Green Technology & Environmental Services Industry in Hong Kong

Overview

• Hong Kong’s environmental industry focuses on six business areas, including (1) water conservation and pollution control, (2) air and oadour pollution control, (3) energy conservation, (4) waste treatment, disposal and recycling, (5) noise control and mitigation, and (6) environmental consulting services.

• The value added of Hong Kong’s environmental industry grew by 5.8% year on year to HK$9.9 billion in 2018 (or 0.4% of GDP). Employment by the industry reached 44,130 in the same year, accounting for 1.1% of Hong Kong's total.

• Leveraging Hong Kong’s unique strengths in the global technology revolution, green technology is one of the Hong Kong Science Park’s five core technology clusters.

• Phase 3 of the Hong Kong Science Park was completed in April 2016. Meanwhile, O·PARK1, Phase 1 of the organic resources recovery centre, locating at Siu Ho Wan in North Lantau commenced operation in July 2018.

• The government provides funding supports to environmental technology-related R&D projects under the Innovation and Technology Fund (ITF), which has approved 179 projects since its establishment, with total funding exceeding HK$375 million.

• Hong Kong and mainland China have further strengthened cooperation in the environmental industry, after the Agreement on Economic and Technical Cooperation was signed on 28 June 2017.

The environmental industry is widely recognised as a new growth sector. According to the latest available figures, the value added of Hong Kong’s environmental industry grew by 5.8% year on year to HK$9.9 billion in 2018 (or 0.4% of GDP). Employment by the industry reached 44,130, accounting for 1.1% of Hong Kong's total.

The environmental industry in Hong Kong consists of mainly small and medium-sized enterprises, which largely focus on six business areas, including (1) water conservation and pollution control, (2) air and odour pollution control, (3) energy conservation, (4) waste treatment, disposal and recycling, (5) noise control and mitigation, and (6) environmental consulting services. Some companies are also engaged in import/export and wholesale trading of waste and scrap.

In 2020-2021 Budget, the government announced the extension of the Cleaner Production Partnership Programme to March 2025, with funding of HK$300 million to encourage factories to improve regional environmental quality. HK$300 million will be earmarked for the launch of a waste-paper recycling scheme. To promote electric transportation, the government has allocated HK$2 billion to subsidise the installation of electric vehicle charging-enabling infrastructure for car parks in private residential buildings, HK$350 million to a pilot programme for electric ferries and HK$80 million to a pilot programme for electric public light buses.

Mainland China is one of the fast-growing and important environmental technology and related services markets for Hong Kong companies. According to the World Energy Investment Report 2020 by the International Energy Agency (IEA), mainland China is the largest destination for energy investment in the world. In the latest National Five-Year (2016 – 2020) Eco-Environmental Protection Plan, the Chinese government identifies some major tasks in ecological environment protection, including strengthening source control, and executing the air, water and soil pollution prevention and control action plan, which is expected to further boost the development of the environmental industry in mainland China, creating opportunities for Hong Kong companies.

Producer Responsibility Scheme on WEEE and WEEE·PARK

Hong Kong households and business establishments generate about 70,000 tonnes of waste electrical and electronic equipment (WEEE) every year. To promote recycling and proper disposal of WEEE generated in Hong Kong, the government launched the Producer Responsibility Scheme on Waste Electrical and Electronic Equipment (WPRS) on 1 August 2018. This covers air-conditioners, refrigerators, washing machines, televisions, computers, printers, scanners and monitors (collectively referred to as regulated electrical equipment, or REE) . Under the WPRS, sellers of REE must provide for consumer a free removal service for disposal of the waste equipment.

Located on a three-hectare site in EcoPark, Tuen Mun, WEEE·PARK provides an essential infrastructure in support of WPRS, starting on March 2018. As one of the leading facilities of its kind in the world, WEEE·PARK adopts advanced technologies to turn regulated WEEE into valuable secondary raw materials. WEEE·PARK also has a refurbishment workshop to divert serviceable electrical appliances received for repair into refurbished items. In 2019, 23,980 tonnes of WEEE were treated in WEEE·PARK.

The EcoPark, located in Tuen Mun, is one of the waste management facilities set up by the government. It has a site area of 20 hectares providing long term land at affordable costs for the recycling industry since 2007. A number of enterprises engaging in recycling of waste cooking oil, waste computer equipment, waste metals, waste plastics, waste wood, waste batteries, etc. have a presence in the EcoPark.

Development of Green Technology

Leveraging Hong Kong’s unique strengths in the global technology revolution, green technology is one of the Hong Kong Science Park’s five core technology clusters. The Science Park provides a full range of facilities and equipment to support the development of green technology in areas of building energy efficiency, environmental solutions, alternative energy, waste disposal and recycling, electric vehicles, and green electronics for infrastructure projects and carbon audits.

Phase 3 of the Science Park completed construction in April 2016. This project was one of the government’s initiatives to boost the development of green technology in Hong Kong and to attract high‑tech investment by private companies. It can accommodate about 150 green technology companies and create 4,000 green technology research and development positions.

