The source text is in Chinese. This English version is for reference only. In case of any discrepancy between this English version and the Chinese version, the Chinese version shall prevail.  

Recently, a simultaneous Mainland-Hong Kong Green Energy Matchmaking Event were hosted by Hong Kong and Shenzhen, during which nine memoranda of understanding were signed, with the aim of jointly building and enhancing the cross-border green marine fuel supply chain. 

At the event, the Transport and Logistics Bureau introduced the concept of "North-to-South export," emphasising Hong Kong’s strategic role in exporting Mainland-produced high-quality green fuel globally, and the city’s unique positioning and substantial opportunities amidst the global and national green shipping transition. With the global shipping industry committed to achieving net-zero emissions by 2050, green fuels are no longer optional, they are a necessity. The future position of Hong Kong in the global trade landscape will be determined by its identification of strengths and challenges, and its exploitation of this historic opportunity to become a global green fuel trading hub. 

Mainland as a primary green fuel producer—“North-to-South export” strategy 

Hong Kong’s greatest advantage in establishing itself as a green marine fuel trading and bunkering hub is its distinctive advantages of enjoying the strong support of the Motherland and being closely connected to the world. In recent years, Mainland China has emerged as a major global producer of green fuels. The strong national support is demonstrated by the aforementioned event, which ensures a stable green fuel supply for Hong Kong. Moreover, Hong Kong possesses a robust foundation as an international centre for finance, trade, and shipping, offering global shipping companies and traders high transparency, legal guarantees, and financial convenience. Currently ranked as the seventh-largest ship bunkering centre globally, Hong Kong has a solid foundation to further serve as the key "international trading window" for green marine fuel.

In fact, the Government have introduced several supportive measures. Late last year, the government issued the "Action Plan on Green Marine Fuel Bunkering". Outlining a clear roadmap, it also introduced temporary local licences allowing non-locally registered bunkering vessels to provide services within Hong Kong waters, initiated pilot programmes for simultaneous ship-to-ship  Liquefied Natural Gas (LNG) bunkering and cargo operations, and will launch the Green Maritime Fuel Bunkering Incentive Scheme later this year to encourage businesses to proactively trial and adopt green fuel bunkering. These initiatives send strong positive signals to the market. 

However, to avoid the scenario of all talk and no action, Hong Kong must proactively identify and address several existing challenges. 

Although the authorities have earmarked a site in South Tsing Yi for developing a green methanol storage facility, seeking industry expressions of interest within this year, it is still unclear whether this will sufficiently meet future market demand. Additionally, operating costs remain a major concern, closely tied to Hong Kong’s constrained land supply. Hong Kong’s bunkering costs are generally higher than those in Singapore. It is primarily due to the smaller local fuel storage capacity, which forces suppliers to frequently replenish fuel in small batches from external sources. Consequently, this drives up logistics costs. To enhance cost competitiveness regionally, Hong Kong must fundamentally strengthen its core capabilities along the fuel bunkering supply chain. 

At present, as the supply chain remains immature, suppliers generally offer cross-border bunkering services based on demand, using barges to transport fuel from nearby storage facilities to Hong Kong. While this on-demand model meets immediate needs, long-term issues around supply stability, economies of scale, and bargaining power persist. Currently, Singapore attracts more international biodiesel suppliers, whereas Shanghai and Zhoushan boast significant scale and cost advantages in LNG bunkering. Although Hong Kong leads the Greater Bay Area (GBA) in bunker volume, ranking second nationally and seventh globally, port competition is fierce. Hong Kong must proactively capitalise on the shipping industry’s green transition to promptly enhance its competitive advantages and recapture cargo flows. 

Securing export tax rebates, introducing modular tank-exchange model 

To overcome the challenges in developing green fuel trade, Hong Kong should pursue breakthroughs along four strategic directions: 

Firstly, there is a need to transition from a passive "North-to-South export" model towards a proactive "cross-border industry collaboration". The Mainland has cancelled export tax rebates for biofuel raw materials, clearly signalling its ambition to upgrade from raw-material exporter to a complete industry-chain developer. Hong Kong can proactively seek central government support, such as export tax rebates for Mainland-produced green fuels transshipped or bunkered via Hong Kong. It should explore the potential for Hong Kong’s organic and food waste to be sent to the Mainland for processing into bio-diesel, creating a cross-border circular economy. Additionally, given the GBA’s relatively abundant land supply, Hong Kong should jointly develop cross-border storage and logistics facilities to ease local storage pressures.

Secondly, local infrastructure development should be accelerated and innovative operational models should be introduced. In addition to promoting the Tsing Yi land sale, the Government should provide policy support and incentives for industry to retrofit existing oil depots or privately owned sites. This could include fee waivers or expedited approval processes to expand market supply channels. In bunkering infrastructure, alongside the existing ship-to-ship bunkering, Hong Kong should also adopt more efficient shore-to-ship and flexible truck-to-ship bunkering options. For instance, introducing the Mainland’s mature modular tank-exchange model could attract inland LNG-powered ships to refuel in Hong Kong. 

Thirdly, the city can assisting Mainland producers in obtaining internationally recognised green certifications to enhance the GBA’s regional advantages. Singapore has already established "green and digital shipping corridors" with Los Angeles, Rotterdam, and other ports, coordinating emissions standards, port fee incentives, and pilot projects. Hong Kong’s Action Plan mentions establishing a green corridor with a single port, but it should go further by collaborating closely with Shenzhen, Guangzhou, and other regional ports in green fuel supply and infrastructure investments, boosting the overall region’s international competitiveness. 

Facilitating green certification and developing futures markets 

Many Mainland green fuel production facilities lack internationally recognised green certifications, hindering industry upgrades. Hong Kong can facilitate Mainland producers in obtaining internationally recognised certifications, thus strengthening its strategic role in the national green fuel industry. 

Fourthly, it is important to encourage Hong Kong Exchanges and Clearing Limited (HKEX) to leverage its international network and the expertise of its subsidiary, the London Metal Exchange (LME), to develop futures contracts in methanol, LNG, and carbon emissions priced in US dollars or offshore RMB. This would position Hong Kong uniquely compared to Shanghai and Singapore, providing a differentiated risk management platform attracting international traders and investors, enhancing market liquidity, and gradually allowing Hong Kong to exercise pricing influence over Asia’s green fuel markets. 

In the global race towards green shipping transformation, if Hong Kong can seize the opportunity together with GBA cities to swiftly upgrade itself from a bunkering port to an Asia-Pacific green fuel trading hub, it will be able to shape future global shipping rules and decisively reinforce its irreplaceable status as an international maritime centre.