Hong Kong Taxonomy for Sustainable
Finance
Supported by

May 2024

Contents
1.

2.

Introduction .................................................................................................................................... 3
1.1.

The need for developing a taxonomy for Hong Kong ............................................................. 3

1.2.

Core principles ........................................................................................................................ 4

1.3.

Alignment of the Hong Kong Taxonomy ................................................................................. 5

Taxonomy spreadsheet ................................................................................................................... 6
2.1.

3.

Prototype spreadsheet ........................................................................................................... 7

Sectors in the Hong Kong Taxonomy ............................................................................................ 16
3.1.

Sector: Electricity, Gas, Steam and Air Conditioning Supply ................................................ 18

3.1.1.
3.2.

Electric power generation, transmission and distribution .............................................. 18

Sector: Transportation and Storage ...................................................................................... 22

3.2.1.

Land transport including railways ................................................................................... 22

3.2.2.

Water Transport .............................................................................................................. 26

3.3.

Sector: Water Supply; Sewerage, Waste Management and Remediation Activities ........... 31

3.3.1.

Sewage sludge treatment ............................................................................................... 31

3.3.2.

Waste Collection, Treatment and Recycling ................................................................... 33

3.4.

Sector: Construction ............................................................................................................. 38

3.4.1.

Construction and renovation of buildings....................................................................... 38

Annex 1: List of Abbreviations .............................................................................................................. 46

2

1. Introduction
1.1.

The need for developing a taxonomy for Hong Kong

Climate change is one of the most pressing global issues. Its impact on the planet can be felt in theform of rising temperatures, melting glaciers, rising sea levels, and more frequent natural disasters.
The continued burning of fossil fuels and other human activities are causing greenhouse gas (GHG)
emissions, trapping heat in the atmosphere and aggravating the issue. Asia is one of the places mostvulnerable to climate change as the region is experiencing changes in rainfall patterns, rising sea levels,and more frequent extreme weather events, such as typhoons and floods. These events can lead tocrop failures, water scarcity, and infrastructure damage, which can have a significant impact on theregion's economies. Moreover, the low-lying landscape makes this region particularly vulnerable torising sea levels.
Hong Kong is no exception. According to the Hong Kong Observatory, temperature increased at a rateof 0.28℃ per decade during 1993-20221 whilst, on average, the mean sea level at Victoria Harbourrose at a rate of 32 millimetres per decade during 1954-20222. In addition, in recent years Hong Kongis experiencing more frequent and intense weather events, such as typhoons and heavy rainfalls.
These events disrupt the city's transportation and cause damages to infrastructure, affecting business
operation and daily lives of peoples.
In an effort to combat climate change, 196 Parties at the United Nations (UN) Climate Change
Conference adopted the Paris Agreement in 2015 3 . As part of China, the Hong Kong Special
Administrative Region has the duty to make its contribution in order to achieve the goals of the Paris
Agreement. In 2021, the Government announced the “Hong Kong's Climate Action Plan 2050”, which
set out four major decarbonisation strategies to allow it to achieve carbon neutrality before 2050: the“net-zero electricity generation”, “energy saving and green buildings”, “green transport” and “waste
reduction”. To support the global action on climate change, the financial sector has a key role to play.
It can green the world by directing capital flows towards sustainable investments and away from highemitting industries, hence driving the transition to a sustainable future.
In this regard, a sustainable finance taxonomy is an important tool as it provides a standardisedframework for classifying and labelling financial products and investments based on theirenvironmental sustainability. This classification system allows investors to identify and invest in
activities that are making a positive impact on the environment while avoiding those that have anegative impact. It helps to align investment decisions with climate goals and reduce the risk ofinvesting in assets that are not aligned with a low-carbon future. It can also help unlock newinvestment opportunities for green technologies and sustainable projects and increase transparency
and accountability in the financial sector.
Given the critical role a sustainable finance taxonomy can play in shaping green financial markets, theHong Kong Monetary Authority (HKMA) has commissioned Climate Bonds Initiative (Climate Bonds)
to work on a green classification framework for adoption in the local market. This will help underpin
Hong Kong’s instrumental role in bridging green financial flows between Mainland China and the restof the world, and hence strengthen Hong Kong’s status as an international green finance hub.

1 https://www.hko.gov.hk/en/climate_change/obs_hk_temp.htm
2 https://www.hko.gov.hk/en/climate_change/obs_hk_sea_level.htm
3 https://unfccc.int/process-and-meetings/the-paris-agreement

3

1.2.

Core principles

The Hong Kong Taxonomy is intended to provide financial sectors professionals with consistent andinternationally recognised definition of “green” and “environmentally sustainable” (collectively
referred to as “green” hereafter) economic activities. It will be guided by scientific principles and beinteroperable, comparable and inclusive of other green definitions globally. More specifically, it will
be based on the following core principles that ensure its credibility, scientific approach, and alignment
with all important benchmarks:
1) Alignment with the Paris Agreement. The Hong Kong Taxonomy is primarily focused onproviding clear definitions regarding the emissions intensity performance required of
economic activities in order to keep global warming well below 2℃, ideally aiming for 1.5℃.
The criteria represent the maximum GHG-emissions intensity an economic activity can haveto avoid breaching the remaining carbon budget. At this stage, climate change mitigation isthe central environmental objective of the Taxonomy. The Hong Kong Taxonomy shall thus beobjective in nature, supported by clearly defined metrics and thresholds aligned to the Paris
Agreement, and science-based targets.
2) A proof from greenwashing. By synthesising existing taxonomies’ best practices into an easyto-use set of criteria, the Hong Kong Taxonomy’s goal is to provide more clarity about what
can be considered ‘green’, and to ensure that claims of meeting this definition can be verified
accordingly.
3) Interoperability with other taxonomies. The Hong Kong Taxonomy considers significant
sustainable finance taxonomy developments that have occurred in other jurisdictions,particularly the Mainland China, the EU and the ASEAN. The key taxonomies referenced are
the Common Ground Taxonomy (CGT), the European Union (EU) Taxonomy, the Green Bond
Endorsed Projects Catalogue, ASEAN Taxonomy and the Climate Bonds Taxonomy (CBT). This
was accomplished by categorising activities in accordance with the International Standard
Industrial Classification of All Economic Activities (ISIC) and Hong Kong Standard Industrial
Classification (HSIC) codes, and as far as possible, using universally applicable metrics.
4) Science-based criteria and thresholds. The thresholds reflect the ambition required to meetglobal decarbonisation objectives. In many instances, the thresholds follow a trajectory thataligns with the overall need to transition the global economy to net-zero emissions by 2050.
5) Foundations of Do No Significant Harm (DNSH) and Minimum Social Safeguards (MSS). While
the Hong Kong Taxonomy primarily focuses on climate change mitigation, it acknowledges theinterconnectedness of sustainability issues. The importance of DNSH and MSS is recognized
and will be explored in future development.

4

1.3.

Alignment of the Hong Kong Taxonomy

The Hong Kong Taxonomy aims to achieve interoperability with other reference taxonomies. The tablebelow presents whether and how reference taxonomies are adopted/adapted.
Figure 1: Taxonomy compatibility table

Sectors in Hong Kong
Taxonomy

CommonGroundTaxonomyEU
Taxonomy

MainlandChina
Taxonomy

Electricity generation
using concentrated
solar power technology
Electricity generation
using solar photovoltaic
technology
Electricity generationfrom wind power
Construction andoperation of public
transportation systemin urban and rural areas
Construction andoperation of personal
mobility devices, cycle
logistics
Water Transport(freight and passenger)
Collection and transport
of non-hazardous waste
in source segregatedfractionsUtilisation/ treatmentof domestic waste –anaerobic digestion

Tier 1 Green
Tier 1 Green

Tier 1 Green

Sewage sludge
treatment – anaerobic
digestion
Construction of newbuildings
Renovation of buildings

Colour Coding
Level of ambition isalignedASEAN
Taxonomy(V2)

AdaptedCriteria not yet
developed/
Comparison not yet
conducted
5

ClimateBonds
Taxonomy2. Taxonomy spreadsheet
The Taxonomy spreadsheet in Section 2.1. provides an overview of all the activities that have been
included for each sector in the Taxonomy. The activities have been listed in the spreadsheet alongwith the activity description and key metrics. The substantial contribution criteria for each activity thatdefines the thresholds to classify the activity as green can be further referenced at the granular levelby clicking on the link to the corresponding activity cards. Additionally, the activities have been
mapped to HSIC codes and the closest taxonomy reference, to support interoperability and local
applicability.
The Taxonomy spreadsheet thus provides an initial reference list to users to identify all the activities
included in the Taxonomy for each sector, and they can further reference to the linked activity cards(Section 3) for detailed information regarding the sector, metrics and criteria to classify the activity as
green.
Structurally, the prototype spreadsheet is divided into three layers:-

Layer 1: Taxonomy activities and mapping
Layer 1 columns of the Spreadsheet represent the mapping of HSIC codes for each activity,
including the activity name and description. More details are provided below:
o To support interoperability and ease of comparison to other taxonomies, the HSIC
Industry class for each activity is also mapped against its corresponding ISIC and NACE
codes
o It is noted that a prototype activity can be mapped against one or more HSIC Industry
subclasses based on the specific activity description as the HSIC and ISIC classification
systems do not perfectly align.

-

Layer 2: Key Metrics
The corresponding Layer 2 columns of the Spreadsheet represent the key metrics for the
prototype activity that has been adopted/adapted from a specific reference taxonomy. In
most cases, prototype activities align and adopt/adapt CGT activity metrics and criteria.

-

Layer 3: Substantial contribution criteria
The layer 3 column of the Spreadsheet defines the substantial contribution criteria of the
prototype activity. For ease of review, this column references the activity cards, which containa more granular description of the prototype activity’s technical screening criteria.

6

2.1.

Prototype spreadsheet
1. Taxonomy Activities and Mapping

HSIC
Industry
Section

HSIC
Industry
Division (2Digit)

41 Construct
ion ofbuildings

HSIC Industry
Group (3 Digit)

411: Erection ofarchitectural
superstructures,
building
construction
412: Structuralsteel frameworkerection
419: Other newbuilding
construction
works

HSIC Industry Class (4 digit) (Corresponding ISIC / NACE)

4110: Erection of architectural superstructures, building
construction(ISIC: 4100 - Construction of Buildings)(NACE: 41.10 - Development of building projects; 41.20 Construction of residential and non-residential buildings)
4120: Structural steel framework erection(ISIC: 4100 - Construction of Buildings)(NACE: 41.10 - Development of building projects; 41.20 Construction of residential and non-residential buildings)
4191: Structural alteration and addition works(ISIC: 4100 - Construction of Buildings)(NACE: 41.10 - Development of building projects; 41.20 Construction of residential and non-residential buildings)
4321-Electrical equipment installation and maintenance(ISIC: 4321 - Electrical Installation)(NACE: 43.21 - Electrical installation)

FConstruction

43 Specialisedconstruction
activities

432-Building
services
installation andmaintenanceactivities

4322-Ventilation, gas and water fitting installation andmaintenance activities(ISIC: 4322 - Plumbing, Heat and Air-Conditioning
Installation)(NACE: 43.22 - Plumbing, heat and air-conditioning
installation)
4329-Other construction installation and maintenance(ISIC: 4329 - Other Construction Installation)(NACE: 43.29 - Other construction installation)

439 - Building
finishing andother specialised
construction
activities

4391-Decoration, repair and maintenance for buildings(ISIC: 4330 - Building Completion and Finishing)(NACE: 43.3 - Building completion and finishing)
4399-Other general finishing and specialised construction
works(ISIC:4390 - Other Specialized Construction Activities)(NACE: 43.9 - Other specialised construction activities)

HSIC Industry Subclass (6 Digit)

Taxonomylevel
activity

Description

ClosestTaxonomy
Alignment

411000: Erection ofarchitectural
superstructures,
building
construction
412000: Structuralsteel frameworkerection
419100: Structural
alteration andaddition works
4321XX: Electricalequipment
installation andmaintenance
4322XX: Ventilation,
gas and water
fitting installationand maintenanceactivities
4329XX: Other
construction
installation andmaintenance439101: Interior
fitting, decoration
and repairs forbuildings
4399XX: Other
general finishingand specialised
construction works

7

Constructi
on of newbuildings

Constructi
on of newbuildings

CGT F1.1
Construction of newbuildings

2. Key Metrics

1) Operational emissions:a. Primary Energy Demandb. Energy Consumption
c. Direct emissions of building
d. Reference to PCAF technicalguidance on operational emissions
assessment.
2) Energy savings: The share of totalor relative energy consumption thatcan be saved because of theimplemented measures.
3) Energy consumption of buildings
compared to peers4) Buildings Certification Schemes:
BEAM Plus is commonly used in HongKong.
5) Zero-Carbon-Ready Building
Certification & (Upcoming) Net Zero
Building Certification: HKGBC is in
the process of developing a newbuilding certification scheme which isprimarily focused on the emissions
performance of buildings in Hong
Kong.
Note: Items 1 to 3 in the above list of
Metrics are the most ideal, however,this data may not be adequately
available across the sector. As such,it is recommended that item 4(BEAM Plus) should be the main
criterion for Hong Kong while item 5(Zero-Carbon-Ready Building
Certification & Net Zero Building
Certification) should be a
supplementary criterion to provide
flexibility for compliance.

