【Press Release】Friends of the Earth (HK) comment on the Strategy of Hydrogen Development in Hong Kong: Seize National Opportunities in Developing Green Hydrogen

(Hong Kong, June 17, 2024) The Environment and Ecology Bureau published the Strategy of Hydrogen Development in Hong Kong today, outlining the direction for manufacturing, distribution, and use of the fuel. As a clean energy source, hydrogen can be used in electricity generation, transportation, construction machineries, and such to reduce greenhouse gas emissions and combat climate change. Friends of the Earth (HK) notes that in the 2020 white paper, "Energy in China's New Era”, China stated it will promote the development of hydrogen technology and industry and increase the share of hydrogen in energy consumption, helping the country to achieve carbon neutrality. The Hong Kong government must seize the opportunity to strengthen cooperation with the Mainland in hydrogen development, leverage the country’s industrial base and policy support, and jointly promote hydrogen innovation.

Friends of the Earth (HK)makes the following suggestions to the government to support the sustainable development of hydrogen in Hong Kong:

1.Develop a long-term hydrogen roadmap: The government should set a forward-looking development plan for green hydrogen and other zero-carbon energy sources, setting clear targets and roadmaps and promoting research and development of relevant technologies.

2. Enable hydrogen research and innovation: The government should support local universities and research institutions in conducting research and development in hydrogen technology, reducing the cost of hydrogen production and application, and enhancing technological competitiveness.

3. Strengthen hydrogen infrastructure: The government should set technical specifications and standards for hydrogen infrastructure, expedite the construction of pipelines and refueling stations, and improve storage and distribution to ensure the quality and safe widespread application of hydrogen energy. The government should coordinate development with the Greater Bay Area and participate in the planning of hydrogen pipelines with Europe and China.

4. Establish relevant policies and regulation: The government should develop comprehensive technical standards and safety regulations for the hydrogen industry, covering production, storage, distribution, refueling station construction and application. Additionally, robust mechanisms should be established to strengthen supervision and management of the industry, with clearly defined departmental responsibilities to ensure the effective coordination.

5. Promote demonstrations and pilots: The government should promote a diverse portfolio of projects, covering transportation, industry, energy storage, and such. It should encourage participation from industry and research institutions to jointly promote hydrogen application and popularisation.

6. Apply hydrogen in electricity generation: The government should promote the use of Combined Cycle Gas Turbine (CCGT) technology to blend hydrogen and natural gas for electricity generation. The two power companies should set a transition timeline to accelerate energy transition goals.

7. Popularise zero-carbon energy use in buildings: The government should amend outdated and innovation-unfriendly building regulations to encourage the use of zero-carbon energy and improve building energy efficiency and environmental performance.

8. Advance hydrogen use in transport: The government should adopt hydrogen in its net-zero transportation strategy. It should formulate relevant standards and incentives to encourage the use of hydrogen fuel cells and facilitate a zero-carbon transition in the transportation sector.

9. Develop timetable for net-zero maritime transport: The government should follow the International Maritime Organization in setting a clear timeline for phasing out traditional engines in the maritime industry and encourage the use of zero-carbon fuels such as hydrogen and methanol.

10.Encourage development of other zero-carbon energy: In addition to green hydrogen, the government should promote development and use of other zero-carbon fuels such as green methanol, green ammonia, and sustainable aviation fuel to support the energy transition.

11.Spur regional collaboration: Shenzhen recently published the "Shenzhen Hydrogen Energy Industry Innovation and Development Action Plan (2024-2025)”, aiming to set the city as a centre for hydrogen innovation and development in the Greater Bay Area. The government should take advantage of this opportunity to strengthen cooperation with the Mainland on hydrogen research, industrial and market development, capacity building, and more, jointly advancing the hydrogen industry.

12.Green finance to promote green hydrogen: The government should establish green finance standards and evaluation systems to ensure that funds are directed towards environmentally compliant hydrogen projects. Financial subsidies and tax incentives should be provided for green hydrogen projects to encourage financial institutions to invest in hydrogen development and accelerate the green transition. The government can refer to the U.S.’s Inflation Reduction Act in subsidising green hydrogen use, or the E.U.’s fuel tax hike to spurn fossil fuels.

13.Expand the green bond market: Leveraging Hong Kong's international capital market advantages, the government should increase the issuance of energy transition green bonds to support green hydrogen and zero-carbon energy projects both regionally and globally. It should lift the restrictions requiring these green assets to be located in Hong Kong.

14.Increase environmental fund allocation: The government should increase fund allocation from the Green Tech Fund and the Innovation and Technology Fund to enhance technological development in building a hydrogen economy. It should also establish an energy transition fund to support the local development of environmental technologies and attract technological talents.

15.Enhance public awareness and education: The government should strengthen the promotion of hydrogen energy and other zero-carbon energies, increase public awareness of these clean energies, encourage citizens to participate in related discussions and suggestions, and foster broad societal support for hydrogen and zero-carbon energies.

To realise carbon neutrality by 2050, the government must seize the opportunity on the innovative development of green hydrogen, build a low-carbon industrial system and usher in new economic development. Friends of the Earth (HK) looks forward to cooperating with the government and other stakeholders to promote the sustainable development of green hydrogen.