Environmental Technologies

Overview

Environment Technologies Market in Hong Kong

	2010	2011	2012 (estimated)	2013 (estimated)
Total Market Size	552,000	235,000	200,000	200,000
Total Local Production	1,500,000	1,500,000	1, 500,000	1,500,000
Total Exports	4,996,000	5,635,000	5,800,000	6,000,000
Total Imports	4,048,000	4,370,000	4,500,000	4,700,000
Imports from the U.S.	522,000	597,000	680,000	780,000
Exchange Rate: 1 USD	7.8	7.8	7.8	7.8

Notes:
1. Unit: USD thousands.
2. Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
3. Data Sources:

Since there is no agreed upon definition of “environmental technologies” and considerable overlap when considering environmental features included in various types of machinery and products, market statistics for this sector are, at best, rough approximations.

Environmental technologies for this profile refers to the instruments and apparatus under HS codes: 841583 – air conditioning machines not incorporating a refrigerating unit; 841780 – industrial furnaces including incinerators; 842129 – filtering or purifying machinery and apparatus for liquids; 842139 – industrial use dust collectors and filtering or purifying machinery and apparatus for gases; 8479 – machinery for public works; 8543 – electrical machines and apparatus, having individual functions; 870911 – Electrical vehicles; 871190 – Motorcycles fitted with an auxiliary motor, other than those fitted with reciprocating internal combustion piston engine; 9026 – instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases; 9027 – instruments and apparatus for physical or chemical analysis; 9032 – automatic regulating or controlling instruments and apparatus.

Hong Kong relies heavily on imports to satisfy its environmental needs. Total environmental technology imports in 2011 amounted to US$4.37 billion. United States suppliers are active in the high-end segment, capturing about 13.7 percent of the total import market in 2011. Imports from the United States increased from US$521 million in 2010 to US$597 million in 2011, representing a growth rate of more than 14 percent.

Hong Kong is also a sourcing agent for environmental products for mainland China, where heavy green tech investments and tightening environmental regulation have emerged as major drivers of the industry regionally, if not globally. In 2011, re-export of environmental technologies to China through Hong Kong amounted to US$3.53 billion; accounting for approximately 63 percent of Hong Kong’s total environmental technologies re-exports.

The Hong Kong Government has been allocating significant resources toward tackling waste treatment, air pollution, and water pollution problems. Opportunities exist in the thermal and biological treatment of municipal solid waste, wastewater treatment, clean energy, energy efficiency, green building and electric vehicles.

Hong Kong has identified six industries, including the environmental industry as top prospects for future growth in its economy. The Hong Kong Government has been promoting the development of various new businesses related to environmental protection, including electric vehicles, clean energy, and products to enhance building energy efficiency, to stimulate the city’s economic growth. U.S. firms may look to supply or otherwise partner with this upstart Hong Kong industry.

With vigorous IPR protection, and the proximity to and experience in trading with mainland China, Hong Kong is an ideal entry point for U.S. environmental companies (especially small- and medium-sized firms) interested in the China market.

Sub-Sector Best Prospects

Air:

Water/wastewater:

Waste Management:

Wind Farm Projects:

Energy Efficiency:

Opportunities

Hong Kong has set a target of achieving a reduction in energy intensity of at least 25% by 2030 (with 2005 as the base year). To help achieve this goal, Hong Kong is raising the efficiency of new and old buildings through the provision of a US$57 million Buildings Energy Efficiency Funding Schemes to subsidize carbon audits and energy improvement projects. Over 5,000 building owners have applied for the funding so far. This initiative has created a new profession of energy and carbon auditors, business opportunities in energy audit / building accreditation training, as well as equipment sales. In spite of the Hong Kong Green Building Council’s development of Hong Kong’s own standard of building energy efficiency (“BEAM”), internationally recognized standards such as LEED will continue to be sought after for global benchmarking.

Hong Kong disposes of more than 3.2 million tons of municipal solid waste per year. Owing to landfill shortages, the government is developing several large-scale waste management facilities: an Integrated Waste Management Facility (incineration as its core technology) capable of treating 3,000 tons of waste per day; two organic waste treatment facilities to separate and treat food waste; and a sludge incineration facility with a daily capacity of 2,000 tons (coming online in 2013). U.S. companies could consider forming consortia to bid for the design and construction for the Integrated Waste Management Facility and other waste treatment facilities, or becoming an equipment supplier/sub-contractor.

