Market Intelligence
Financial Services Carbon Capture and Management Energy Hong Kong

Hong Kong Financial Voluntary Carbon Market

Voluntary Carbon Credits (VCCs) are financial instruments representing the avoidance or removal of one metric ton of carbon dioxide or an equivalent greenhouse gas from the atmosphere. These credits are generated by projects designed to mitigate greenhouse gas emissions and are vetted and verified by an independent third party. The current landscape of the voluntary carbon market is thriving globally. In 2021, the market grew at a record pace, reaching $2 billion—four times its value in 2020—and is expected to reach between $10 billion and $40 billion by 2030.

Hong Kong presents a unique opportunity for the growth of the voluntary carbon credits business. According to a report published by the Hong Kong Monetary Authority, the city offers several benefits:

  1. Strategic Location: Hong Kong’s position as an international financial center and gateway to Mainland China links international investors with China’s carbon markets.
  2. Government Initiatives: The Hong Kong government and power companies have introduced voluntary market-based initiatives to promote renewable energy development and achieve the city’s carbon-reduction target by 2050. These initiatives contribute to the fight against climate change and open new business opportunities.
  3. Robust Financial Infrastructure: The launch of Core Climate by HKEX provides a platform for effective and transparent trading of voluntary carbon credits and instruments across Asia.

Recently, two Hong Kong-based carbon registries were launched to facilitate the trading of credits from projects reducing greenhouse gas emissions. The Asia Carbon Institute (ACI) established a non-profit carbon credits registry, and Carbonbase, in collaboration with ImpactX and the HBAR Foundation, unveiled the Global Climate Registry.

In conclusion, Hong Kong’s strategic location, supportive government policies, and strong financial infrastructure make it an appealing hub for businesses dealing with voluntary carbon credits. As the drive towards net-zero emissions intensifies, the demand for VCCs is expected to grow, presenting significant business opportunities in the city. 

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