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Published: 23:02, November 24, 2022 | Updated: 06:58, November 25, 2022
HKEX to enhance HK's new global carbon marketplace
By Oswald Chan
Published:23:02, November 24, 2022 Updated:06:58, November 25, 2022 By Oswald Chan

Electronic boards display various stock prices at Exchange Square in Hong Kong on March 9, 2020. (ISAAC LAWRENCE / AFP)

Hong Kong Exchanges and Clearing (HKEX) celebrated the first four weeks of trading on Core Climate — Hong Kong’s new international carbon marketplace — in a gong-strike ceremony on Thursday as it plans to further enhance the trading platform.

Since it was launched on Oct 28, the carbon credit trading platform has recorded more than 40 trades through Nov 24, completed by 20 corporate entities, representing a total volume of around 400,000 metric tons of carbon credits, according to HKEX data.

Since the carbon credit trading platform launched on Oct 28, it has recorded more than 40 trades through Nov 24, completed by 20 corporate entities, representing a total volume of around 400,000 metric tons of carbon credits, according to HKEX data

More than 30 internationally certified projects are now available on the platform, and carbon credit trading and settlements are denominated in both Hong Kong dollars and renminbi, driving accessibility and ensuring flexibility for participants.

The ceremony on Thursday brought together more than 100 participants, including Hong Kong Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, HKEX Chairman Laura Cha Shih May-lung, HKEX CEO Nicolas Aguzin, delegates of corporate participants completing the first batch of trades on Core Climate, and inaugural members of the Hong Kong International Carbon Market Council.

“Carbon market opportunities, after all, are fast-emerging internationally, as countries and regions inevitably commit to a green, low-emission and climate-resilient economy,” Hui said. “In 2021, global carbon credit turnover in voluntary markets hit $2 billion, with compliance markets soaring to $851 billion in the same year.”

ALSO READ: HKEX enlists HSBC, Tencent to help create carbon market

Hui said HKEX will have a dedicated team supervising matters related to Core Climate such as legal and regulatory analysis, product development, client engagement, customer services, technical support, and many other issues.

“With its proximity to the mainland, the world’s largest carbon market, Hong Kong has both a unique role to play in the mainland’s carbon action plan and as a sustainable finance hub for the region,” Cha said.

Aguzin added: “The launch of Core Climate is a significant milestone in our journey to develop Hong Kong into Asia’s premier carbon trading hub.”

Carbon credits on the Core Climate come from more than 30 internationally certified projects, ranging from forestry, solar, wind, hydropower and biomass initiatives in Asia, South America and West Africa. All projects available on the platform, including carbon avoidance, reduction and removal projects, are verified against the Verified Carbon Standard by Verra.

ALSO READ: HKEX to consolidate HK's position as financing center

Yuan Shu, deputy chief executive of Bank of China (Hong Kong), said the launch of Core Climate helps consolidate Hong Kong as a leading international carbon trading center.

“As the platform uses renminbi and Hong Kong dollars for pricing and settlement, it also helps the development of renminbi in the offshore market,” Yuan added.

Bank of China (Hong Kong) is among the first batch of market participants of Core Climate, and has successfully completed multiple transactions in the first batch of transactions whereas transactions are priced and settled in renminbi and Hong Kong dollars.

Looking ahead, HKEX will continue to work closely with the Hong Kong International Carbon Market Council and all key stakeholders across the industry value chain to further enhance Core Climate, supporting the growth, vibrancy and maturity of the carbon ecosystem in the region.

READ MORE: HKEX keeps serving as bridge linking mainland, global markets

In July, HKEX formed the Hong Kong International Carbon Market Council, comprising leading corporates and financial institutions to focus on supporting the development of an international carbon marketplace.

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