Like many jurisdictions around the world, Hong Kong is aiming for net-zero carbon emissions by 2050. In the meantime, a set of interim targets for 2035 was announced by Chief Executive Carrie Lam in her Policy Address last year. 

To share more details about the Government’s latest plans, Daniel Tang, Principal Environmental Protection Officer (Cross-Boundary & International), Environmental Protection Department, spoke to members at a webinar on 13 April.

As Tang explained, Hong Kong does not have significant heavy industry, so electricity generation is the biggest carbon culprit in the city. “Buildings, transport and waste make up over 90% of total emissions,” he said. 

With this in mind, the Government has been working with Hong Kong’s two power suppliers to phase out the use of coal in daily electricity generation by 2035, while increasing the use of natural gas and renewable energy.

“In addition, the Government and power companies are working together on other sources, such as hydrogen,” he added. “So we will be ready to adopt them when the technology becomes relatively mature.”

Besides moving to cleaner electricity generation, a key focus for Hong Kong is cutting energy use in buildings.

“As Hong Kong is a global financial centre, the majority of daily activities take place in skyscrapers,” Tang said. “Air-con and other appliances use a lot of energy, so more than 60% of our carbon emissions are in buildings.”

He added that the Government will need the cooperation of businesses to reach its 2035 target of reducing emissions in commercial buildings by 15% to 20%. 

Fossil fuel vehicles will be phased out in the coming years, so the Government expects the transport sector will reach zero emissions by 2050. In terms of waste, which makes up about 7% of Hong Kong’s carbon emissions, we will need to move faster in cutting the use of disposable plastic and reduce our reliance on landfill. 

 “There will be many challenges and difficulties in the transition to carbon neutral, but it will also bring new opportunities,” Tang said. “The Government will allocate substantial resources to promote energy saving measures, creating opportunities for green investment and plentiful job opportunities.”

The Government has committed HK$240 billion over the next 15 to 20 years to combat climate change, Tang said. 

In the panel discussion that followed, three industry experts discussed the latest targets with Tang – in particular, what they mean for businesses.  

Mark Watson, Head of Sustainable Development at John Swire and Sons, asked what expectations the Government had of businesses in Hong Kong, and if more rules were likely to be introduced. Tang replied that many companies were already taking positive steps and allocating resources to their own green initiatives. 

“At present, the Government is taking the attitude of encouraging these developments, rather than more stringent enforcement,” he said. “So we will pay attention to how this proceeds. We are optimistic that the private sector as a whole is working to achieve the carbon neutral target.” 

Mike Kilburn, Independent Sustainability Adviser, wondered why a rating system for buildings had not been introduced in Hong Kong. 

“Ratings systems have driven change in other places around the world, as they create incentives for buildings to become more efficient,” he explained. “For example, if a building is upgraded from a ‘C’ rating to ‘B’ or even ‘A’, this will help it attract more tenants and clients.” 

Turning to the financial sector, Chaoni Huang, Managing Director and Head of Sustainable Capital Markets, BNP Paribas, said that banks and capital markets were keen to find energy efficient projects. However, she noted that green projects in many different areas, from risk assessment to supply chain, were still fairly small scale.

“We will need to redirect more capital towards the sustainable business model,” she said. 

Huang added that while banks in Hong Kong lend to SMEs, this is not specifically targeted at sustainability.

“The Government has provided support for SMEs during Covid, which could be a model for green financing for small businesses in the future,” she said.

Watson from Swire added that taking action ahead of regulations can put businesses in a good position.  

“Having ESG and strong sustainability policies in place is good for business,” he said. “It has affected how we are rated and ranked, and access to green finance and capital.”

In summing up the webinar, Tang said that while the Government’s 2050 targets were challenging, he was pleased to see the support of the private sector. 

“Many businesses have already taken on board the goal to achieve carbon neutrality,” he said. “It will need the determination and drive of every member of society to adopt a low carbon lifestyle.”