3. Substantial
Contribution
Criteria

Please referto the activity
card for thefull set ofcriteria

1. Taxonomy Activities and Mapping
HSIC
Industry
Section

HSIC
Industry
Division (2Digit)HSIC Industry
Group (3 Digit)

HSIC Industry Class (4 digit) (Corresponding ISIC / NACE)

HSIC Industry Subclass (6 Digit)

41 Construct
ion ofbuildings

419: Other newbuilding
construction
works

4191: Structural alteration and addition works(ISIC: 4100 - Construction of Buildings)(NACE: 41.10 - Development of building projects; 41.20 Construction of residential and non-residential buildings)

419100: Structural
alteration andaddition works

4321-Electrical equipment installation and maintenance(ISIC: 4321 - Electrical Installation)(NACE: 43.21 - Electrical installation)

4321XX: Electricalequipment
installation andmaintenance4322-Ventilation, gas and water fitting installation andmaintenance activities(ISIC: 4322 - Plumbing, Heat and Air-Conditioning
Installation)(NACE: 43.22 - Plumbing, heat and air-conditioning
installation)

4322XX: Ventilation,
gas and water
fitting installationand maintenanceactivities

4329-Other construction installation and maintenance(ISIC: 4329 - Other Construction Installation)(NACE: 43.29 - Other construction installation)

4329XX: Other
construction
installation andmaintenance4391-Decoration, repair and maintenance for buildings(ISIC: 4330 - Building Completion and Finishing)(NACE: 43.3 - Building completion and finishing)

4391XX:
Decoration, repair
and maintenanceforbuildings

4399-Other general finishing and specialised construction
works(ISIC:4390 - Other Specialized Construction Activities)(NACE: 43.9 - Other specialised construction activities)

439101: Interior
fitting, decoration
and repairs forbuildings

432-Building
services
installation andmaintenanceactivities

FCons
truction

43 Specialisedconstruction
activities

439 - Building
finishing andother specialised
construction
activities‘

8

Taxonomylevel
activity

Renovatio
n ofexistingbuildings

Description

Renovatio
n ofexistingbuildings

ClosestTaxonomy
Alignment

CGT F1.2
Renovationof existingbuildings

2. Key Metrics

1) Primary Energy Demand: Amountof energy that must be generated
originally in order to meet the totalenergy demand of a building(kWh/m2)
2) Energy Consumption: Totalamount of electricity or equivalent
electricity, and gas consumed by thebuilding per annum (kWh/m2/year)
3) Direct emissions of building:Greenhouse gases emitted from
activities under the tenant or
landlords' control - (KgCO2/m2/year)

3. Substantial
Contribution
Criteria

Please referto activity
card for thefull criteria

HSIC
Industry
Section

HSIC
Industry
Division(2 Digit)

HSIC
Industry
Group (3Digit)

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)

Electricity
generation
using
concentrated
solar power

DElectricit
y and
gas
supply35Electricand gassupply351Electric
power
generation,transmissio
n anddistribution

3510 - Electric power generation,transmission and distribution(ISIC: 3510 - Electric power
generation, transmission anddistribution)(NACE:35.11 - Production ofelectricity)

35100Electric
power
generation,transmissio
n anddistribution

Description

Closest Taxonomy
Alignment

Electricity generation using
concentrated solar power(CSP) technology.
Construction and operationof facilities using solar
thermal power to generate
electricity.

CGT D1.2
Electricity
generation using
concentrated solar
power (CSP)
technology

Electricity
generation
using solar
photovoltaic
technology

Electricity generation using
solar photovoltaic (solar PV)
technology. Construction
and operation of facilities
using concentrated solar
photovoltaic power togenerate electricity.

CGT D1.1
Electricity
generation using
solar photovoltaic
technology

Electricity
generationfrom wind
power

Construction or operation ofelectricity generation
facilities that produce
electricity from wind power.

CGT D1.3
Electricity
generation fromwind power

9

2. Key Metrics

3. Substantial Contribution
Criteria

Please refer to activity card forthe full criteria.
Automatically eligible if Use ofProceeds comply with activity
description.

gCO2/kWh: Reflects theemissions intensity forelectricity generation,and is based on life cycle
emissions to account for
GHG emissions
throughout the value
chain of energy
production processes

Please refer to activity card forthe full criteria.

Please refer to activity card forthe full criteria.
Automatically eligible if Use ofProceeds comply with activity
description.

HSIC
Industry
Section

HSIC
Industry
Division(2 Digit)

HSIC
Industry
Group (3Digit)
491Railway
and cabletransport

HTranspor
tation,storage,postalandcourier
services

49 - Land
Transport

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)
4910-Railway and cabletransport
491000(ISIC: 4921 - Urban and Suburban
Railway andPassenger Land Transport)
cable(NACE: 49.31 - Urban andtransport
suburban passenger landtransport)
4921 - Public bus services(ISIC: 4921 - Urban and Suburban
492100 Passenger Land Transport)
Public bus(NACE: 49.31 - Urban andservices
suburban passenger landtransport)

4923 - Non-scheduled public
light bus services(ISIC: 4922 - Other Passenger
Land Transport)(NACE: 49.39 - Other passenger
land transport n.e.c.)492300 Nonscheduled
public lightbus services

4924- Scheduled public light bus
services(ISIC: 4922 - Other Passenger
Land Transport)(NACE: 49.39 - Other passenger
land transport n.e.c.)492400 Scheduled
public lightbus services

4925 - School bus services(ISIC: 4922 - Other Passenger
Land Transport)(NACE: 49.39 - Other passenger
land transport n.e.c.)492500 School bus
services

492 - Land
Transport
by roadConstruction
and operationof publictransportation
system inurban andrural areas

Description

Purchase, financing, leasing,rental and operation ofurban and suburban
transport vehicles forpassengers and roadpassenger transport. This
includes construction andoperation of subways, lightrailways, tram, and otherurban rail transportation
facilities; construction andoperation of high-capacity
public transportation
facilities, such as BRT bus
stations, lines and otherfacilities construction andoperation; purchase of
public transportation
vehicles, etc.

10

Closest Taxonomy
Alignment

CGT H1.1.
Construction andoperation of public
transportation
system in urban
and rural areas

2. Key Metrics

The transport sector
criteria require that
operated fleets tobecome more efficient
over time by linking
eligibility to emissions
performance below acertain threshold set toensure substantiallyreduced emissions.
Emission reduction
thresholds are based on
performance metrics:• CO2e emissions perpassenger kilometre(gCO2e/pkm);• CO2e emissions per
vehicle kilometre(gCO2e/vkm);• CO2e emissions per
tonne kilometre(gCO2e/tkm).

3. Substantial Contribution
Criteria

Please refer to activity card forthe full criteria.
The trains and passenger
coaches that have zero direct(tailpipe) CO2 emissions
Specific criteria for projects inthe EU to align with EU
Taxonomy

HSIC
Industry
SectionHTranspor
tation,storage,postalandcourier
services

HSIC
Industry
Division(2 Digit)

49 Land
Trans
port

HSIC
Industry
Group (3Digit)

499 Otherlandtransport
services

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)

4990 - Other land transport
services(ISIC: 4922 - Other Passenger
Land Transport)(NACE: 49.39 - Other passenger
land transport n.e.c.)499000 Other landtransport
services

Construction
and operationof personal
mobility
devices, cycle
logistics

Description

Selling, purchasing,financing, leasing, renting
and operation of personal
mobility or transport devices
where the propulsion comesfrom the physical activity of
the user, from a zero
emissions motor, or a mix ofzero-emissions motor andphysical activity. This
specifically also includes:- Construction of urban
walking and cyclingtransportation systems,
including public bicycle
rental sites, non-motorized
vehicle parking facilities,
road crossing facilities andother slow-moving urban
systems.
- Construction and operationof shared transportation
infrastructure, such assystems for public rental
bicycles, online bicycle
rental, online electric bicycle
rental, online car rental, carsharing, parking facilities andequipment, and bicycle
parking facilities.
- The provision of freighttransport services by (cargo)bicycles.
- Selling, purchasing,financing, leasing, renting
and operation of private
electric or hydrogen vehicles

11

Closest Taxonomy
Alignment

2. Key Metrics

3. Substantial Contribution
Criteria

Please refer to activity card forthe full criteria.

CGT H1.5.
Construction andoperation of
personal mobility
devices, cycle
logistics

1) Automatically eligible if the
propulsion of personal mobility
devices comes from the physicalactivity of the user, from a zeroemissions motor, or a mix ofzero-emissions motor andphysical activity.
2) Personal mobility devices areallowed to be operated on thesame public infrastructure as
bikes or pedestrians.

HSIC
Industry
SectionHTranspor
tation,storage,postalandcourier
services

HSIC
Industry
Division(2 Digit)

50Watertransport

HSIC
Industry
Group (3Digit)

501-Crossborderwatertransport

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)
5013-Ship owners of sea-goingvessels(ISIC: 5011 - Sea and Coastal
501301:
Passenger Water Transport;
Ship owners
5012 - Sea and Coastal Freightof sea-going
Water Transport)
vessels for(NACE: 50.10 - Sea and coastal
passenger
passenger water transport; 50.20
transport- Sea and coastal freight waterTransportatiotransport)
n ofpassengers by
5014-Operators of sea-goingsea
vessels(ISIC: 5011 - Sea and Coastal
501401:
Passenger Water Transport;
Operators
5012 - Sea and Coastal Freightof sea-going
Water Transport)
vessels for(NACE: 50.10 - Sea and coastal
passenger
passenger water transport; 50.20
transport- Sea and coastal freight watertransport)
5013-Ship owners of sea-goingvessels(ISIC: 5011 - Sea and Coastal
Passenger Water Transport;
5012 - Sea and Coastal Freight
Water Transport)(NACE: 50.10 - Sea and coastal
passenger water transport; 50.20- Sea and coastal freight watertransport)

501302:
Ship ownersof sea-goingvessels for
freighttransport

Transportatio
n of freight bysea

Description

Transportation of passengers
by seaTransportation of freight bysea

12

Closest Taxonomy
Alignment

Climate Bonds
Criteria

Climate Bonds
Criteria

2. Key Metrics• Annual Efficiency Ratio(AER): The ratio of a
ship's carbon emissions
per actual capacitydistance (e.g.,
deadweight tonnage pernautical mile (dwt-nm),
which is a measure of aship’s weight carrying
capacity (not including
the empty weight of theship) x distance.
• Energy Efficiency
Operational Indicator(EEOI): The total
operational emissions tosatisfy transport work
demanded, this is usuallyquantified over a periodof time which
encompasses multiple
voyages (e.g. a year). The
ratio of a ship's carbon
emissions per unit oftransport work (e.g.,Tonne-nm (t-nm) is ameasure of useful work
done and is calculated as
deadweight carried X
distance).
• Dry bulk by tonnes

3. Substantial Contribution
Criteria

Please refer to activity card forthe full criteria.
1) The ship must report an
operational emissions intensity(using AER or EEOI) according to
the criteria table below.
Compliance can be reported byeither AER or EEOI for a specifictimeframe. For passenger
vessels the denominator is GTnm (gross tonne- nautical mile).

