Hong Kong can become a regional trading hub for green marine fuel and help augment China’s influence on supply and pricing, according to an industry player.
“Hong Kong’s advantages lie in its roles as an international free port, shipping and financial hub, and the government’s willingness to support energy transition and green finance,” said Leo Yang Xiaohu, president of CIMC Enric Holdings, which built the city’s first hydrogen refuelling station and related infrastructure in 2023.
By boosting domestic green fuel demand, Hong Kong can help Beijing fend off trade barriers overseas and enhance the nation’s influence on its pricing, Yang said in an interview on Wednesday. “If Hong Kong can develop a trading hub, we can have a bigger say in green fuel trading and pricing,” Yang said.
The European Union, the world’s largest biodiesel market, last August imposed anti-dumping duties on Chinese biodiesel, prompting producers to seek alternative markets.
Last year, the government published an action plan to develop Hong Kong into a green fuel bunkering or shipping-fuel supply centre. In February, Financial Secretary Paul Chan Mo-po pledged to provide tax exemptions for importing and consuming green methanol.
Secretary for Transport and Logistics Mable Chan Mei-po said in a statement on Wednesday that the Marine Department would gazette the code of practice for methanol bunkering this month.
The Marine Department will also launch a scheme this year offering incentives of up to HK$1 million (US$127,400) for companies that provide green fuel bunkering.
The city could also offer vessel operators financial and customs clearance advantages for buying green marine fuel, Yang said. He added that banks could provide green financing and help shippers trade carbon emission permits to incentivise the use of green fuel and the construction of supporting infrastructure.
CIMC Enric, a liquefied natural gas storage and logistics equipment maker, is a subsidiary of state-backed container maker China International Marine Containers (Group).
The company is constructing a plant in Zhanjiang, western Guangdong Province, with an annual production capacity of 50,000 tonnes of green methanol converted from agricultural and forestry waste.
Yang said the plant would be ready in August, and pilot production was expected to start in October. The plant’s capacity could be raised to 200,000 tonnes by next year, he added.
Compared with conventional fuel, renewable methanol could slash carbon dioxide emissions by up to 95 per cent, according to the Methanol Institute, a global trade association representing the world’s leading methanol producers, distributors and technology companies.
The demand for green fuel will surge as shipping firms align their fleets to meet the International Maritime Organisation’s targets to cut greenhouse gas emissions by at least 20 per cent by 2030 from 2008 levels, and by at least 70 per cent by 2040.
A few bunkering firms had expressed an interest in green methanol from CIMC Enric, and some shipping firms were also interested, Yang said.
The company’s equipment was capable of processing five types of biomass waste, and it had secured enough waste supply to produce up to 250,000 tonnes of the fuel, he added.
CIMC Enric signed an agreement on Wednesday with the Transport and Logistics Bureau to supply green methanol for bunkering.
Hong Kong and China Gas (Towngas), the piped-gas supplier, also signed an agreement with the bureau to supply green methanol that complies with international standards and to use the city as a trading and settlement hub for green maritime fuel.
Towngas also said the annual capacity of its waste-to-green methanol plant in Inner Mongolia would rise to 150,000 tonnes by the end of the year from 100,000 tonnes currently.
The company said it planned to build multiple plants with Foshan-based natural gas distributor Foran Energy, with an overall annual capacity of one million tonnes. The first facility, with a capacity of 200,000 tonnes, would be commissioned in 2028, it said. -- SOUTH CHINA MORNING POST