Examples of successful green technology enterprises in Hong Kong include Dunwell Enviro-Tech (Holdings) Ltd at Yuen Long Industrial Estate. Dunwell provides used oil and waste water treatment, recycling, reuse services and turns waste lubricating oil into cost-effective finished oil using its patented vibrating membrane advanced treatment (VMAT) technology.

The ASB Biodiesel plant, a foreign investment project, established in Tseung Kwan O Industrial Estate adopts Austrian technology to process waste oil, such as waste cooking oil and grease trap oil, with the capacity to produce 100,000 tonnes of low-carbon transport fuel per year.

Located at Siu Ho Wan in North Lantau, O·PARK1 commenced operation in July 2018. Using biological treatment technologies, this facility converted 33,704 tonnes of organic waste into biogas, compost and other useful resources in 2019. O·PARK2 and O·PARK3 located at Sha Ling of North District and Shek Kong of Yuen Long respectively, are designed to convert 300 tonnes of organic waste per day. The contract for the O·PARK2 was awarded in 2019 and it is expected to begin operation in 2022.

The Food Waste/Sewage Sludge Anaerobic Co-Digestion Pilot Plant located in Tai Po Sewage Treatment Works was commissioned in 2019. Using anaerobic co-digestion technology, the facility is expected to convert 50 tonnes of organic waste into biogas per day for generating electricity to supplement sewage treatment facilities.

The government also provides funding support to environmental technology-related R&D projects under the ITF managed by the Innovation and Technology Commission. As of May 2020, the ITF has approved over 179 environmental technology-related projects, with the total funding exceeding HK$375 million.

Hong Kong-Guangdong Cross-boundary Cooperation

In April 2008, the government launched a Cleaner Production Partnership Programme to encourage Hong Kong-invested enterprises in Guangdong to actively participate in improving the quality of the environment in the region. In light of the environmental benefits and positive feedback from industry, the Programme has been extended until 31 March 2025 according to 2020-2021 Budget. Under the Programme, assistance is given to Hong Kong factories in the PRD to use cleaner production technologies and operation mode so that concerted efforts are made to create a cleaner environment. Efforts include:

• Increase energy efficiency
• Reduce air pollutants emission
• Lower production cost
• Reduce sewage discharge

Through cleaner production, Hong Kong-invested manufacturers can meet national and Guangdong province’s environmental protection standards, enhance their environmental performance, lower cost, increase competitiveness and improve their corporate image. This programme targets eight industries, namely chemical products, food and beverage, furniture, metal and metal products, non-metallic mineral products, paper making and paper products, printing and publishing, and textiles. Currently, more than 180 environmental technology service providers have registered with this programme, including service companies in Hong Kong and the PRD.

In April 2010, Hong Kong and Guangdong signed the Framework Agreement on Hong Kong/Guangdong Co-operation, and agreed to, among other things, cooperate on environmental protection such as:

• Reducing pollutants: jointly exploring the reduction targets and options for total air pollutants emission in the PRD region in 2011-2020.
• Cleaner production: help implement the Cleaner Production Partnership Programme to support Hong Kong-invested enterprises in Guangdong to conduct assessment, develop demonstration projects, provide certification services, etc. in order to improve energy efficiency and to reduce air pollution.
• Electric cars: introducing electric cars to major greater PRD cities such as Hong Kong, Guangzhou and Shenzhen, and jointly fostering research and development, manufacturing, general application and development of the relevant auto-parts industry for electric cars in the greater PRD region.

In June 2012, the Government jointly published the Regional Co-operation Plan on Building a Quality Living Area with Guangdong and Macao. The Plan covers long-term co-operation initiatives in five major areas, namely (1) environment and ecology, (2) low-carbon development, (3) culture and social living, (4) spatial planning and (5) green transportation systems, which aim to build a green and quality living area in the greater PRD region.

At the 21st Plenary of the Hong Kong/Guangdong Co-operation Joint Conference held in May 2019, Hong Kong and Guangdong agreed to continue to take forward air pollutant emission reduction work by launching a study on post-2020 air pollutant emission reduction targets and concentration levels.

At the 1^st meeting of the Hong Kong-Guangdong Joint Working Group on Environmental Protection and Combating Climate Change held in December 2019, Hong Kong and Guangdong agreed to launch a study on Photochemical Ozone Pollution in Greater Bay Area and Characterisation of Regional and Super-Regional Transportation of Ozone (2020-2023) aimed at reducing ozone pollutants and continuously enhancing the living environment in the region.

CEPA Provisions

Since the implementation of the second supplement to the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA) in January 2006, all products of Hong Kong origin, including those related to environmental protection, can be imported into the mainland at zero tariffs. Detailed information, as well as the origin rules for Hong Kong products, is available here.

Hong Kong service providers can set up wholly-owned enterprises on the mainland under CEPA to provide architectural design and engineering services etc., including those in relation to environmental system engineering services. When Hong Kong service providers set up construction engineering design enterprises in China, their track record in Hong Kong and on the mainland can be used by the authorities as the basis for assessing their application for enterprise qualification on the mainland.

Other arrangements between Hong Kong and mainland China relating to the environmental industry under CEPA are as follows:

Details of CEPA can be found here.