A container barge sails in the Victoria Harbour in Hong Kong, south China, on April 30, 2023. (PHOTO / XINHUA)

Hong Kong’s 2024-25 Budget — having outlined  a range of initiatives that involve major players in the pursuit of low-carbon growth — marks a significant step toward the city’s 2050 carbon neutrality target, but related measures can be made stronger for effective implementation, a prominent expert has said.

On Thursday, Kenny Shui, vice-president of Our Hong Kong Foundation, commented on Hong Kong’s path towards a green future sketched out in the Budget, highlighting key sectors such as finance, technology, and shipping.

Having been supported by the program since it was launched in May 2021, more than 340 green and sustainable debt instruments have been issued in Hong Kong, with a total value of $100 billion

“The focus on these areas underscores the government’s commitment to environmental sustainability and positions Hong Kong as a leader in green innovation and finance in Asia,” Shui, who is also the co-head of research at the local think tank, told China Daily.

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As the international financial center is eyeing huge business opportunities and financing needs arising from global green transformation, the SAR government proposed extending the Green and Sustainable Finance Grant Scheme, which is due to expire in mid-2024, to 2027, and expanding the scope of subsidies to cover transition bonds and loans.

Having been supported by the program since it was launched in May 2021, more than 340 green and sustainable debt instruments have been issued in Hong Kong, with a total value of $100 billion. “This has enriched the green and sustainable ecosystem of Hong Kong,” Financial Secretary Paul Chan Mo-po said when delivering the Budget speech on Wednesday.

The extension is expected to incentivize industries to leverage Hong Kong’s transition financing platform as they strive towards decarbonization, Chan added.

But, the program can be further improved, although it is robust when compared to similar ones launched by other financial hubs, Shui noted. 

“The government might consider establishing a more inclusive framework that allows for the participation of a broader array of external reviewers, fostering greater diversity and competition in the market”, as the current approach of maintaining a list of recognized external reviewers can create barriers to the entry of emerging reviewers with innovation and competitive pricing.  

In another move to advance green finance, the government will continue its efforts in the formulation of sustainability disclosure standards. “Sustainable disclosure is vital as it is similar to traditional financial disclosures but focuses on how climate risks and opportunities might affect a company’s performance,” Shui said. 

But regulators have not provided enough training for listed companies, especially small ones, for the upcoming climate-related disclosures in early 2025, he pointed out.

He also highlighted the “green” cooperation opportunities that can be pursued with other cities of the Guangdong-Hong Kong-Macao Greater Bay Area. The Chinese mainland cities in the 11-city cluster, with advanced manufacturing capabilities and vast market potential, complement Hong Kong’s strong foundation in basic research.

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“Collaboration (within the area) can facilitate the transition of research outcomes from laboratories to market applications,” said Shui. 

Apart from the focus on green finance and green technology, the Budget also introduced green development initiatives in carbon-intensive sectors, including a planned feasibility study on the use of green methanol as a fuel in the shipping industry.

Shui called on the government to “develop regulations and standards for the safe use and transportation of alternative fuels like green methanol”, ensuring both safety and environment protection.

Contact the writer at irisli@chinadailyhk.com