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Financial Secretary


Towards carbon neutrality

In the face of the challenges posed by global climate change, I mentioned in the Budget last year that the Government would formulate the long-term decarbonisation strategy as soon as possible. The Chief Executive also announced in the 2020 Policy Address that Hong Kong would strive to achieve carbon neutrality before 2050. The Government will promulgate in the middle of this year our long-term strategy to realise this goal.

Resources have been allocated in the past few budgets for environmental protection and urban development enhancement, with a view to improving our urban environment and air quality, and making Hong Kong a more liveable city. At the same time, we have been adopting a multi-dimensional approach, such as through initiatives relating to green finance and other policy areas, to promote the development of the green industry and create jobs.

For instance, in the Budget last year, I allocated an additional funding of over $10 billion to implement various environmental projects, including promoting popularisation of electric vehicles (EVs), phasing out Euro IV diesel commercial vehicles (DCVs), launching the pilot scheme for electric ferries, setting up the Green Tech Fund, extending the Cleaner Production Partnership Programme, and recycling waste paper. Progress has been made in all these projects.

Electric vehicles (EVs)

Promoting the decarbonisation of our vehicles and ferries is important for improving the air quality. To promote the popularisation of EVs, I announced last year that a $2 billion pilot scheme would be launched to subsidise the installation of charging-enabling infrastructure in eligible car parks of existing private residential buildings. Since its launching in December last year, more than 120 housing estates have submitted their applications, which involve a total of 36 000 parking spaces, i.e. about 10% of relevant parking spaces across the territory.

For promoting the testing of electric public light buses (e-PLBs), in last year’s Budget, $80 million was set aside for launching a pilot scheme for e-PLBs. The Environmental Protection Department (EPD) has already issued the related specification requirements and guidance. Relevant departments are making early-stage preparation. It is expected that about 40 e-PLBs will be subsidised under the scheme for trial in different districts.

Apart from promoting the use of EVs, it is also important to gradually phase out existing high-emission DCVs, including goods vehicles, non-franchised buses and light buses. $7.1 billion was earmarked in last year’s Budget for providing subsidies to the affected car owners. The EPD rolled out the scheme in last October with the aim of gradually phasing out some 40 000 Euro IV DCVs.

Electric Ferries

To pursue the pilot scheme for electric ferries in the Victoria Harbour, we have established an Inter-departmental Working Group and engaged a consultant to devise the design proposals. It is expected that an open tendering exercise for the construction of electric ferries will be conducted this year. In the Budget last year, $350 million was earmarked for providing full subsidies to the ferry operators of four in-harbour routes for the construction of four brand new electric ferries and charging facilities, as well as the relevant operational expenditure during the 24-month pilot period.

In fact, the EPD has also provided subsidies under the Pilot Green Transport Fund to convert two ferries in the fleet of The “Star” Ferry Company into “green ferries powered by diesel-electric propulsion systems (DEPS)” on a pilot basis. “Morning Star”, the first green ferry powered by DEPS has been launched in September last year after undergoing six months of retrofitting, plying between Tsim Sha Tsui and Wan Chai/Central.

Green Tech Fund

To achieve carbon neutrality, not only do we need to take a multi-pronged approach, we also need to ride on innovation and technologies. In this regard, $200 million was earmarked in my Budget last year for setting up the Green Tech Fund to further promote deep decarbonisation, research and development, and the application of green technologies, as well as to create green jobs. The Fund was open for applications in mid-December last year. Projects under the themes of green technologies, including decarbonisation and energy saving, waste management, green transport, air quality and water quality, will be accorded priority.

Cleaner Production Partnership Programme

The Government has been encouraging Hong Kong-funded factories to adopt cleaner production technologies through the Cleaner Production Partnership Programme, so as to conserve energy and reduce emissions, thereby improving regional environmental quality in the Greater Bay Area. The Programme, which has been implemented for about 10 years and provided funding to around 2 300 Hong Kong-funded factories, has reduced the discharge of more than 38 000 tonnes of air pollutants and 19 million tonnes of waste water in the region each year, while more than 18 000 terajoules of energy and over $2 billion of manufacturing cost have been saved. Last year, I allocated an additional $300 million to extend the Programme for another five years to March 2025. It is estimated that over 1 000 new projects will be funded. The Programme started inviting new applications in June last year, and more than 100 projects have already been approved so far.

Waste Paper Recycling

Last year’s Budget committed that a sum of not less than $300 million each year would be side aside for implementing a scheme to recycle waste paper, with a view to promoting waster paper recycling and supporting a circular economy, which can in turn stabilise the quantity and price of local waste paper recycling. In September last year, the EPD conducted an open tendering exercise to engage 17 contractors under service contracts to provide waste paper collection and recycling services across the territory. For frontline collectors, the price of waste paper recycling has been stabilised, rebounding from about $0.3 per kg at the lowest level to about $1 per kg.

In recent years, the repeated occurrences of extreme weather in different places around the world have clearly showed the serious impact brought by the global climate change, which not only threatened the livelihoods and safety of people, but also affected the operation of enterprises. Governments of different countries and regions have already been aware of the seriousness of the problem and hence set out the goal of carbon neutrality. Hong Kong would strive to achieve carbon neutrality before 2050. The SAR Government is considering the recommendations in the “Report on Public Engagement on Long-term Decarbonisation Strategy” submitted by the Council for Sustainable Development. We will announce our long term strategy by the middle of this year.

To cope with the climate change, it is essential for the community to have a deeper understanding on the environment and the climate, and to make adjustments to the style of living as well as social and economic activities, so as to promote sustainable living and economic development through structural reform. This will not only affect individual products and services, but also the industry chain and the structure of industry clusters, which will in turn create new business and job opportunities. We have to grasp the development potential brought by this Green Wave.

February 7, 2021

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