9 Oct 2017
Environmental Protection Industry in Hong Kong
Hong Kong’s environmental protection industry focuses on six business areas, including (1) water conservation and pollution control, (2) air and odour pollution control, (3) energy conservation, (4) waste treatment, disposal and recycling, (5) noise control and mitigation, and (6) environmental consulting services.
Phase 3 of the Hong Kong Science and Technology Parks (HKSTP) was completed in April 2016. Meanwhile, Phase 1 of the Organic Waste Treatment Facilities (OWTF) at Siu Ho Wan in North Lantau started in December 2014 and is slated for completion in 2017.
Hong Kong and the Chinese mainland further strength co-operation in the environmental industry, after the Agreement on Economic and Technical Cooperation was signed on 28 June 2017.
According to the latest available figures, the value added of Hong Kong’s environmental protection industry grew up by 1.1% year on year to HK$7.9 billion in 2015, while the average annual growth reached 4.9% for the last 5 years (i.e. 2011-2015). Employment by the industry reached 43,750 persons in the same year, accounting for 1.2% of Hong Kong's total employment.
It is estimated the industry consists of some 300 establishments, which are largely small and medium-sized enterprises. They largely focus on six business areas, including (1) water conservation and pollution control, (2) air and odour pollution control, (3) energy conservation, (4) waste treatment, disposal and recycling, (5) noise control and mitigation, and (6) environmental consulting services. Some companies are also engaged in import/export and wholesale trading of waste and scrap.
The EcoPark and Recovery of WEEE
The EcoPark, one of the waste management facilities set up by the government, is located in Tuen Mun with a site area of 20 hectares providing long term land at affordable costs for the recycling industry since 2007. A number of enterprises engaging in recycling of waste cooking oil, waste computer equipment, waste metals, waste plastics, waste wood, waste batteries, etc. have a presence in the EcoPark.
Hong Kong households and business establishments dispose of more than 70 thousand tonnes of computers and electrical and electronic equipment every year. To reduce the quantity of waste computers and waste electrical and electronic equipment disposed of at landfills, the Government introduced the Waste Electrical and Electronic Equipment (WEEE) Recycling Programme, which aims to channel WEEE for reuse and recycling instead of disposal.
The EcoPark WEEE Recycling Centre was opened in 2011 in order to help proper disposal of used electrical appliances and reduce the pressure on the landfills. The WEEE collection is focused on major designated items like TV sets, refrigerators, washing machines, video or audio equipment, microwave ovens, fans, water heaters, rice cookers, air-conditioners, heaters, electronic games and mobile phones. The WEEE is brought to the WEEE Recycling Centre for inspection and/or repair. Items that are beyond repair are dismantled and their useable components and materials are recovered for reuse and recycling.
Development of Green Technology
The HKSTP accommodates a number of environmental enterprises which are devoted to developing technologies related to environmental protection and clean energy. They comprise Hong Kong companies as well as environmental companies from other countries and territories. Companies currently operating out of the HKSTP include Beghelli Asia Pacific Ltd from Italy, Liricco Technologies Ltd and Waste & Environmental Technologies Ltd.
Phase 3 of the HKSTP completed construction in April 2016. This project was one of the Government’s initiatives to boost the development of green technology in Hong Kong and to attract high-tech investment by private companies. It can accommodate about 150 green technology companies and create 4,000 research and development positions of green technology in the territory.
Another case in point is the Dunwell Enviro-Tech (Holdings) Ltd at the Yuen Long Industrial Estate which provides used oil and waste water treatment, recycling and reuse services. Dunwell turns waste lubricating oil into cost-effective finished oil using its patented vibrating membrane advanced treatment (VMAT) technology.
The ASB Biodiesel plant established in Tseung Kwan O Industrial Estate is a foreign investment project essentially funded by Bahrain and other Middle Eastern investors. It adopts Austrian technology to process waste oil, such as waste cooking oil and grease trap oil, with the capacity to produce 100,000 tons of low-carbon transport fuel per year.
Phase 1 of the OWTF project at Siu Ho Wan in North Lantau commenced in December 2014 and is slated for completion in 2017. Using biological treatment technologies, this facility is expected to convert 200 tons of organic waste into biogas and 20 tons of compost and other useful resources daily.