Please refer to activity card forthe full criteria.
1) The ship must report an
operational emissions intensity(using AER or EEOI) according to
the criteria table below.
Compliance can be reported byeither AER or EEOI. For freight,
the denominator is tnm (tonnenautical mile)2) Excluded assets:

HSIC
Industry
Section

HSIC
Industry
Division(2 Digit)

HSIC
Industry
Group (3Digit)

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)

5014-Operators of sea-goingvessels(ISIC: 5011 - Sea and Coastal
Passenger Water Transport;
5012 - Sea and Coastal Freight
Water Transport)(NACE: 50.10 - Sea and coastal
passenger water transport; 50.20- Sea and coastal freight watertransport)

Description

Closest Taxonomy
Alignment

2. Key Metrics

carried (Tonnes)• Volume of coaltransported (Tonnes)
501402:
Operatorsof sea-goingvessels for
freighttransport

3. Substantial Contribution
Criteria• Crude oil tankers and liquefied
gas tankers• Dry bulk carriers IF
transporting more than 20% of
fossil fuels annually• Assets used for the
exploration or production offossil fuels (floating production,
supply and offloading (FPSO)
vessels; subsea, umbilicals,
risers, flowlines (SURF) vessels;
drilling units; platform supply
vessels; well intervention
vessels.

Please refer to activity card forthe full criteria.
EWater
Supply;Sewerage, WasteManagement
AndRemediation
Activities

37 Sewerage

370 Sewerage

3700 – Sewerage(ISIC: 3700 - Sewerage)(NACE: 37.00 - Sewerage)

370000
Sewerage

Sewage sludge
treatment –anaerobic
digestion or
co-digestion

Construction and operationof facilities for the treatment
of sewage sludge byanaerobic digestion or codigestion with the resulting
production and utilization of
biogas or chemicals.

13

CGT E1.1 Sewage
sludge treatment –anaerobic
digestion

No specific quantifiable
metrics

1) A monitoring and contingency
plan is in place in order tominimise methane leakage at
the facility.
2) The majority of the produced
biogas is used directly for thegeneration of electricity or heat,or injection into the city gas
network, or used as vehicle fuelor as fuel/ feedstock in city gas
production. In the unlikely eventof equipment breakdown,
unconsumed biogas will besafely flared.

HSIC
Industry
Section

HSIC
Industry
Division(2 Digit)
38Wastecollection,
treatment anddisposal
activities;
materials
recovery

HSIC
Industry
Group (3Digit)

381-Wastecollection

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)

3811-Collection of nonhazardous waste(ISIC: 3811 - Collection of NonHazardous Waste)(NACE: 38.11 - Collection of nonhazardous waste)

381100
Collectionof nonhazardous
waste

Collection andtransport ofnonhazardous
waste insourcesegregatedfractions

Description

Closest Taxonomy
Alignment

2. Key Metrics

3. Substantial Contribution
Criteria
Please refer to activity card forthe full criteria.

Collection and transport ofnon-hazardous waste insource segregated fractions

14

CGT E2.1Collection
and transport ofnon-hazardous
waste in source
segregatedfractions

No specific quantifiable
metrics

1) All separately collected andtransported non-hazardous
waste that is segregated atsource is intended for
preparation for reuse or
recycling operations.

HSIC
Industry
Section

HSIC
Industry
Division(2 Digit)

HSIC
Industry
Group (3Digit)

1. Taxonomy Activities and Mapping
HSIC
HSIC Industry Class (4 digit)
Industry
Taxonomy(Corresponding ISIC / NACE)
Sub-class (6level activity
Digit)

Description

Closest Taxonomy
Alignment

2. Key Metrics

3. Substantial Contribution
Criteria
Please refer to activity card forthe full criteria.

EWater
Supply;Sewerage, WasteManagement
AndRemediation
Activities

38Wastecollection,
treatment anddisposal
activities;
materials
recovery

382-Waste
treatment
anddisposal

3821-Treatment and disposal of
non-hazardous waste(ISIC: 3821 - Treatment andDisposal Of Non-Hazardous
Waste)(NACE: 38.21 - Treatment anddisposal of non-hazardous
waste)

382100Treatment
anddisposal of
nonhazardous
waste

Utilization/
treatment ofdomestic
waste –
anaerobic
digestion or
co-digestion

Construction and operationof dedicated facilities for thetreatment of separately
collected bio-waste throughanaerobic digestion or codigestion with the resulting
production and utilisation of
biogas and digestate and/or
chemicals.

15

CGT E2.4
Utilization/
treatment ofdomestic waste –anaerobic
digestion• % of food and feedcrops used as feedstock

1) A monitoring and contingency
plan is in place in order tominimise methane leakage at
the facility.
2) The majority of the produced
biogas is used directly for thegeneration of electricity or heat,or injection into the city gas
network, or used as vehicle fuelor as fuel/ feedstock in city gas
production. In the unlikely eventof equipment breakdown,
unconsumed biogas will besafely flared.
3) The bio-waste that is used for
anaerobic digestion or codigestion is source segregatedand collected separately
4) The produced digestate isused as fertiliser or soil
improver.
5) Food and feed crops used as
input feedstock, measured inweight, as an annual average, isless than or equal to 10% of the
input feedstock.

3. Sectors in the Hong Kong Taxonomy
This section sets out the “activity cards” for activities covered in the Hong Kong Taxonomy. They
facilitate the use of the Hong Kong Taxonomy and its regular updates due to developments in climate
science. Each card contains a detailed description of one or more activities depending on whether
metrics, criteria and thresholds for these activities are similar in nature (e.g. different kinds ofrenewable energy) or must be viewed together because they are interconnected in the real economy.
In most cases, one activity card covers several activities with identical sectoral affiliation (e.g. sewage
sludge treatment (1 activity), waste collection, treatment and recycling (2 activities), water transport(2 activities) etc).
Structurally, this section consists of the following subsections:●

Sector overview. This subsection describes how the sector operates in Hong Kong, its shareof emissions, what technology is used, what kind of economic agents are involved in the sector(municipality or private companies), what the most pressing problems present in the sector
are, and how this sector can be broken down for the purpose of its taxonomical classification.

●

Metrics. This subsection describes in detail what kind of metrics are going to be used to define
criteria and thresholds and why, including the units of measurement and justification for theiruse.

●

Criteria and thresholds. This subsection identifies the specific criteria and thresholds for eachactivity and provides a justification in terms of scientific rigour, applicability in the local
context, and consistency with other taxonomies.
o Main criteria are the criteria taken from the CGT to the extent practicable. In mostcases, the same criteria exist in both EU and Mainland China taxonomies and use
universal metrics that do not require further adjustment. Hence, they should beapplied regardless of the jurisdiction where the project is executed.
oAdditional criteria are primarily those considered more stringent and/or detailed forspecific markets by the CGT. These criteria are only relevant when the project is
executed in the jurisdiction mentioned in the criterion.

●

Activity card. This subsection contains the final product that constitutes the “body” of thetaxonomy as seen by the end user. In most cases, it contains all information needed to use
the Taxonomy in practice.

●

Additional information (where applicable). This subsection provides more detailed
information about the selection and formulation of metrics and technical screening criteria.

16Figure 1. Activity card parts and description

17

3.1.

Sector: Electricity, Gas, Steam and Air Conditioning Supply

3.1.1. Electric power generation, transmission and distribution
Overview
Hong Kong is determined to achieve carbon neutrality before 2050.
In the 2021 policy address, the Chief Executive, called on the power companies to phase down coalfired generation units and replace the use of coal with other alternatives such as natural gas andrenewable energy for electricity generation. She reaffirmed the government's efforts to grapple with
Hong Kong’s geographical and environmental constraints in driving the development of renewableenergy and strive to increase its share in the fuel mix for electricity generation through facilitating
local projects, regional collaboration and joint ventures4.
Hong Kong’s power sector accounted for approximately 63%, or 21.0 MtCO2e of Hong Kong’s total
GHG emissions in 20225. Hong Kong’s electricity consumption was 44.1TWh in 2020, a slight decrease
from 2019 levels due to the COVID-19 pandemic. In the past 20 years, growth in electricity demandhas slowed. Per capita electricity consumption peaked in 2014, the same year that total GHG emissions
peaked.
In order to reach net-zero electricity generation, Hong Kong's Climate Action Plan 2050 aims to cease
the use of coal for daily electricity generation; increase the share of renewable energy in the fuel mix
for electricity generation to 7.5% to 10% by 2035, and to 15% subsequently; and to trial the use of
new energy and strengthen co-operation with neighbouring regions to achieve the long-term targetof net-zero electricity generation before 20506.
The objective of the following energy sector criteria is to provide clear guidance on certain
technologies, assets and investments that will provide a substantial contribution to climate change
mitigation in the context of Hong Kong’s decarbonisation objectives. The criteria will potentiallyexpand to include more technologies (such as ocean tidal, geothermal, hydropower and bioenergy)
taking into account whether they could meet the overarching emissions intensity threshold, and othercritical factors throughout the construction and operation of these energy systems which may increase
the level of uncertainty regarding their emissions intensities.

Metrics●

gCO2/kWh

To be consistent with other global taxonomies including the EU Taxonomy, the primary metric formeasuring emissions in the energy sector is gCO2/kWh as this directly reflects the emissions intensity
for electricity generation, which is the major source of emissions from the energy sector. The metricis based on life cycle emissions to account for GHG emissions throughout the value chain of energy
production processes (e.g., electricity generation from natural gas can have significantly large
emissions due to methane leakage during extraction, transportation and distribution in addition to4

https://www.policyaddress.gov.hk/2021/eng/p95.html
https://cnsd.gov.hk/en/climate-ready/ghg-emissions-and-trends/
6
https://www.info.gov.hk/gia/general/202110/08/P2021100800588.htm
518

combustion. Hence, a lifecycle-based threshold is useful to assess the level of GHG emissions during
the entire supply chain and not just during combustion).
Criteria and thresholds●

Lifecycle emissions from generation must not exceed 100gCo2e/kWh

A 100gCo2e/kWh threshold applies across all technology types within the electricity generation sector,
declining to net zero by 2050. This reflects international best practice and is aligned with the EU
Taxonomy criteria.
Automatic eligibility is available for renewable energy technologies which are well recognised to haveemissions intensities below this threshold and this helps to ease the process of operationalising thepresent Hong Kong Taxonomy by allowing activities conducted by technologies which are indisputably“green” to be considered eligible – for example, there is unanimous consent that renewable energy
technologies such as solar photovoltaic or wind power are technologies which perform well below the
100gCo2e/kWh threshold and, therefore, can be considered to provide a substantial contribution toclimate change mitigation.
Consequently, to facilitate the use of the Hong Kong Taxonomy, issuers who are committed to using
the proceeds of a bond to finance such technologies need not conduct a lifecycle assessment of theirsolar or wind asset. However, it is noted that in the CGT there are instances where additional
technology-specific criteria apply. For example, although solar photovoltaic technologies are wellrecognised to have lifecycle emissions well below the 100gCo2e/kWh threshold, they are also subject
to additional requirements regarding factors such as conversion efficiency. These are aligned with the
PBOC Green Bond Endorsed Project Catalogue and are designed to help encourage innovation acrossthe technology segment.
It is noted that the Hong Kong Taxonomy should be a “living” document. The threshold and respective
eligibility mentioned above should be reviewed and updated as the 100gCo2e/kWh threshold declines
to 0gCo2e/kWh by 2050. Similarly, there may be opportunities to introduce additional criteria topromote the continued improvement of renewable energy technologies. For example, the Guobiao
and the International Electrotechnical Commission Standards for Certification of Crystalline
Photovoltaic (PV) Modules could be considered in future iterations of the Taxonomy.
Unless otherwise stated, the Lifecycle analysis of GHG emissions should be calculated based on
project-specific data, where available, using ISO 14067:2018 or ISO 14064-1:2018, or by using theEuropean Commission Recommendation 2013/179/EU, and verified by an independent third party.

