam-sing, will give an overview of the core strategies the government is adopting to combat climate change. Over the next 15 to 20 years, the HKSAR Government will invest over US$30 billion (some HK$240 billion) into climate mitigation and adaptation initiatives, including the acceleration of net-zero electricity generation, energy efficiency, green buildings and electric vehicles (EVs), as well as waste reduction.

Following the Secretary’s comments, he and two Hong Kong-based subject matter experts joined CEF’s Director Jennifer Turner in a conversation to delve deeper into Hong Kong’s decarbonization efforts. Darryl Chan, Executive Director of Hong Kong Monetary Authority, spoke about how the international financial center expands its green finance ecosystem, and Professor Becky Loo, University of Hong Kong, highlighted the opportunities and obstacles for EVs and other green transport approaches in Hong Kong.

Selected Quotes

KS Wong

Hong Kong reached its peak emissions early in 2014. Secretary Wong explained that the government “set a new midterm target that is to reduce Hong Kong’s overall carbon emissions by half before 2025, using 2005 as the base year. And by that time, Hong Kong’s per capita emissions will be about two to three tons per year. And we strive to become carbon neutral before 2050.”

“Hong Kong is mountainous we do not have much land but we try to customize the renewable energy potential.” For example, Hong Kong has created a pilot scheme for floating solar PV panels on water bodies. [Such] floating solar panels on water can provide 20% more renewable energy than rooftop ones.

Hong Kong’s Climate Action Plan has four key strategies for carbon neutrality: net-zero electricity generation, green buildings, green transport and waste reduction. To support these strategies Hong Kong is promoting technology innovations, such as “to change all electricity meters in Hong Kong to become smart meters to make Hong Kong a smart and green city. We’re going to marketize the EV charging infrastructure in public and commercial carparks. And also, on recycling, we’re using Smart Recycling bin for plastic beverage bottles recycling and also on food waste recycling because in Hong Kong, most people are living in compact high-rise buildings.”

To accelerate “We need more charging infrastructure, so we’re working with trade to marketize the public and commercial parking space and even turn some existing patrol stations to become fast charging stations. I think in other places like in the United States you are doing something similar. That is where I think we need to work with academic and with trade so that we can make the infrastructure ready.” 

Darryl Chan

“One of the major sources of funding for these green projects [in the government’s Climate Action Plan] will be the issuance of green bonds. The Hong Kong government is one of the global pioneers in having a very structured and multiyear green bond program which is pretty credible. It has a ceiling of up to 25 billion U.S. dollars.” 

“We (the Hong Kong Monetary Authority)… ask banks to properly manage climate risks. So, they look at their loan book and then they do the assessment, and then on our part, we help them do the stress test. And then, we ask them to imagine, what if certain scenarios come up and then how bad the climate risks will hit them? And then we ask them to set up their own strategy, put in place proper governance within the banks, and then commit themselves to make a public disclosure of how they manage the climate risk. So, all of these things we do through our supervisory work.”

The Hong Kong government is committed that by 2025 all of the financial institutions in Hong Kong will have to be compliant with the carbon disclosure requirements set by the Financial Stability Board, which coordinates financial rules for the G20 companies. “We are the first in Asia to do this.”

Becky P.Y. Loo

[One of the challenges in decarbonizing the transport sector comes from the fact that it] “is much more decentralized with decisions of vehicle ownership and usage, resting with a much larger number of individuals and small and medium business enterprises. And they are primarily driven by market forces and individual preferences. This is particularly the case for road transfers, building railway, shipping and aviation sectors, and less decentralized and challenging from this perspective.” 

The EV infrastructure support, including hydrogen, refueling and charging facilities and battery swaps, is inadequate now. And the spatial distribution is not optimal. Promoting EVs in Hong Kong and in many cities [getting enough infrastructure to support EVs] is like this classic problem…you want to get a 400 kilo ox across a bridge that can only take 200 kilos of weight.

The biggest challenge lies with the fossil-fuel emissions from vehicles on Hong Kong’s roads [where] 95% of our vehicles, motorcycles, private cars, lights goods vehicles and medium goods vehicles are still fossil-fuel based. So, they are being continuously sold in Hong Kong, up to 2035 and a car can easily be driven for ten years. So, I know that we have pilot plans for hydrogen electric buses and heavy vehicle buses, but upscaling will be a major issue. So, to round up, I think it’s really important that we also have a comprehensive policy to reduce the mileage driven by fossil fuels and vehicles.”

This meeting was co-hosted by the Hong Kong Economic and Trade Office and ECSP.