- Article
- Sustainability
- Transition to Net Zero
The Sustainable Transformation of Hong Kong's Transportation and Logistics Sector
The transportation and logistics (T&L) industry stands as one of the most significant contributors to greenhouse gas emissions within developed economies. In recent years, with a heightened focus on sustainability, coupled with more stringent emission regulations and government incentives globally, the reduction of carbon emissions has emerged as a pivotal objective for many industry players. HSBC recently hosted a sustainability roundtable for the T&L industry where experts delved into how Hong Kong's T&L sector is actively pursuing green transformation across land, marine and aviation while capitalising on opportunities to enhance cost-effectiveness.
Q1: What opportunities and challenges does the maritime sector face in sustainable transformation?
As consumer awareness of environmental protection continues to rise, prioritising sustainable practices could appeal to eco-conscious clientele. Hong Kong, leveraging its status as an international shipping centre and free port, is well-positioned to drive green shipping development. This includes initiatives to enhance maritime infrastructure and facilitating the transportation, storage and refuelling of new energy sources.
Currently, liquefied natural gas, methanol, hydrogen and ammonia are more mature decarbonisation technologies and common alternative fuels available for vessels. Yet adopting these energy sources requires significant capital investment for retrofitting existing vessels and engines alongside maintenance costs, posing a notable challenge to the industry, according to Daniel Tong Associate Director, Sustainability, DNV.
Q2: What are the transformation opportunities for public land transport?
In recent years, the sector has accelerated the shift towards the electrification of public transport to cut down on carbon emissions. This transition includes expanding electric vehicle (EV) infrastructure and promoting more eco-friendly urban transportation approaches. Notably, the adoption of electric and hydrogen energy technologies has experienced rapid growth.
Electrical energy
The Hong Kong SAR government has been actively promoting the widespread adoption of EVs, with plans to introduce approximately 3,000 electric taxis by the end of 2027, accounting for roughly one-sixth of all taxis in Hong Kong.
Establishing EV charging facilities is essential to enable wider EV uptake. For instance, to support the operations of 3,000 electric taxis, it is crucial to have sufficient, diverse charging stations, including quick chargers. These quick chargers allow taxi drivers to recharge their vehicles swiftly while giving them rest breaks.
Hydrogen energy
The Hong Kong SAR government announced the Strategy of Hydrogen Development in Hong Kong in June 2024 to promote wider applications of hydrogen energy in the city. Hydrogen-powered buses have been put into service this year, and some companies are developing hydrogen-powered trams. The construction of the first public hydrogen refuelling station is also underway.
However, Ralph Xu, Head of Green Transportation at the Hong Kong Productivity Council (HKPC) pointed out that a transparent, sustainable hydrogen-specific regulatory and legal framework could facilitate the safe use of this energy locally.
Q3: What carbon reduction strategies are the aviation industry implementing?
Airports
In 2009, the Airports Council International (ACI) launched the Airport Carbon Accreditation (ACA) programme to independently assess the carbon management efforts of airports. Major airports worldwide are working to improve their rankings in these evaluations by reducing carbon emissions.
According to Denis Ho, Business Development Manager of SGS, airports are implementing initiatives such as using hybrid, electric or renewable fuel-powered vehicles for internal logistics, as well as deploying autonomous driving systems for short-haul point-to-point routes within airports.
Airlines
The adoption of sustainable aviation fuels (SAF) is one of the endeavours the aviation sector is making in decarbonisation. Despite challenges such as supply shortages and the high cost of SAFs, SAFs have the potential to reduce approximately 65% of carbon emissions, enabling airlines to work towards achieving net-zero emissions by 2050.
Ho suggested that airlines can also introduce voluntary carbon offset programmes for passengers, so as to arouse their awareness of climate issues and further advocate for global climate action.
Q4: How is HSBC helping the industry promote sustainable development?
In response to Hong Kong's Climate Action Plan 2050, HSBC is committed to supporting our customers in their green transformation journey through our sustainability solutions, expertise and network.
Specifically tailored for the T&L sector, we have been supporting taxi operators in adopting hybrid vehicles, contributing to the city’s long-term goal of achieving carbon neutrality. Our HSBC Sustainability Tracker is designed to help organisations assess their level of sustainability development while offering suggestions tailored to each organisation’s needs.
Today HSBC finances a number of industries that significantly contribute to greenhouse gas emissions. We have a strategy to help our customers to reduce their emissions and to reduce our own. For more information visit www.hsbc.com/sustainability.