19

Activity cards
Electricity generation using concentrated solar power technology
SectorActivity Category
Activity
Description

Electricity, gas, steam and air conditioning supply
Electric power generation, transmission and distribution
Electricity generation using concentrated solar power (CSP) technology.
Construction and operation of facilities using solar thermal power to generate
electricity
ClosestHSIC 351000
CGT
D1.2 Electricity Corresponding
3510
Code
Code
generation using ISIC Codeconcentrated
solar
power
(CSP)
technology
ClosestEU 4.2
Electricity Closest Chinese Green 3.2.2.2 Construction andTaxonomy Code generation using Bond Endorsed Projects operation of solar energy
concentrated
Catalogue Codes
utilisation facilities
solar power (CSP)
technology
HSIC Description Operation of generation facilities that produce electric energy; including thermal,
nuclear, hydroelectric, gas turbine, diesel and renewable
Criteria and Thresholds
Main Criteria
Automatically eligible if Use of Proceeds comply with activity description
Additional
None
Requirements
and Comments

Electricity generation using solar photovoltaic technology
SectorActivity Category
Activity
Description
Closest HSIC CodeElectricity, gas, steam and air conditioning supply
Electric power generation, transmission and distribution
Construction or operation of electricity generation facilities that produce
electricity using solar photovoltaic (PV) technology
351000CGT Code D1.1 Electricity Corresponding ISIC 3510
generation
Code
using
solar
photovoltaic
technology
ClosestEU 4.1 Electricity Closest Chinese Green 3.2.2.2
Construction
andTaxonomy Codegeneration
Bond Endorsed Projects Operation of Solar Energy
using solar Catalogue Codes
Utilisation Facilities
photovoltaic
technology
HSIC Description Operation of generation facilities that produce electric energy; including
thermal, nuclear, hydroelectric, gas turbine, diesel and renewable
Criteria and Thresholds
Main Criteria
1. The minimum photoelectric conversion efficiency of polycrystalline
silicon cells and monocrystalline silicon cells shall not be less than 19%
and 21% respectively;
20

Additional
Requirements
and Comments

2. The minimum photoelectric conversion efficiency of polycrystalline
silicon cell modules and single crystal silicon battery modules shall not
be less than 17% and 17.8% respectively;
3. The minimum photoelectric conversion efficiency of silicon-based,
CIGS, CdTe and other thin-film battery modules shall not be less than
12%, 14%, 14%, 12%;
4. The decay rates of polycrystalline silicon battery modules andmonocrystalline silicon battery modules shall not be higher than 2.5%
and 3% in the first year, and not higher than 0.7% per year, and nothigher than 20% within the period of 25 years; the attenuation rate ofthin-film battery module shall not be more than 5% in the first year,
no more than 0.4% per year in the following year, no more than 15%
within the period of 25 years.
None

Electricity generation from wind power
SectorActivity Category
Activity
Description
Closest HSIC CodeElectricity, gas, steam and air conditioning supply
Electric power generation, transmission and distribution
Construction or operation of electricity generation facilities that produce
electricity from wind power
351000CGT CodeD1.3
Corresponding
3510
Electricity
ISIC Codegenerationfrom wind
power
ClosestEU 4.3 Electricity Closest Chinese Green 3.2.2.1 Construction andTaxonomy Codegeneration
Bond Endorsed Projects Operation of Wind Generators
fromwind Catalogue Codes
power
HSIC Description Operation of generation facilities that produce electric energy; including
thermal, nuclear, hydroelectric, gas turbine, diesel and renewable
Criteria and Thresholds
Main Criteria
Automatically eligible if Use of Proceeds comply with activity description
Additional
None
Requirements
and Comments

21

3.2.

Sector: Transportation and Storage

3.2.1. Land transport including railways
Overview
To ensure sustainable development and effective utilisation of limited road resources, Hong Kong has
adhered to a public transport-oriented policy whilst upgrading its transport infrastructure and services
for private mobility. Hong Kong has a diverse and highly efficient multi-modal public transport systemwith railways acting as the backbone, complemented by other services including franchised buses,
public light buses, taxis, non-franchised buses, tram, and ferry services. Over 11 million passenger trips
are made through Hong Kong’s public transport every day, which is estimated to account for 90% ofdaily trips in the city, a proportion that is amongst the highest in the world.
Hong Kong’s transport sector accounted for approximately 19 %, or 6.4 MtCO2e of Hong Kong’s total
GHG emissions in 2022.7 Road transport (motor vehicles) is the largest source accounting for 87% of
GHG emissions within the transport sector. As of 20198, private cars account for the highest share of
the motor vehicle fleet, but freight vehicles represented the largest share of emissions, contributing
6% of Hong Kong’s total GHG emissions, followed by private cars (4.5%), buses (3.6%), and taxis(1.9%).9As per Hong Kong’s Climate Action Plan 2050, the goal for the transport sector is to achieve zerovehicular emissions before 2050. This would require strengthening the public transport system andspecifically promoting vehicle (and ferry) electrification. Seeing this as their primary goal, the Hong
Kong government aims to cease registration of new internal combustion engine-based and hybrid
private cars (including plug-in hybrid electric vehicles) by 2035 or earlier. It actively promotes electricvehicles at a large scale for commercial purposes and testing out hydrogen fuel cell bus and heavy
vehicles.10
In this context and driven by various government policies, the proportion of electric private cars has
increased rapidly in recent years. In 2023, the number of newly registered electric private cars was
28,500, accounting for 65% of all newly registered private cars. The government will announce aroadmap for the promotion of new energy public transport and commercial vehicles in 2025. The
government also targets to introduce about 700 electric buses and 3,000 electric taxis by end-2027.

Metrics●●●

CO2e emissions per passenger kilometre (gCO2e/pkm);
CO2e emissions per vehicle kilometre (gCO2e/vkm);
CO2e emissions per tonne kilometre (gCO2e/tkm).

7https://cnsd.gov.hk/en/climate-ready/ghg-emissions-and-trends/
The data and figures refer to years before the COVID-19 pandemic because the years 2020, 2021 and 2022
are not representative of the status of the transport sector as economic activity decreased markedly.
9
https://www.legco.gov.hk/research-publications/english/2022issh03-decarbonization-strategy-in-hong-kong20220210-e.pdf
10
https://civic-exchange.org/wp-content/uploads/2022/10/HK-transport-report_-Final.pdf
822

As in other international taxonomies, the transport sector criteria require that operated fleets tobecome more efficient over time by linking eligibility to emissions performance below a certain
threshold set to ensure substantially reduced emissions. Emission reduction thresholds are based on
performance metrics (vehicle km, passenger km or tonne km).

Criteria and thresholds
Construction and operation of public transportation system in urban and rural areas
The type of infrastructure available in a specific country or jurisdiction is a crucial element of transport
behaviour and choice. Transport investments decided by governments can therefore lock in a highcarbon transport future when the projects and assets invested in are not aligned with a low-carbon
future. In this context, the setting of the criteria for this activity was inspired by long term strategic
vision of decarbonisation of the transport sector, as per Hong Kong’s Climate Action Plan 2050 wherein
the goal for the transport sector is to achieve zero vehicular emissions before 2050.
In line with other taxonomies at the international level (such as the EU, Thailand, Colombia, and South
Africa), certain transport modes, such as electrified rail transport, are already associated withrelatively low-carbon emissions whilst electric vehicles and hydrogen vehicles are singled out as
eligible assets as they are a clear part of the low carbon transport sector in 2050. The purpose of therationale is to provide a clear signal to the market and ease for issuers that are keen to finance suchprojects both in Hong Kong and other jurisdictions.
Description and scope:
Purchase, financing, leasing, rental and operation of urban and suburban transport vehicles forpassengers and road passenger transport. This includes construction and operation of subways, lightrailways, tram, and other urban rail transportation facilities; construction and operation of highcapacity public transportation facilities, such as BRT bus stations, lines and other facilities construction
and operation; purchase of public transportation vehicles, etc.
●

The trains and passenger coaches have zero direct (tailpipe) CO2 emissions

The criteria ensure substantial GHG emission reduction by increasing the number of zero-emission
vehicles, improving the efficiency of the transport system in general.

Construction and operation of personal mobility devices, cycle logistics
The promotion of electric vehicles for personal mobility devices, transport devices and improving cycle
logistic is pivotal to achieve Hong Kong’s zero emission plan for the transport sector by 2050.
Considering this activity defines that the propulsion of personal mobility devices should come fromthe physical activity of the user, from a zero-emissions motor, or a mix of zero-emissions motor andphysical activity, the activity is automatically eligible. This aligns with other international taxonomies
wherein the operation of vehicles with zero tailpipe emissions, or close to zero tailpipe emissions, isautomatically eligible as it supports the decarbonisation of the transport sector. Furthermore, thisactivity also includes the promotion and use of hydrogen fuel cell vehicles.
Description and scope:23

Selling, purchasing, financing, leasing, renting and operation of personal mobility or transport devices
where the propulsion comes from the physical activity of the user, from a zero emissions motor, or a
mix of zero-emissions motor and physical activity. This specifically also includes:
-

-

-

●

Construction of urban walking and cycling transportation systems, including public bicycle
rental sites, non-motorised vehicle parking facilities, road crossing facilities and other slowmoving urban systems
Construction and operation of shared transportation infrastructure, such as systems for public
rental bicycles, online bicycle rental, online electric bicycle rental, online car rental, carsharing, parking facilities and equipment, and bicycle parking facilities
The provision of freight transport services by (cargo) bicycles
Selling, purchasing, financing, leasing, renting and operation of private electric or hydrogenvehiclesThe propulsion of personal mobility devices comes from the physical activity of the user,from a zero-emissions motor, or a mix of zero-emissions motor and physical activity

The criteria specify the propulsion methods of personal mobility device to ensure zero GHG emission.
●

The personal mobility devices are allowed to be operated on the same public infrastructure
as bikes or pedestrians

The criteria promote green transportation by allowing zero-emission personal mobility devices toshare public infrastructure with bikes and pedestrians.
Activity cards
Construction and operation of public transportation system in urban and rural areas
SectorActivity Category
Activity
Description

Closest HSIC
Code

Closest EU
Taxonomy CodeHSIC Description

Transportation and Storage
Land transport including railways
Purchase, financing, leasing, rental and operation of urban and suburban
transport vehicles for passengers and road passenger transport. This includes
construction and operation of subways, light railways, tram, and other urban railtransportation facilities; construction and operation of high-capacity public
transportation facilities, such as BRT bus stations, lines and other facilities
construction and operation; purchase of public transportation vehicles, etc.
491000CGT H1.1. Construction
Corresponding 4921
492100Code and operation of
ISIC Code4922
492300public transportation
492400system in urban and492500rural areas
6.3 Urban andClosest Chinese Green Bond 5.5.1.5 Construction andsuburban transport, Endorsed Projects Catalogue operation of publicroad passenger
Codes
transportation system intransport
urban and rural areas
491000: Railway and cable transport
492100: Public bus services
492300: Non-scheduled public light bus services
492400: Scheduled public light bus services
492500: School bus services
24

Main Criteria
Additional
Requirements
and Comments

Criteria and Thresholds
The trains and passenger coaches have zero direct (tailpipe) CO2 emissions
Specific criteria for projects in the EU to align with EU Taxonomy:
Other fleets/trains are eligible if direct emissions are below 50 gCO2e/pkm until
2025 (non-eligible thereafter). The threshold of 50 gCO2e/pkm until 2025
ensures that the carbon intensity remains similar to criteria for eligible roadvehicles with low occupation factor (50 gCO2/vkm) and significantly lower thanemissions for an average car.

