The Hong Kong Monetary Authority: Hong Kong will continue to deepen carbon reduction effectiveness and enhance climate resilience to solidify its position as a sustainable financial hub.

The Hong Kong Monetary Authority (HKMA) has announced that it coincides with the opening of "Hong Kong Green Week 2026" and the launch of the Phase 2B prototype, along with the commencement of public consultation. The HKMA will continue to lead in market development, public policy, industry priorities, and the latest technological advancements, continuously updating the classification framework to promote its greater role in Hong Kong's sustainable financial ecosystem, thereby consolidating Hong Kong's position as a regional sustainable finance hub. Specifically, Phase 2B further expands its coverage to include more green and transition activities and improves the assessment framework, which aligns with this year's "Green Week" focus on inclusive transition, climate adaptation, and resilience, providing a concrete discussion basis for attendees. Deepening Carbon Reduction Outcomes Phase 2B continues to revolve around two major goals: "mitigation" and "adaptation" to climate change. In terms of emission reduction, a total of ten new economic activities have been added across three industries: transportation, manufacturing, and waste management, which can be summarized into three main directions: Supporting Key Technologies to Drive Emission Reductions To promote low-carbon transition, certain key enabling technologies are needed. These technologies can facilitate the broader application of other low-carbon solutions, driving overall emission reduction effects. Therefore, Phase 2B has introduced new activities such as battery manufacturing, battery recycling, and low-carbon technology manufacturing. Battery storage can store renewable energy, providing power when generation is unstable, which helps promote the use of green electricity. Meanwhile, battery recycling can promote the circular reuse of resources, supporting the sustainable development of the electric vehicle market. Additionally, low-carbon technologies include the manufacturing of semiconductors, motors, and transformers, with semiconductors being core components of energy-saving systems, smart grids, and renewable energy installations, aiding in the rapid deployment of innovative carbon reduction technologies. Providing Transition Pathways for "Hard-to-Abate Industries" Some industries are essential to economic operations but, due to technological limitations, cannot significantly reduce emissions in the short term, such as the steel industry. These industries are commonly referred to as "hard-to-abate industries." To achieve overall carbon reduction, it is necessary to assist "hard-to-abate industries" in gradually transitioning and guiding funding to support lower-carbon technologies and production methods. Following this line of thought, Phase 2B has established technical standards for steel manufacturing. Two assessment paths are set: one assesses by "emission intensity," recognizing gradual emission reduction achievements; the other assesses by "technological improvement," encouraging the adoption of advanced reduction technologies. Enterprises can choose suitable assessment schemes based on their circumstances, advancing carbon reduction transitions in a pragmatic and feasible framework. Supporting Green Transportation and Low-Carbon Fuel Development The main focus of carbon reduction in the transportation sector includes vehicle electrification and the switch to lower-carbon fuels. Both are equally important in the classification framework. Concerning electrification, Phase 2B covers economic activities related to the procurement and use of electric buses, electric minibuses, and electric taxis, supporting reduced reliance on traditional fossil fuels. Regarding low-carbon fuels, Phase 2B covers the entire value chain of Sustainable Aviation Fuel (SAF), including production, blending, storage, and application, while also encompassing the production and application of green marine fuels, such as methanol and ammonia. The relevant technical standards provide clear references for enterprises keen on accelerating their transitions. Enhancing Climate Resilience The above measures target "mitigation," but "adaptation" to climate change is equally important. In recent years, extreme weather events like heatwaves in Europe and flooding in Asia have frequently caused energy disruptions, infrastructure damage, and significant economic losses, with climate risks effectively transitioning into financial risks. However, the United Nations Environment Programme estimates that the global financing gap for adaptation remains high, amounting to hundreds of billions of dollars. The market requires a clear and reliable assessment method to guide funding toward projects that genuinely enhance disaster resilience. For assessing adaptation projects, Phase 2B introduces a process-based assessment method (PBA). A systematic "five-step method" provides clear guidance on (1) defining the project scope, (2) risk identification, (3) measures design and implementation, (4) continuous monitoring, and (5) making improvements. Additionally, adaptation measures are categorized into "white list" and "non-white list." In the future, Hong Kong will continue to strengthen and enhance its influence as a sustainable finance hub through "Green Week." It will also develop practical application guidelines in response to market needs, assisting the industry in effectively utilizing the classification framework and understanding the banking sector's application status through surveys, providing references for future discussions on whether to incorporate the classification framework into banking regulatory policies.