Hong Kong must act fast to catch up with Shanghai, Shenzhen, Singapore in flying green

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Hong Kong has to act fast if it wants to become a green fuel hub for the aviation and maritime sectors, as both Singapore and China are way ahead, analysts say

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Eric Ng

Published: 10:00am, 7 Dec 2024Updated: 10:20am, 7 Dec 2024

Hong Kong’s standing as an aviation and maritime hub was dealt a severe blow by the Covid-19 pandemic, China’s economic downturn and intensifying competition. Now, it faces another challenge: green fuel.

The city trails regional rival Singapore on policies and supply chain development for sustainable aviation fuel (SAF), the most feasible decarbonisation solution for the sector. It also lags the city state, Shanghai and Shenzhen, on green fuel marine refuelling services, known as bunkering.

The government and industry have to take swift action or lose business – and the jobs that go with it – to rivals, according to industry experts. The maritime and port industry added HK$115 billion (US$14.8 billion) of economic value and employed some 75,000 people in 2022, while flagship carrier Cathay Pacific Airways employs more than 22,000 people in the city.

“As the global aviation sector has clear decarbonisation goals, as do many investors and finance providers, Hong Kong’s industry must act to enable SAF usage to mitigate climate transition risks, or risk losing competitiveness,” said Merlin Lao, head of policy and research at the Business Environment Council (BEC), a non-governmental organisation.

The airline industry is under pressure to slash emissions through the use of newer fuel-efficient aircraft, streamlining operations and using SAF. Photo: May Tse

From January 1, most ships sailing to the European Union have to prove that they have taken measures to reduce the greenhouse gas intensity of fuels by 2 per cent. This will rise to 80 per cent by 2050.

“Increasingly, clean fuel will be a must for vessels sailing between East Asia and Europe,” said Hing Chao, chairman of the Hong Kong Chamber of Shipping and executive chairman of Wah Kwong Maritime Transport.