Hong Kong completes pilot schemes to trade green products with exchanges in mainland China

Hong Kong Exchanges and Clearing (HKEX) has successfully completed the first cross-border trading of green products, specifically Green Electricity Certificates (GECs), with exchanges in Guangzhou and Shenzhen. The Core Climate platform, launched in 2022, enabled 15 companies, such as Airport Authority and Bank of China (Hong Kong), to purchase and trade 100,000 GECs through the Guangzhou Power Exchange Centre.

GECs represent one megawatt-hour of renewable electricity and allow companies to meet their renewable electricity commitments. This pilot program marks the first time GECs have been added to the platform, enhancing Hong Kong's role as a leading sustainable finance center. The exchange aims to commercialize GECs in Hong Kong and strengthen collaboration with partners to develop transparent, efficient, and connected sustainable finance infrastructure across the Greater Bay Area.

Additionally, the Core Climate platform facilitated the first cross-boundary settlement of Shenzhen Emission Allowance transactions with the Shenzhen Green Exchange. These pilot programs support Hong Kong and mainland China's dual carbon goals and respond to policy priorities in the region, providing practical experience for the development of carbon markets.

The increased demand for green financing, driven by the US-Israel war on Iran and rising oil prices, has prompted global companies to seek alternative, stable energy sources, with estimates suggesting up to US$20 trillion in global expenditure over the next five to eight years for renewable energy investments.