Hong Kong-Guangdong Cross-boundary Cooperation
In April 2008, the Government launched a Cleaner Production Partnership Programme to encourage Hong Kong-invested enterprises in Guangdong to actively participate in improving the quality of the environment in the region. In light of the environmental benefits and positive feedback from industry, the Programme (as endorsed by the 20th Working Meeting of the Hong Kong/Guangdong Co-operation Joint Conference held in March 2015) has been extended until 31 March 2020. Under the Programme, assistance is given to Hong Kong factories in the PRD to use cleaner production technologies and operation mode so that concerted efforts are made to create a cleaner environment. Efforts include:
- Increase energy efficiency
- Reduce air pollutants emission
- Lower production cost
- Reduce sewage discharge
Through cleaner production, Hong Kong-invested manufacturers can meet national and Guangdong province’s environmental protection standards, enhance their environmental performance, lower cost, increase competitiveness and improve their corporate image. This programme targets eight industries, namely chemical products, food and beverage, furniture, metal and metal products, non-metallic mineral products, paper making and paper products, printing and publishing, and textiles. Currently, more than 180 environmental technology service providers have registered with this programme, including service companies in Hong Kong and the PRD.
In April 2010, Hong Kong and Guangdong signed a “Framework Agreement on Hong Kong/Guangdong Co-operation”, and agreed to, among others, cooperate on environmental protection like:
Reducing pollutants: jointly exploring the reduction targets and options for total air pollutants emission in the PRD region in 2011-2020.
Cleaner production: help implement the “Cleaner Production Partnership Programme” to support Hong Kong-invested enterprises in Guangdong to conduct assessment, develop demonstration projects, provide certification services, etc. in order to improve energy efficiency and to reduce air pollution.
Electric cars: introducing electric cars to major greater PRD cities such as Hong Kong, Guangzhou and Shenzhen, and jointly fostering research and development, manufacturing, general application and development of the relevant auto-parts industry for electric cars in the greater PRD region.
In June 2012, the Government jointly published the Regional Co-operation Plan on Building a Quality Living Area with Guangdong and Macau. The Plan covers long-term co-operation initiatives in five major areas, namely (1) environment and ecology, (2) low-carbon development, (3) culture and social living, (4) spatial planning and (5) green transportation systems, which aim to build a green and quality living area in the greater PRD region.
At the 21st Working Meeting of the Hong Kong/Guangdong Co-operation Joint Conference held in March 2016, Hong Kong and Guangdong agreed to continue to take forward the air pollutant emission reduction work, conduct mid-term review on the emission reduction targets for 2015 and 2020 and implement various emission reduction measures for the sake of continuously enhancing the living environment in the region.
Since the implementation of the second supplement to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) in January 2006, all products of Hong Kong origin, including those related to environmental protection can be imported into the mainland at zero tariffs. Detailed information, as well as the origin rules for Hong Kong products, is available here.
On the other hand, Hong Kong service providers can set up wholly-owned enterprises on the mainland under CEPA to provide architectural design and engineering services etc., including those in relation to environmental system engineering services. When Hong Kong service providers set up construction engineering design enterprises in China, their track record in Hong Kong and on the mainland can be used by the authorities as the basis for assessing their application for enterprise qualification on the mainland.
Also, under supplement IV to CEPA, starting from 1 January 2008, Hong Kong service providers may set up wholly-owned enterprises on the mainland to provide the following environmental services (not including environment quality monitoring and pollution source inspection):
A. Sewage services (CPC 9401)
B. Refuse disposal services (CPC 9402)
C. Cleaning services of exhaust gases (CPC 9404)
D. Noise abatement services (CPC 9405)
E. Nature and landscape protection services (CPC 9406)
F. Other environmental protection services (CPC 9409)
G. Sanitation and similar services (CPC 9403)
Pursuant to supplement V to CEPA, the mainland agreed that with effect from 1 January 2009, the Guangdong province is permitted to approve the qualification of the Hong Kong service suppliers for setting up enterprises to operate environmental pollution control facilities in Guangdong.
Pursuant to supplement IX to CEPA, from 1 January 2013 Guangdong Province can approve Hong Kong service suppliers for undertaking entrusted environmental monitoring activities in Guangdong. These have greatly simplified the formalities involved in the application by Hong Kong service companies to mainland authorities for permission to provide environmental services in Guangdong.
Also pursuant to supplement X to CEPA, from 1 January 2014 the substantive business engaged by Hong Kong service suppliers in the operation of environmental pollution control facilities in both Hong Kong and the mainland can be taken into account in assessing their applications for the qualification in the operation of environmental pollution control facilities in the mainland.
Further to the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalisation of Trade in Services in Guangdong, from 1 March 2015 Hong Kong service providers can enjoy national treatment when providing the abovementioned services (items A to G) in Guangdong by way of commercial presence.
Pursuant to the Agreement on Trade in Services under CEPA signed on 27 November 2015, from 1 June 2016, Hong Kong service providers can enjoy national treatment when providing environmental protection services listed in items A to G above on the mainland in the form of commercial presence.
Pursuant to the Agreement on Economic and Technical Cooperation signed on 28 June 2017, Hong Kong and the mainland further strengthen co-operation in the environmental industry, including facilitating exchange of information, co-operation in training, organising trade exhibitions, seminars, etc.
Details of CEPA can be found here.