Construction and operation of personal mobility devices, cycle logistics
SectorActivity Category
Activity
Description

Transportation and Storage
Land transport including railways
Selling, purchasing, financing, leasing, renting and operation of personal
mobility or transport devices where the propulsion comes from the physicalactivity of the user, from a zero emissions motor, or a mix of zero-emissions
motor and physical activity. This specifically also includes:- Construction of urban walking and cycling transportation systems,
including public bicycle rental sites, non-motorised vehicle parking
facilities, road crossing facilities and other slow-moving urban systems- Construction and operation of shared transportation infrastructure,such as systems for public rental bicycles, online bicycle rental, online
electric bicycle rental, online car rental, car sharing, parking facilities
and equipment, and bicycle parking facilities- The provision of freight transport services by (cargo) bicycles- Selling, purchasing, financing, leasing, renting and operation of private
electric or hydrogen vehicles

Closest HSIC
Code

499000

Closest EU
Taxonomy Code

6.4 Operationof personal
mobility
devices, cycle
logistics

HSIC Description

499000: Other land transport services
Criteria and Thresholds
 The propulsion of personal mobility devices comes from the physicalactivity of the user, from a zero-emissions motor, or a mix of zeroemissions motor and physical activity
 The personal mobility devices are allowed to be operated on the same
public infrastructure as bikes or pedestrians
None

Main Criteria

Additional
Requirementsand Сomments

CGT Code

H1.5. Construction
and operation of
personal mobility
devices, cycle
logistics
Closest Chinese Green Bond
Endorsed Projects Catalogue
Codes

25

Corresponding 4922
ISIC Code5.5.1.6 Construction andoperation of facilities forshared transport
5.5.1.4 Construction andoperation of slow modetransportation system

3.2.2. Water Transport
Overview
Maritime transport currently accounts for over 80% of global trade by volume whilst in 2022,
international seaborne trade volume reached 12.0 billion tonnes. The UN Conference on Trade andDevelopment is forecasting an average growth rate of 2.1% for seaborne trade during the period of2024-2028. Hong Kong is one of the major ports in Asia and has a unique opportunity to facilitate thefinancing of transport operations and infrastructure.
While CO₂ represented almost all of the industry’s GHG emissions (98%), methane (CH₄) emissions
from ships have recently increased due to the methane slip associated with increased use andtransport of liquefied natural gas (LNG) in LNG carriers and other LNG-propelled ships. There ispotential for this trend to continue in the future if there is an increased uptake of LNG-powered ships.
However, there is potential for the sector to make significant GHG reductions. These can be achieved
through a combination of increasing the energy efficiency of shipping and reducing the GHG intensityof the energy used by ships.
According to the International Maritime Organisation (IMO), the shipping industry’s governing body,the sector currently accounts for 2.2% of global emissions. If left unchecked, shipping emissions are
expected to grow by 50-250% by 2050.
Metrics
The shipping criteria are designed to apply to a wide range of ships, provided that issuers are able toprovide either the Energy Efficiency Operation Index (EEOI) or Annual Efficiency Ratio (AER) data ofthe vessels. Specifically, issuers are required to submit information reported on an annual basis of
their achieved EEOI or AER, alongside documentation that the data has been submitted to the IMO
Ship Fuel Oil Consumption Database and verified under the mandatory reporting framework using the
IMO Data Collection System. The use of such pre-existing systems also ensures that no additional datacollection burden should be required.
●

AER:

-

The ratio of a ship's carbon emissions per actual capacity-distance (e.g., dwt x nm sailed).
Assumes ships are fully loaded on all miles travelled during the year. In practice, ships are notalways fully loaded and many ships (e.g., tankers and bulkers) operate with ballast voyages
where for several voyages a year they have no cargo.

●
-

EEOI:
The total operational emissions to satisfy transport work demanded, usually quantified overa period which encompasses multiple voyages (e.g. a year). The ratio of a ship's carbon
emissions per unit of transport work (e.g. cargo x nm sailed).
Considered the ultimate measurement of a ship’s estimated “real-world” efficiency in that it
incorporates all of the components listed above, emissions when the ship is in port/anchor,
etc. This also requires that operators and owners provide a vessel’s bills of lading, to increasetransparency regarding the precise emissions-intensity/per unit of cargo transported.

-

26

Criteria and thresholds
The utilisation of EEOI and AER metrics and a 2020-2050 declining threshold are derived from the
Climate Bonds Shipping Criteria which are in turn based on IMO Secretariat’s Third IMO GHG Study,
published in 2014. The Third IMO GHG Study contains a dataset estimating the average operationalemissions intensities of different ship types and sizes between 2010 and 2012. From this data, thecriteria calculate the decarbonisation trajectories for each size and class of ship, adopting a linear
threshold to net zero by 2050. These thresholds will be updated regularly.
For example, in any given year the AER emissions intensity is =At any given year, a ship must be operating at the corresponding emissions intensity for that year.
Ships remain compliant provided they are able to operate below the threshold.
While the Fourth IMO GHG Study was published in July 2020, the criteria below still reference theThird IMO GHG Study, in line with Climate Bonds. With that in mind, these estimated emissions
intensities can be continuously updated as the average emissions of the global fleet changes overtime.
Activity cards
Transportation of freight by sea
SectorActivity
Category
Activity
Description
Closest HSIC
Code
Closest EU
Taxonomy
Code
HSIC
Description

Transportation and Storage
Water transport
Transportation of freight by sea
501302CGT None
Corresponding 5012
501402
Code
ISIC Code5022
6.10 Sea and coastal freight
Closest ChineseNonewater transport, vessels forGreen Bond
port operations and auxiliary Endorsed Projects
activities
Catalogue Codes
501302:● Freight transport by own sea-going vessels● Chartering of own sea-going vessels with crews (i.e. on a full basis) to otheroperators for freight transport● Renting of own sea-going vessels without crews (i.e. on a bare vessel basis)to other operators for freight transport
501402:● Operation of sea-going freight vessels rented or chartered from others.
● Re-renting out sea-going freight vessels, which are rented or charted fromothers to third party operators.
Criteria and Thresholds
27

Main
Criteria

In order to be compliant with the criteria the ship must report an operational emissions
intensity (using AER or EEOI) according to the criteria table below.
Compliance can be reported by either AER or EEOI. For freight the denominator is tnm(tonne-nautical mile)Type

Bulk carrier

ChemicaltankerContainer

Generalcargo
Other liquidtankerRefrigerated
bulk
Ro-Ro

Size (GT)0-999910000-34999
35000-59999
60000-99999
100000-199999
200000-+0-49995000-9999
10000-19999
20000-+
0-999
1000-1999
2000-2999
3000-4999
5000-7999
8000-11999
12000-14500
14500-+
0-49995000-9999
10000-+
0-+0-19990-49992020
AER/EEOI

2030
AER/EEOI

2040
AER/EEOI

35.1 / 24.6
12.2 / 6.6
9.2 / 4.6
8.4 / 3.6
4.6 / 2.4
4.1 / 2.3
40.3 / 35.4
26.6 / 19
18.7 / 11.9
12.3 / 6.5
27.3 / 16.9
24.9 / 14.8
19.5 / 10
16.8 / 8.3
16.2 / 7.8
14.1 / 6.7
10.4 / 4.6
10.4 / 4.6
30.2 / 24.2
27.2 / 16.7
24.2 / 13.1
106.6/
97.6

23.4 / 16.4
8.1 / 4.4
6.2 / 3.1
5.6 / 2.4
3.1 / 1.6
2.7 / 1.5
26.8 / 23.6
17.7 / 12.7
12.5 / 7.9
8.2 / 4.3
18.2 / 11.3
16.6 / 9.9
13 / 6.7
11.2 / 5.5
10.8 / 5.2
9.4 / 4.5
6.9 / 3.1
6.9 / 3.1
20.1 / 16.1
18.2 / 11.1
16.2 / 8.8

11.7 / 8.2
4.1 / 2.2
3.1 / 1.5
2.8 / 1.2
1.5 / 0.8
1.4 / 0.8
13.4 / 11.8
8.9 / 6.3
6.2 / 44.1 / 2.2
9.1 / 5.6
8.3 / 4.9
6.5 / 3.3
5.6 / 2.8
5.4 / 2.6
4.7 / 2.2
3.5 / 1.5
3.5 / 1.5
10.1 / 8.1
9.1 / 5.6
8.1 / 4.4

2050
AER/EEO
I
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

71.1 / 65.1

35.5 / 32.5

072.8 / 48.7

48.5 / 32.5

24.3 / 16.2

0258.2 /
212.4
63.9 / 45.9
124.7 / 46
58.1 / 13.8

172.1 /
141.6
42.6 / 30.6
83.2 / 30.7
38.7 / 9.2

86.1 / 70.8

05000-+
21.3 / 15.3
00-399941.6 / 15.3
0Vehicle4000-+
19.4 / 4.6
0Additional
Excluded assets:
Requirements● Crude oil tankers, liquefied gas tankers and any other vessels that are
anddedicated to the transport or production of fossil fuels, including:Comments- Dry bulk carriers IF transporting more than 20% of fossil fuels annually- Assets used for the exploration or production of fossil fuels (floatingproduction, supply and offloading (FPSO) vessels; subsea, umbilicals,
risers, flowlines (SURF) vessels; drilling units; platform supply vessels; wellintervention vessels.

28

Transportation of passengers by sea
SectorActivity
Category
Activity
Description
HSIC Code
Closest EU
Taxonomy
Code
HSIC
Description

Main Criteria

Additional
Requirements

Transportation and Storage
Water transport
Transportation of passengers by sea
501301CGT Code
None
Corresponding
5011
501401ISIC Code5011
6.11 Sea andClosest Chinese Green
None
coastalBond Endorsed Projects
passenger water Catalogue Codestransport
501301:
 Passenger transport by own sea-going vessels
 Chartering of own sea-going vessels with crews (i.e., on a full basis) toother operators for passenger transport
 Renting of own sea-going vessels without crews (i.e., on a bare vessel
basis) to other operators for passenger transport
501401:
 Operators of sea-going passenger vessels, rented or chartered fromothers Re-renting out sea-going passenger vessels, which are rented or charted
from others to third party operators
Criteria and Thresholds
In order to be compliant with criteria, the ship must report an operationalemissions intensity (using AER or EEOI) according to the criteria table below.
Compliance can be reported by either AER or EEOI for a specific timeframe. For
passenger vessels the denominator is GT-nm (gross tonne- nautical mile).
2020
2030
2040
2050
Type
Size (GT)AER / EEOI AER / EEOI AER / EEOIAER / EEOI
Ferry0-1999
1272135.8 848090.5
424045.3
0
pax
only*
2000-+
1740606.6 1160404.4 580202.2
00-19992044403.4 1362935.6 681467.8
02000-9999 1286641.3 857760.8
428880.4
01000059999
1495064.7 996709.8
498354.90600001738613.6 1159075.7 579537.9
0Cruise* 99999
100000-+1337274.9 891516.6
445758.3
00-1999822123.9548082.6
274041.3
0
FerryRoPax*
2000-+
1137003.8 758002.5
379001.3
0Excluded assets:

29

and
Comments

Vessels built or operated for the sole purpose of transporting passengers to-andfrom assets or infrastructure that are dedicated to the production or transport offossil fuels.

Additional Information
The criteria presented leverage the CBT criteria, whereby vessels must be compliant with the declining
emissions intensity threshold in each year of operation. This can be proven through annual reporting.
It should also be noted that:●

The criteria for a low-carbon vessel are categorised according to the size and class of ship,
taking the average emissions for that segment and providing a linear threshold to zero by
2050.

