HKEX completes first cross-border green pilots with Chinese mainland for Greater Bay Area

Hong Kong Exchanges and Clearing (0388) has completed first cross-boundary pilots in Green Electricity Certificates (GECs) and Carbon Allowances, with exchanges in Guangzhou and Shenzhen respectively, to boost green market connectivity in the Greater Bay Area.

The first pilot under HKEX's Core Climate platform enabled 15 Hong Kong corporates including HKEX, Airport Authority, Bank of China (Hong Kong) (2388), Henderson Land Development (0012) and others, to trade GECs through Guangzhou Power Exchange Centre with a total transaction volume of about 100,000 GECs, the exchange said.

GECs are China's nationally-recognized energy attribute certificates, with each certificate representing one megawatt-hour of renewable electricity, as an increasingly relevant tool for companies to meet their renewable electricity commitments.

The other one tested the settlement of Shenzhen Emission Allowance (SZEA) transactions with the Shenzhen Green Exchange (SGE), marking the first cross-boundary settlement between onshore and offshore carbon exchanges. It supports the nation's dual carbon goals and responds to policy priorities in the Chinese Mainland and Hong Kong, according to HKEX. 

Paul Chow Koon-ying, HKEX general counsel and chief sustainability officer, said, "The GEC transactions mark HKEX's first collaboration with a Chinese Mainland onshore power exchange, while the SZEA pilot builds practical experience for closer cooperation between the carbon markets of Hong Kong and the Chinese Mainland."

"We will work towards commercialising GECs in Hong Kong, with the aim of making them available through Core Climate, while strengthening collaboration with our partners to develop transparent, efficient and connected sustainable finance infrastructure across the region," he added.

Launched in 2022, Core Climate is Hong Kong's international green marketplace that provides companies with trading, custody and settlement services for carbon and green energy credit instruments.

Frank Feng

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