Hong Kong Energy Market

Hong Kong’s hydrogen industry provides a profitable business opportunity for U.S. companies due to favorable policies and active business engagement. In 2021, the local government announced the “Clean Air Plan for Hong Kong 2035”, highlighting the potential rapid growth of hydrogen in areas for green transport, comprehensive emissions reduction, and clean energy. In addition, green hydrogen energy is included in the medium-term decarbonization target of Hong Kong’s Climate Action Plan 2050, in which the government aims to reduce the total carbon emissions from 40 million tons in 2005 to 20 million tons in 2035 by strategically promoting several renewable energies. To achieve this target, the Policy Address 2023 outlined the government’s intention to start the preparatory work for legislative amendments regarding the production, storage, transportation and application of hydrogen fuel.

The local business sector also actively develops green hydrogen energy to echo government initiatives. In 2021, the CLP Group, one of the city’s dominant power utilities companies, started collaborating with General Electric to explore the feasibility of burning a variable blend of natural gas and hydrogen up to 100% hydrogen, thereby reducing the carbon emissions at power plants.

Opportunities for U.S. companies

Mature energy-related infrastructure

• The hydrogen mixture distribution network is readily available throughout Hong Kong. The city now owns a 3,700-kilometer-long underground pipeline network that transports town gas with 49% hydrogen concentration to local households.
• Hong Kong has an operating hydrogen electrolyzer production plant, which can produce around 100 cubic meters of hydrogen at an energy consumption rate of approximately 5.5kW/hour per cubic meter of hydrogen. In addition, the first public hydrogen station in Yuen Long is expected to be completed by 2025.

Green Transportation

• Hydrogen has been considered a more suitable candidate for heavy vehicle transportation due to its much larger energy density than battery. In 2023, Citybus introduced its first double-decker hydrogen bus and hydrogen refueling station, both approved by the authorities to put into service, reflecting the government’s continuous support of green transportation.
• Several companies in the marine private sector have announced their plans to use hydrogen to fuel their cargo ships running international and inter-continental lines. Being a global logistics hub, Hong Kong is expected to benefit from this latest development.

Replacement of natural gas with hydrogen in power generation

• Hong Kong has been retrofitting its pipeline networks to allow the injection and transportation of town gas with high hydrogen concentrations. It creates an immense demand for composite pipes, compressors, and advanced gas turbines that can accept fuel blends containing more than 50% hydrogen.

Strategic hydrogen technologies

• The local government established the Green Tech Fund in 2020 to accelerate decarbonization by supporting relevant research and development projects. It has approved four hydrogen-related projects, focusing on photocatalytic technology, membrane-less electrolyzers, solid-state hydrogen storage, and long-life hydrogen fuel cells. Although the Fund only targets local companies, it reflects a pressing demand for the aforementioned strategic technologies.

Hong Kong’s hydrogen industry offers an appealing prospect for U.S. green technology and energy companies. However, U.S. companies interested in entering this market shall always keep abreast of the local government’s latest policies and regulations to minimize business risks. For more information, please contact us at Office.Hongkong@trade.gov.