The AER measures carbon emissions associated with transport work, but it uses a ship’s size
(deadweight) as a proxy for cargo carried. This does not provide an apple-to-apple comparison
between two ships which carry different cargo amounts. Cargo influences the numerator (carbon
emissions) because a ship which carries a larger cargo requires more energy for propulsion and thedenominator (transport work is a function of cargo carried and distance). Because ships are nottypically fully utilised, the AER would overestimate the efficiency of the ship. The IMO’s Data Collection
System will require data to be collected (e.g. fuel consumption, distance sailed and DWT) for all ships
5000 DWT and will enable the calculation of AER.
Efficiency metrics (gCO₂/tonne-nm) allow for an apple-to-apple comparison between two vessels
which cargo movements produce different levels of transport work. They also enable the tracking of
progress over time and comparison across different shipping fleets, companies, and different modesof transport. The carbon intensity of a ship in real operating conditions is known as the EEOI. It is themetric adopted by the IMO and represents the CO₂ emitted per tonne nautical mile for a voyage or
specific time period. It can either be calculated from fuel consumption measurements and information
on cargo carried and distance travelled or estimated using satellite tracking data and fleet technicalspecifications.
EEOI therefore accounts for the real operating conditions of the vessel and their impact on fuelconsumption (e.g. speed, weather, draught) and is therefore a more accurate representation of theCO₂ efficiency than if the efficiency were estimated in the vessel’s designed (or optimal operating)condition as is done by the EEDI or Existing Vessel Design Index (EVDI). The as-designed efficiency
assumes that a ship operates in its designed speed (often above the actual ship speed) in ideal weather
conditions and is fully loaded.
The EEOI is influenced by speed, utilisation and a ship’s technical efficiency. Increasing the energy
efficiency of a ship lowers the EEOI, controlling for all other factors. In practice however, there could
be rebound effects as a result of the lower marginal operating cost from the technical efficiency
improvement. If the ship is operating on zero emissions fuels, this rebound effect is no longer an issue.

30

3.3.

Sector: Water Supply; Sewerage, Waste Management and Remediation
Activities

3.3.1. Sewage sludge treatment
Overview
In Hong Kong, more than 94% of the population is served by the public sewerage system, with its
sewerage network of about 2,000 kilometres and around 330 sewage pumping stations and sewage
treatment plants collecting and treating 2.8 million cubic metres of sewage per day. On average, thesystem treats a little over 1 billion cubic metres of sewage per year, of which 80.3% undergo chemicallyenhanced primary treatment (CEPT), and 19.3% secondary treatment. The remaining 0.4% undergo
preliminary, primary or tertiary treatment.
For the purpose of the current phase of development of the Hong Kong Taxonomy, the following
activities will be assessed:●

Sewage sludge treatment – anaerobic digestion including co-digestion

During anaerobic digestion and co-digestion, a by-product generated is biogas, which consists mainlyof methane and carbon dioxide (CO2). Methane is a much stronger absorber of the emitted thermal
infrared radiation in Earth’s atmosphere than CO2 and, therefore, in practice, this means that methane
is a much more powerful GHG with a warming potential 84-87 times higher than CO2 over the first 20
years after it reaches the atmosphere11.
As a consequence, even though CO2 has a longer-lasting effect, methane sets the pace for warming in
the near term and its current level of estimated anthropogenic emissions corresponds to a global
temperature increase of over 3 degrees by 2100 12 . Crucially, methane emissions have increased
drastically since 2007 and, in the longer term, their constant increase may be the biggest threat to
keeping temperatures below the 2-degree scenario envisioned by the Paris Agreement and to avoid
the tipping point towards catastrophic climate change13 14.
Criteria and thresholds
Sewage sludge treatment – anaerobic digestion or co-digestion●

A monitoring and contingency plan is in place in order to minimise methane leakage at thefacility

The anaerobic digestion or co-digestion unit converts a certain class of waste into methane, adangerous greenhouse gas, with a much higher global warming potential than CO2. It is essential thatthe plant has all the necessary safety measures in place to prevent the possibility of any leakages.

11

https://www.iea.org/reports/methane-tracker-2021/methane-and-climate-change
https://essd.copernicus.org/articles/12/1561/2020/13
https://esd.copernicus.org/articles/12/601/2021/
14
https://www.ipcc.ch/sr15/chapter/chapter-3/
12

31

●

The majority of the produced biogas is used directly for the generation of electricity or
heat, or injection into the city gas network, or used as vehicle fuel or as fuel/ feedstock in
city gas production. In the unlikely event of equipment breakdown, unconsumed biogas
should be safely flared

Biogas that is produced as a result of anaerobic digestion or co-digestion is a renewable energy source
but has potential negative effects on climate and human health. Leakage risks also include explosion,
asphyxiation, and poisoning. Therefore, it is crucial to store and utilise it in the correct manner.

Activity cards
Sewage sludge treatment – anaerobic digestion or co-digestion
SectorActivity Category
Activity
Description
Activity Scope
Closest HSIC
Code

Closest EU
Taxonomy CodeHSIC Description
Main Criteria

Additional
Requirements
and Comments

Water supply; sewerage, waste management and remediation activities
Sewage sludge treatment
Construction and operation of facilities for the treatment of sewage sludge byanaerobic digestion or co-digestion with the resulting production and utilisationof biogas or chemicals.
Construction and operation
370000CGT Code E1.1 Sewage
Corresponding 3700
sludge treatment ISIC Code– anaerobic
digestion
5.6 Anaerobic
Closest Chinese Green Bond
1.5.3.3 Comprehensive
digestion ofEndorsed Projects Catalogue
utilisation of sludge fromsewage sludge Codes
urban sewage treatment
plantsSewage treatment
Criteria and Thresholds● A monitoring and contingency plan is in place in order to minimise
methane leakage at the facility● The majority of the produced biogas is used directly for the generation ofelectricity or heat, or injection into the city gas network, or used as
vehicle fuel or as fuel/feedstock in city gas production. In the unlikely
event of equipment breakdown, unconsumed biogas will be safely flared.
None

32

3.3.2. Waste Collection, Treatment and Recycling
Overview
Hong Kong is a densely populated area, so the issue of waste management is key to its sustainable
development. About 5.7 million tonnes of waste are disposed of at landfills each year, including
municipal solid waste (MSW), construction and demolition waste, chemical waste, and other special
waste (clinical waste, animal carcasses, livestock waste, waste tyres, and waterworks/sewage sludge).
Municipal solid waste accounts for 7% of the city’s GHG emissions15, with the major source beingorganic waste decomposition in landfills.
In 2022, the total quantity of MSW disposed to the landfills was 4.06 million tonnes (68% of the total),
which represented a decrease of 2.0% as compared to 2021. Discounting the factor of population
growth, the disposal rate of MSW was 1.51 kg/person/day, as compared to 1.53 kg/person/day in
202116. The major component of MSW is domestic waste. Its quantity of disposal was 2.48 million
tonnes in 2022, which has decreased by 2.8% as compared to 2021. On the other hand, the quantityof commercial and industrial (C&I) waste disposed of was 1.58 million tonnes in 2022, which has
decreased by 0.8% when compared to 2021. The overall MSW recovery rate in 2022 was 32% (1.91
million tonnes), which has increased from 31% in 2021.
Of the 11,128 tonnes of MSW landfilled daily in 2022, some 3,302 tonnes (30% of MSW) were foodwaste, which decreased by 3.9% as compared to 2021, whilst the second largest constituent of MSW
was waste plastics. Some 2,369 tonnes per day (tpd) (21% of MSW) were disposed in landfills in 2022,
which increased by 1.6% as compared to 2021. The third largest constituent of MSW was wastepaper,with a disposed quantity of 2,244 tpd (20% of MSW) in 2022, which has increased marginally by 0.4%
as compared to 2021.
Regarding construction waste, the quantity of waste generation dropped by about 3,100 tpd (6%) ascompared with 2021 to 49,865 tpd, among which 45,736 tpd of construction waste (92% of total) wererecovered either through transferring to projects for direct reuse or storing at public fill reception
facilities for reuse in the future. The remaining 4,128 tpd of construction waste (8% of total) was
disposed of at landfills, which was 483 tonnes more than that in 2021 and was on par with the level
before COVID-19. In the past decade, the recovery rate of construction materials has remained atabove 90% and was 92% in 2022.
Currently, most of the municipal solid waste in Hong Kong is disposed of in the following landfills:●●

West-New Territories (WENT)
North-East New Territories (NENT)

15

https://www.scmp.com/comment/letters/article/3167424/why-hong-kongs-landfill-problem-wont-besolved-waste-energy-plants
16

https://www.wastereduction.gov.hk/sites/default/files/resources_centre/waste_statistics/msw2022_eng.pdf

33

There are 13 closed landfills in Hong Kong and their restoration works were completed between 1997
and 2006 to minimise their potential adverse impacts to the environment and to render them safe forbeneficial use17. There are also nine recycling plants in Hong Kong working with different types ofwaste.
In February 2021, the Hong Kong government adopted a plan called Waste Blueprint for Hong Kong
203518, which indicates priorities for the upcoming decades. According to the plan, per capita MSW
disposal needs go down to 40-45% of the total, while recovery rate must go up to 55% in the medium
term. In the long term, the government plans to abandon landfills altogether.
For the purpose of the current phase of the Hong Kong Taxonomy development, two activities within
this sector will be addressed:●●

Collection and transport of non-hazardous waste in source segregated fractions
Utilisation/treatment of domestic waste – anaerobic digestion or co-digestion

During anaerobic digestion and co-digestion, a by-product generated is biogas, which consists mainlyof methane and CO2. Methane is a much stronger absorber of the emitted thermal infrared radiationin Earth’s atmosphere than CO2 and, therefore, in practice, this means that methane is a much more
powerful GHG with a warming potential 84-87 times higher than CO2 over the first 20 years after itreaches the atmosphere19.
As a consequence, even though CO2 has a longer-lasting effect, methane sets the pace for warmingin the near term and its current level of estimated anthropogenic emissions corresponds to a global
temperature increase of over 3 degrees by 210020.
Metrics●% of food and feed crops used as feedstock

Excessive utilisation of edible crops and food as a feedstock for producing bioenergy may lead to pricedistortion and negatively affect vulnerable population. Therefore, it is important to limit these kindsof feedstock and give preferences to non-edible types.

Criteria and thresholds
Collection and transport of non-hazardous waste in source segregated fractions
Description and scope:
Separate collection and transport of non-hazardous waste in single or comingled fractions aimed at
preparing for reuse or recycling.

17

https://www.gov.hk/en/residents/environment/waste/treatment/msw.htm
https://www.eeb.gov.hk/sites/default/files/pdf/waste_blueprint_2035_eng.pdf
19
https://www.iea.org/reports/methane-tracker-2021/methane-and-climate-change
20
https://essd.copernicus.org/articles/12/1561/2020/
18

34

●

All separately collected and transported non-hazardous waste that is segregated at source
is intended for preparation for reuse or recycling operations

Waste that is destined for recycling plants should be collected from segregated sources in order toavoid contamination with non-recyclable waste. More specifically, if contaminated with nonrecyclable materials and biowaste, the feedstock might not be able to be used in the recycling plantand, hence, it might need to be landfilled or incinerated.

