2021 has been a decisive year for Germany and Hong Kong; not only in the ongoing fight against the pandemic, but also with regards to concerted efforts by governments and industries towards a carbon-neutral global economy. The new German government under Chancellor Olaf Scholz has made sustainability a core theme of its coalition treaty, which was presented in late November. Meanwhile, the Hong Kong Government published its Climate Action Plan 2050 in October, setting out ambitious carbon reduction targets for the SAR in the decades ahead. With the increasing focus on climate protection and sustainable development policies also come new market opportunities for green solution providers in 2022 and far beyond.
Germany’s new cabinet is looking to shape the transition to a social-ecological market economy and set the course for a climate-neutral future, an endeavour that is exemplified, for one, by the newly renamed Federal Ministry for Economic Affairs and Climate Action (BMWK). In mid-December, the German government announced the investment of €60 billion of unused credit lines from the 2021 federal budget into the Energy and Climate Fund (EKF) as an additional commitment to future spending on decarbonisation.
Aside from contributing towards national and EU targets on climate protection, the government has also outlined various measures to secure a sustainable and competitive economy in the long term, from developing the country’s innovation capabilities to further strengthening foreign trade promotion, including the network of German Chambers of Commerce Abroad (AHK).
Established BMWK programmes like the German Energy Solutions Initiative, organised in co-operation with the AHK offices around the world, will continue to play an important role in helping SMEs in the sustainable energy sector bring their innovative solutions into foreign markets. For instance, GIC will be inviting companies from Germany on a virtual delegation trip on the topic of “energy efficiency in publicly financed building projects in Hong Kong” next March, to connect them with local stakeholders and potential business partners.
The Special Administrative Region provides a lucrative market environment for green technology and service solutions made in Germany. Specialised companies with rich experience and know-how in the areas of carbon-neutral electricity generation, green buildings, green transport, and waste management are highly regarded co-operation partners for local stakeholders, both in the public and private sectors.
Hong Kong’s Sustainability Strategy
The Hong Kong Government has allocated considerable resources to the promotion of sustainability over the past decade, in order to increase energy efficiency and substantially cut waste and carbon emissions. In 2021, the Environment Bureau published the Climate Action Plan 2050, an updated version of the Climate Action Plan 2030+ released in 2017, which had defined a target to reduce carbon intensity by 65-70% compared to the baseline year of 2005.
The updated CAP targets 50% less carbon emissions before 2035 (compared to 2005), as first announced in the Chief Executive’s 2021 Policy Address. This timeframe also coincides with the similarly ambitious albeit less specific Outline Development Plan for the Greater Bay Area from 2019: The regional blueprint calls for a “green, intelligent, energy-saving and low-carbon way of production and lifestyle […]” in the region by 2035. On a national level, China has committed to a carbon emission peak in 2030 and carbon-neutrality before 2060.
Meanwhile, the Waste Blueprint for Hong Kong 2035 published earlier this year sets a medium-term target to reduce per capita disposal of municipal solid waste by 40-45% and enhance domestic recycling capabilities. These are crucial objectives in order to reduce Hong Kong’s over-reliance on landfills, which are reportedly near the saturation point. In August 2021, Hong Kong’s lawmakers took an important step with the long-awaited passage of a bill to introduce a new charging scheme for municipal solid waste disposal. The scheme will take effect after a preparation period of 18 months, in early 2023.
Waste management, energy efficiency in the building sector, as well as sustainable urban transport solutions will remain among the most urgent challenges for the SAR in the years ahead. The successful implementation of the formulated targets will rely heavily on innovative technologies and strategies – German companies have a unique opportunity to engage in Hong Kong’s sustainability transformation.
Shaping a Greener Future
In order to further promote Hong Kong-German synergy and co-operation potentials in the area of sustainability, GCC launched a new event series earlier this year under the headline “Green Solutions from Germany.” In monthly instalments, the series invites member companies across various industries to share insights into their respective sustainability strategies, and how these can be applied to Hong Kong and the region.
Thereby, audiences can gain a deeper understanding of market structures and business opportunities in Hong Kong and Asia for specialised green technology suppliers from Germany as well as local decision-makers. So far, the series has already covered multiple different sectors of the economy, from the chemical industry to consumer goods and retail to ESG and green finance. With Hong Kong striving to position itself as the leading hub for ESG investments in Asia, this topic in particular can be expected to remain high up on the agenda in the foreseeable future. Looking ahead, the next sustainability session already marked in the calendar: In January, the focus will be on how German high-tech engineering can drive the implementation of smart mobility solutions in Hong Kong and contribute towards a greener future for the city.
As both Germany and Hong Kong are moving forward on the path towards climate neutrality, business and environmental co-operation are increasingly being understood as two sides of the same coin. Hence, developing a comprehensive, forward-looking sustainability strategy has become a vital necessity for companies that want to play a decisive role in the coming decades. As a regional headquarters location, where many German and international companies are taking strategic decisions that can have an impact on business and livelihoods not only locally, but across the entire Asia-Pacific region, Hong Kong will surely be at the centre of this critical task.
By Hendrik Hillebrecht
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