In the next few years, Hong Kong will embark on a number of water and sewage treatment plant projects, ranging from the construction of new facilities and extensions to relocation of existing plants, mostly in the new town development areas in the New Territories and outlying islands. For example, the Hong Kong Civil Engineering and Development Department has recently conducted a feasibility study on relocating the Shatin Sewage Treatment Works to underground caverns. The relocation would take place over about five years, at an estimated project cost exceeding US$1.3 billion.

The Hong Kong Government plans to revamp its electrical power generation fuel mix in favor of clean energy. The current breakdown is: coal – 54%; natural gas – 23%; and nuclear power – 23%. Since the regulated rate of return of the two power generation companies which serve Hong Kong is linked to their emissions performance (and capital expenditure levels), both companies are working to invest in renewable energy such as offshore wind farms. The lead project for both power generating companies is to set up their individually onsite wind data collection center in 2012 and 2013 respectively.

The Hong Kong Government has been steadily introducing electric vehicles (EVs) and associated infrastructure to Hong Kong. Over 240 EVs are on local roads. EVs successfully entering the market include the Japanese models iMiEV and Leaf; Germany’s Smart Electric Drive; the United State’s Tesla and Brammo, the latter with electric motorcycles. In 2011, the value of total EV imports from the United States grew more than 400 percent to approximately US$0.8million. The Hong Kong Government has also set up a US$38 million Pilot Green Transport Fund to facilitate the trial use of new green transport technologies in the transport industry, including zero-emission buses and electric commercial vehicles.

To tackle regional sources of pollution, Hong Kong and its closest Chinese Province (Guangdong) jointly drew up a Regional Air Quality Management Plan, implemented the Cleaner Production Partnership Program, and initiated a joint study on regional water quality management. More recently, both sides and the Macau authorities also agreed to promote a “green Greater Pearl River Delta Region”.

In neighboring Macau, the government is also putting resources into environmental protection. In 2011, the Macau Government injected US$25 million to an Environmental Protection and Energy Conservation Fund to help local companies adopt new environmental technologies. The Macau Government also called for a total of 350 hectares of newly reclaimed land to be developed in a sustainable and low-carbon manner. Tax exemption is made available for the purchase of environmentally friendly vehicles. Moreover, installation of water recycling technologies and water saving devices continues to be heavily subsidized by the Macau Government.

Web Resources

Trade Shows:

Eco Expo Asia
Website: www.hktdc.com/fair/ecoexpoasia-en/
Description: Organized by the HK Trade Development Council, Messe Frankfurt (HK) Ltd. and the Environmental Bureau, Hong Kong Government, Eco Expo Asia is Hong Kong’s international trading platform and showcase for the latest environmental protection technologies. The 2010 and 2011 shows were supported by GEEP (Green Export Enabler Program, a U.S. Dept. of Commerce-sponsored program to help expand U.S. green tech exports to China; see paragraph below). GEEP will likely support Eco Expo Asia 2012.

Macao International Environmental Cooperation Forum & Exhibition (MIECF)
Website: www.macaomiecf.com/miecf2012/
Description: MIECF is a promising, new international environmental conference and trade fair held in Macao annually. The theme of the event is low carbon living and sustainable urban development in South China. AmCham Macau is a prominent supporter of the show, whose international agent is KoelnMesse.

Green Export Enabler Program (GEEP)
Website: www.greenexport.org
Description: GEEP is an initiative offered by the El Camino College Center for International Trade Development in collaboration with the U.S. Department of Commerce, the Export-Import Bank of the United States, and California Manufacturing Technology Consulting. GEEP seeks to increase global competitiveness and exports of California and U.S. green technologies to China, including Hong Kong and Macau.

Trade Associations

Environmental Contractors Management Association
Website: www.ecma.org.hk
Description: Membership is mostly comprised of waste management and janitorial service companies.

Green Council
Website: www.greencouncil.org
Description: The Green Council is a non-profit environmental organization promoting environmental protection.

Hong Kong Environmental Industry Association
Website: www.hkenvia.org
Description: The Hong Kong Environmental Industry Association promotes communication and collaboration among environment-related businesses.

Hong Kong Waste Management Association
Website: www.hongkongwma.org.hk
Description: The Hong Kong Waste Management Association’s members consist of organizations or individuals who advise the Hong Kong Government on the city’s waste management policies.

U.S. Commercial Service Hong Kong
Ms. Olevia Yim, Senior Commercial Specialist
Tel: (852) 2521-1467
Fax: (852) 2845-9800
Email: olevia.yim@trade.gov