Utilisation/ treatment of domestic waste – anaerobic digestion or co-digestion
Description and scope:
Construction and operation of dedicated facilities for the treatment of separately collected bio-waste
through anaerobic digestion or co-digestion with the resulting production and utilisation of biogas anddigestate and/or chemicals.
●

A monitoring and contingency plan is in place in order to minimise methane leakage at thefacility

The anaerobic digestion or co-digestion unit converts a certain class of waste into methane, adangerous greenhouse gas, with a much higher global warming potential than CO2. It is essential thatthe plant has all the necessary safety measures in place to prevent the possibility of any leakages.
●

The majority of the produced biogas is used directly for the generation of electricity or heat,or injection into the city gas network, or used as vehicle fuel or as fuel/ feedstock in city gas
production. In the unlikely event of equipment breakdown, unconsumed biogas will besafely flared

Biogas that is produced as a result of anaerobic digestion or co-digestion is a renewable energy source
but has potential negative effects on climate and human health. Leakage risks also include explosion,
asphyxiation, and poisoning. Therefore, it is crucial to store and utilise it in the correct manner.
●

The bio-waste that is used for anaerobic digestion or co-digestion is source segregated andcollected separately

Bio-waste that is used for anaerobic digestion or co-digestion should be collected from segregatedsources in order to avoid contamination of the feedstock. More specifically, if contaminated withplastics, metals and other non-biodegradable materials, the feedstock might not be able to be used in
the anaerobic plant and, hence, it might need to be landfilled.
●

The produced digestate is used as fertiliser or soil improver, either directly or after
composting or any other treatment

The material that is left after anaerobic digestion or co-digestion is called digestate. It is a wet mixture
that is usually separated into a solid and a liquid. Digestate is rich in nutrients and can be used as
fertiliser for crops.
35●In the dedicated bio-waste treatment plants, the share of food and feed crops used as input
feedstock, measured in weight, as an annual average, is less than or equal to 10% of the
input feedstock

It is very important that the production of biomethane affects as little as possible the food supply
chain as the use of food-quality feedstocks may lead to an increase of food prices in the market.

Activity cards
Collection and transport of non-hazardous waste in source segregated fractions
SectorActivity
Category
Activity
Description
Closest HSIC
Code

Water supply; sewerage, waste management and remediation activities
Waste collection, treatment and recycling

Separate collection and transport of non-hazardous waste in single or comingled
fractions aimed at preparing for reuse or recycling
381100CGT
E2.1 Collection andCorresponding 3811
Code transport of nonISIC Codehazardous waste insource segregatedfractions
Closest EU
5.5 Collection andClosest Chinese Green Bond 5.3.1.2 Construction andTaxonomy Code transport of nonEndorsed Projects Catalogue operation of garbage
hazardous waste in Codes
treatment facilities
source segregatedfractions
HSIC Description Collection of non-hazardous waste
Criteria and Thresholds
Main Criteria● All separately collected and transported non-hazardous waste that issegregated at source is intended for preparation for reuse or recycling
operations
Additional
None
Requirements
and Comments

36

Utilisation/ treatment of domestic waste – anaerobic digestion or co-digestion
SectorActivity Category
Activity
Description

Closest HSIC
Code

Closest EU
Taxonomy CodeHSIC Description
Main Criteria

Additional
Requirements
and Comments

Water supply; sewerage, waste management and remediation activities
Waste collection, treatment and recycling
Construction and operation of dedicated facilities for the treatment of
separately collected bio-waste through anaerobic digestion or co-digestion
with the resulting production and utilisation of biogas and digestate and/or
chemicals.
382100CGT Code
E2.4
Corresponding
3821
Utilisation/
ISIC Codetreatment ofdomestic
waste –
anaerobic
digestion
5.7 Anaerobic
Closest Chinese Green
1.5.3.1 Comprehensive
digestion of
Bond Endorsed Projects
utilisation of urban and rural
bio-waste
Catalogue Codes
household waste
Treatment and disposal of non-hazardous waste
Criteria and Thresholds● A monitoring and contingency plan is in place in order to minimise
methane leakage at the facility● The majority of the produced biogas is used directly for thegeneration of electricity or heat, or injection into the city gas network,or used as vehicle fuel or as fuel/ feedstock in city gas production. In
the unlikely event of equipment breakdown, unconsumed biogas will
be safely flared● The bio-waste that is used for anaerobic digestion or co-digestion issource segregated and collected separately● The produced digestate is used as fertiliser or soil improver, either
directly or after composting or any other treatment● In the dedicated bio-waste treatment plants, the share of food andfeed crops used as input feedstock, measured in weight, as an annual
average, is less than or equal to 10% of the input feedstock
None

37

3.4.

Sector: Construction

3.4.1. Construction and renovation of buildings
Overview
Hong Kong’s Climate Action Plan 2050 sets out the vision of "Zero-carbon Emissions Liveable City
Sustainable Development", and outlines strategies and targets for combating climate change andachieving carbon neutrality21. As part of the Action Plan, the Hong Kong government has set out toreduce the overall electricity consumption of buildings through promoting green buildings, improvingbuildings' energy efficiency, and promoting a low-carbon lifestyle. The goal is to reduce the electricity
consumption of commercial buildings by 30% to 40% and that of residential buildings by 20% to 30%
from the 2015 level by 2050, and to achieve half of the above targets by 2035.22
The criteria below are to help building developers, owners, operators and investors to determine
whether a building can be considered to be contributing to climate change mitigation. This is done byreferencing locally and internationally available building certification schemes that can serve as
proxies which denote whether a building is “green”.
The criteria presented here are primarily focused on the operational emissions of buildings, and do
not include the emissions associated with the construction of buildings. As will be explained in thefollowing section, a major challenge for standardising the comparison of buildings’ operationalemissions at both the local and international level is the uptake of globally applicable green building
certification schemes.

Metrics
Currently, Hong Kong’s building market typically references BEAM Plus to determine whether abuilding can be considered “green”. BEAM Plus is a green building rating system to assess andrecognise buildings which meet certain green requirements or standards. Recognised and certified by
the Hong Kong Green Building Council (HKGBC)23 and in line with other green building rating tools,
BEAM Plus has a broad coverage, which includes not only energy performance but also water use,material embodied carbon, waste management, climate change adaptation, etc. It provides acomprehensive set of performance standards that can be pursued by developers and owners acrossthe whole life-cycle of buildings and projects.
A problem that is typically encountered when assessing the climate impact of buildings is theavailability of universally comparable data. Ideally, information about energy consumption such asenergy intensity per square metre, (including both electricity and gas) of a building would be madeavailable for use. This could be in the form of Primary Energy Demand and Energy Use Intensity (EUI).
However, it is often the case, particularly in buildings with multiple tenants, that building owners andoperators cannot provide this information without the tenant’s consent. While acknowledging thatefforts to generate this data should be made in the future, this goes beyond the scope of the present
Taxonomy.

21

https://www.info.gov.hk/gia/general/202110/08/P2021100800588.htm
https://www.info.gov.hk/gia/general/202110/08/P2021100800588.htm
23https://www.hkgbc.org.hk/eng/about-us/index.jsp
22

38

Therefore, in lieu of the data unavailability, the criteria reference the BEAM Plus certification schemethat is widely used in Hong Kong, with an additional focus on the energy use component within the
BEAM Plus certification scheme. Applicants under the Hong Kong Taxonomy would be required toprovide both their overall BEAM Plus rating (which should be at either Gold or Platinum) and showthat they meet a minimum energy use threshold, using the BEAM Plus energy use scoring
methodology. Certification should be provided or verified by an independent third party.
Furthermore, the Hong Kong Taxonomy also incorporates the use of HKGBC’s Zero-Carbon-Ready
Building Certification Scheme. It is recognised that at these early stages, many buildings will not havereceived such certification yet, thus using it to meet the Taxonomy is an option, but not a requirement.
Metrics for New Buildings
Design and operational data are required. Design-level and simulation data should be provided for
new construction with a commitment to monitor and report emissions following construction.
1) Operational emissions: Operational emissions encompass all activities related to the use ofbuildings, over their life span. This can be further disaggregated into the following measures:a. Primary energy demand: Primary energy is the amount of energy that must be
generated originally in order to meet the total energy demand of a building. A
decrease of this parameter as well as the source of energy may influence carbon
footprints of buildings.
b. Energy consumption: Total energy consumption is defined as the total amount ofelectricity or equivalent electricity, and gas consumed by the building per annum. A
decrease of this parameter as well as the source of energy may influence carbon
footprints of buildings.
c. Direct emissions of building: Greenhouse gases emitted from activities under theindustry’s control such as from burning fuel for cement production are directemissions; those from sources outside of its control including from the electricity itpurchases are indirect emissions. This may also include the use of LPG or Towngas (forexample use of Towngas in gas boilers).
d. Reference can be made to the Product Carbon Accounting Footprint (PCAF) technicalguidance for “Accounting and Reporting of GHG Emissions from Real Estate
Operations”, for further details on the process for conducting an operationalemissions assessment.
2) Energy savings: The share of total or relative energy consumption that can be saved becauseof the implemented measures.
3) Energy consumption of buildings compared to peers: Energy consumption compared to bestin-class peers. The Electrical and Mechanical Services Department of the Hong Kong
government provides an online building-based electricity EUI Benchmarking Tool24 and HKGBC
also has a Benchmarking and Energy Saving Tool 25 which building owners could use tocompare their energy consumption to peers.
4) Buildings Certification Schemes: Many jurisdictions have their own building certification
schemes. For example, BEAM Plus is commonly used in Hong Kong. Other building certification
schemes used globally include the US Green Buildings Council Leadership in Energy Efficiency
and Design (LEED)26, and the National Australian Built Environment Rating System (NABERS)27.
The International Finance Corporation (IFC) has also developed a buildings rating system
24

https://eui.emsd.gov.hk/en/EUI_Introduction.html
https://hkbest.hkgbc.org.hk/
26
https://www.usgbc.org/leed27
https://www.nabers.gov.au/
25

39

Excellence in Design for Greater Efficiencies (EDGE)28, that can be easily applied to emerging
market contexts. The CGT also outlines the minimum requirements for buildings to beconsidered green under the EU and Mainland China’s respective building certification
schemes (i.e. the Nearly Zero-Energy Building (NZEB) and Mainland China’s three-star rating
system). Given Hong Kong’s role as a global financial centre, the building criteria are designed
to facilitate the mobilisation of capital for green buildings in Hong Kong and internationally.
Therefore, the criteria are designed to recognise certifications of buildings outside of Hong
Kong, provided that they meet certain thresholds under those international building
certification schemes.
5) Zero-Carbon-Ready Building Certification & (Upcoming) Net Zero Building Certification 29:
The HKGBC has recently launched its Zero-Carbon-Ready Building Certification Scheme which
is a positive step towards measuring the emissions performance of buildings in Hong Kong.
We anticipate this scheme will help to enrich Hong Kong’s certification systems and haveincorporated this into the Taxonomy, which may be used instead of the other options that arelaid out in the activity card.
a. The Zero-Carbon-Ready Building Certification Scheme is an energy performancecertification whereby buildings will be certified according to their rating of building
energy efficiency. It includes a Target Setting Certification, whereby buildings areawarded a certification if a target to zero-carbon-ready building requirements is set,
and a Progress Certification rewarded when the reduction target is achieved.
b. The anticipated Net Zero Building Certification is awarded if the annual on-site
renewable energy generation is equal, or more than the annual energy consumptionof the building.
Note: Items 1 to 3 in the above list of Metrics for New Buildings are the most ideal metrics, however,this data may not be adequately available across the buildings sector. As such, it is recommended that
item 4 (BEAM Plus) should be the main criterion for Hong Kong while item 5 (Zero-Carbon-Ready
Building Certification & Net Zero Building Certification) should be a supplementary criterion to provide
flexibility for compliance.
Metrics for Renovations
1) Primary energy demand: Primary energy is the amount of energy that must be generated
originally in order to meet the total energy demand of a building. A decrease of this parameteras well as the source of energy may influence carbon footprints of buildings.
2) Energy consumption: Total energy consumption is defined as the total amount of electricity
or equivalent electricity and the total amount of gas consumed by the building per annum. A
decrease of this parameter as well as the source of energy may influence carbon footprints ofbuildings.
3) Direct emissions of building: Greenhouse gases emitted from activities under the industry’s
control such as from burning fuel for cement production are direct emissions; those fromsources outside of its control including from the electricity it purchases are indirect emissions.

28
29

https://edgebuildings.com/
https://zcrbc.hkgbc.org.hk/

40

Criteria and alignment
The Hong Kong Taxonomy for certification of buildings currently cover four separate economic
activities, namely construction of new commercial buildings, construction of new residential buildings,
renovation of commercial buildings, and renovation of residential buildings. In line with BEAM Plus,commercial buildings are those intended to be used for business, trade or entertainment, for example
office, clubhouse and retail.
The criteria for construction of new commercial buildings and construction of new residentialbuildings cover buildings that are constructed in Hong Kong, but also buildings that are constructed
outside of Hong Kong.
It is important to note that the criteria for construction of new commercial and residential buildingsin Hong Kong references the existing BEAM Plus, as well as the Zero-Carbon-Ready Building
Certification Scheme developed by the HKGBC. Furthermore, it is important to clarify that at thiscurrent stage, we only require that buildings meet the specified criteria under either BEAM Plus or the
Zero-Carbon-Ready Building Certification Scheme. This optionality is to accommodate for the fact that
the Zero-Carbon-Ready Building Certification Scheme is not yet commonplace within the Hong Kongbuildings market.
The present criteria are designed to be usable and supportive of the local buildings market in Hong
Kong while also ensuring that the criteria are aligned with international best practice and help toposition Hong Kong as a conduit for inbound and outbound investments in green buildings worldwide,
irrespective of their location. The present criteria seek to be consistent with the Mainland China andthe EU taxonomies by directly referencing the criteria outlined in the International Platform on
Sustainable Finance’s CGT, while at the same time, establish a common level of stringency acrossdifferent building labelling systems.
While recognising that many different labelling schemes that exist worldwide vary in their approachto assessing a building’s impact on climate change, we have sought – through engagement withindustry experts in particular from the HKGBC - to address the broader systematic challenge facing thecomparability of low-carbon buildings labelling systems between markets. This has been done with afocus on the climate impacts of a building’s operations. However, we expect that as the Hong Kong
Taxonomy is developed further, other environmental objectives can be introduced into the criteria.
Furthermore, there is flexibility to update the different criteria in the Hong Kong Taxonomy from time
to time to reflect the latest progress in the industry and developments in the green building
certification schemes developed by the HKGBC.

41

Activity cards
Renovation of existing buildings
SectorActivity Scope
Activity
Description
Closest HSIC
Code

Construction
Construction and renovation of buildings
Renovation of existing buildings

Closest EU
Taxonomy Code

Closest Chinese Green
5.2.1.5 Energy conservation
Bondand environmental-friendly
Endorsed Projects
renovation of existing
Catalogue Codes
buildings
419100 - Structural alteration at erected buildings and structures
439101 - Interior fitting, decoration and repairs for buildings
439102 - Exterior renovation and repairs for buildings
4321XX - Electrical equipment installation and maintenance
4322XX - Ventilation, gas and water fitting installation and maintenanceactivities
4329XX - Other construction installation and maintenance
4399XX: Other general finishing and specialised
construction works

HSIC Description

Main Criteria

419100439101439102
4321XX
4322XX
4329XX
4399XX
7.2 Renovationof existingbuildings

CGT Code

F1.2
Renovationof existingbuildings

Corresponding
ISIC Code

4100
4321
4322
4329
4300
4390

Criteria and Thresholds
For the renovation of existing commercial buildings:
1) The building renovation leads to a reduction of primary energy demand,energy consumption, or direct GHG emissions of at least 30% against thebuilding’s historic average, or2) Use HKGBC’s Zero-Carbon-Ready Building: Must be at least Extra Low orLevel 2 improvement (i.e., 25% reduction) according to Zero-Carbon-readybuilding Certification Scheme.
For the renovation of existing residential buildings:
The building renovation leads to a reduction of primary energy demand, energy
consumption, or direct GHG emissions of at least 30% against the building’s
historic average. This is proven with measured and verified data.

Additional
Requirements
and Comments

None

42

Construction of new buildings
SectorActivity Scope
Activity
Description
Closest HSIC Code

Closest EU
Taxonomy CodeHSIC Description

Main Criteria

Construction
Construction and renovation of buildings
Construction of new buildings
411000CGT Code F1.1
Corresponding
4100
412000Construction ISIC Code
4321
419100of
new
4322
439101
buildings
4329
4321XX
4330
4322XX
4390
4329XX
4399XX
7.1 Construction Closest Chinese Green
5.2.1.1 Construction of ultraof new buildings
Bond
low energy consumption
Endorsed Projects
buildings
Catalogue Codes
5.2.1.2 Green buildings
411000 - Erection of architectural superstructures
412000 - Structural steel framework erection
419100 - Structural alteration at erected buildings and structures
439101 - Interior fitting, decoration and repairs for buildings
4321XX - Electrical equipment installation and maintenance
4322XX - Ventilation, gas and water fitting installation and maintenanceactivities
4329XX - Other construction installation and maintenance
4399XX: Other general finishing and specialised
construction works
Criteria and Thresholds
For the construction of new commercial buildings in Hong Kong:
1) Buildings must be BEAM Plus certified (to either gold or above) or designed
to certify as such, and the Energy Use component of applicant’s BEAM Plus
Certification must meet at least a minimum of 10 credits under EU2(Reduction of CO2 Emissions) and a minimum score of 70% in Energy Use
category and, either:a. For projects certified under BEAM Plus 1.2: 30% energy saving
against the BEC 2018 baseline, orb. For projects certified under BEAM Plus 2.0, 20% energy saving
against BEC 2021 baseline.
2) Or buildings certified at least Extra Low in EUI or level 2 improvement (i.e.
25% reduction) in Energy Performance Certification under the ZeroCarbon-Ready Building Certification Scheme.
For the construction of new residential buildings in Hong Kong:
1) Buildings must be BEAM Plus certified (to either gold or above) or designed
to certify as such, and the Energy Use component of applicant’s BEAM Plus
Certification must meet at least a minimum of 10 credits under EU2(Reduction of CO2 Emissions) and a minimum score of 70% in Energy Use
category and, either:43

a. For projects certified under BEAM Plus 1.2: 30% energy saving
against the BEC 2018 baseline, orb. For projects certified under BEAM Plus 2.0, 20% energy saving
against BEC 2021 baseline.
2) Or buildings certified at least Extra Low in EUI or level 2 improvement (i.e.
25% reduction) in Energy Performance Certification under the ZeroCarbon-Ready Building Certification Scheme.
Construction of new commercial and residential buildings outside Hong Kongcan also be eligible if the following conditions are met. Buildings that aresituated in markets with existing taxonomies such as the EU or Mainland
China would be required to meet the respective substantial contribution toclimate change mitigation criteria in those markets:
1) For projects in the European Union:a. Primary energy demand, defining the energy performance ofthe building resulting from the construction, is at least 10 %lower than the threshold set for the NZEB requirements innational measures implementing Directive 2010/31/EU of theEuropean Parliament and of the Council. The energy
performance is certified using an as built Energy Performance
Certificate.
b. For buildings larger than 5000m2, upon completion, thebuilding resulting from the construction undergoes testing for
air-tightness and thermal integrity, and any deviation in thelevels of performance set at the design stage or defects in thebuilding envelope are disclosed to investors and clients.
i. The testing should be carried out in accordance with
EN13187 (Thermal Performance of Buildings Qualitative Detection of Thermal Irregularities in
Building Envelopes - Infrared Method) and EN 13829(Thermal performance of buildings - Determination of
air permeability of buildings - Fan pressurization
method) or equivalent standards accepted by therespective building control body where the building islocated.
2) For buildings in Mainland China:
a. Projects should be rated to the third-level of Mainland China’s
Three Star System
For buildings in markets that are currently not covered under the CGT, they
may refer to the following criteria. These criteria may also be used forbuildings in Hong Kong where relevant.
1) Certified under Leadership in Energy and Environmental Design (LEED)
to Gold level anda. Minimum score of 9 points under Energy Assessment Credits
and44

b. Optimise Energy Performance for 30% improvement above
ASHRAE 90.1 in energy performance.
2) Certification under NABERS of at least five stars.
3) Certification under IFC EDGE is also acceptable. For buildings in Least
Developed Countries (as classified by the UN), any level of IFC EDGE
certification is sufficient to be considered green, otherwise, buildingsthat seek to use IFC EDGE certification in non-Least Developed
Countries, must obtain at least an IFC EDGE Advanced
certification or above.
Additional
Requirementsand Сomments

For the construction of new residential buildings:
The criteria for construction of new residential buildings outside of Hong Kongreference international best practices.

Additional Information
Hong Kong uses BEAM Plus, a green building rating system to assess and recognise buildings whichmeet certain green requirements or standards. BEAM Plus is recognised and certified by the HKGBC.
As of end 2022, there were 3,769 buildings, mainly situated in Hong Kong, that had been certified by
BEAM Plus or its predecessor HK-BEAM. BEAM Plus defines a comprehensive set of performance
criteria covering a range of sustainability issues relating to the planning, design, construction,commissioning, management, operation and maintenance of buildings.
However, one characteristic of scoring-based rating systems is that they do not solely focus on the
climate-performance of buildings. This is because this kind of rating system covers multiple aspects ofa building (beyond climate change mitigation) including water, waste, material, site and transport,
indoor environments, building management and more.
Therefore, as can be seen in the criteria above, in order to balance the accuracy of the taxonomy
criteria with usability and practicality, not only do we use the overall BEAM Plus performance level,
but also ask for an additional set of climate and energy-related criteria.
More information comparing the green building rating systems of different markets can be foundhere: Green-Building-Rating-Systems-Energy-Benchmarking-Study.pdf (hkgreenfinance.org)
The HKGBC anticipated launch of a Net Zero Building Certification. We will monitor its development
and incorporate it into the Taxonomy when it becomes available.

45Annex 1: List of Abbreviations
AER
ASEAN
ASHRAE
BEAM
BEC
BRT
C&I
Climate Bonds
CBT
CEPT
CGT
CH4
CO2
COVID
CSP
DNSH
DWT
EDGE
EEDI
EEOI
EU
EUI
EVDI
FPSO
GHG
GT-nm
HKGBC
HKMA
HSIC
KWh
Hong Kong
Taxonomy
ICMA
IFC
IMO
ISIC
ISO
LEED
LNG
M2
MSS

Annual efficiency ratio
The Association of Southeast Asian Nations
The American Society of Heating, Refrigerating and Air-Conditioning
Engineers
Building Environmental Assessment Method
Building Energy CodeBus rapid transit
Commercial and industrial
Climate Bonds Initiative
Climate Bonds Taxonomy
Chemically enhanced primary treatment
Common Ground Taxonomy
MethaneCarbon dioxide
Coronavirus Disease
Concentrated Solar Power
Do no significant harm
Deadweight tonnage
Excellence in Design for Greater Efficiencies
Energy Efficiency Design Indicator
Energy Efficiency Operational Indicator
European Union
Energy use intensity
Existing Vessel Design Index
Floating production, supply and off-loading
Greenhouse gas
Gross tonne- Nautical mile
Hong Kong Green Building Council
Hong Kong Monetary Authority
Hong Kong Standard Industrial Classification
Kilowatts per hourHong Kong Taxonomy for Sustainable FinanceInternational Capital Market Association
International Finance Corporation
International Maritime Organisation
International Standard Industrial Classification of All Economic Activities
International Organization for Standardization
Leadership in Energy Efficiency and Design
Liquefied natural gas
Square metre
Minimum Social Safeguards
46

MSW
NABERS
NACE
NZEB
PCAF
PKM
PV
TKM
SURF
UN
VKM

Municipal solid waste
National Australian Built Environment Rating System
Nomenclature of Economic Activities
Nearly Zero-Energy Building
Product Carbon Accounting Footprint
Passenger kilometre
Photovoltaic
Tonne kilometre
Subsea, umbilicals, risers, flowlines
United Nations
Vehicle Kilometre47