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China and climate change
BusinessChina Business

Hong Kong’s first carbon-focused fund eyes investments in projects to improve China’s climate-change ratings

  • Hong Kong and China Gas Co and IDG Capital are launching the city’s first known carbon-focused fund targeting opportunities in mainland China
  • China’s net-zero goal will induce US$20 trillion of investments, according to Tsinghua University

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Towngas Smart Energy aims to leverage its access to 40 million residential, commercial and industrial users there and convert them to solar energy from gas consumption. Photo: Martin Chan
Peggy Sito

Hong Kong and China Gas Company, the city’s sole piped-gas supplier, plans to raise up to 10 billion yuan (US$1.6 billion) with a partner for a new fund focusing on decarbonisation projects as China bolsters its ambitions of getting greenhouse emissions under control.

The IDG Towngas Clean Energy Fund will become the first known of its kind by a Hong Kong blue-chip company as China, the world’s top carbon dioxide emitter, steps up efforts to meet its carbon neutrality goal by 2060. Its partner IDG Capital is a venture capital firm focused on Chinese businesses.

“There is a massive opportunity in this business amid China’s carbon-neutrality pledge,” deputy managing director Peter Wong Wai-yee said in an interview with the South China Morning Post. Charging stations for electric vehicles, green technology start-ups and energy storage systems are among its areas of interest.

The Hong Kong and China Gas Company, whose history dates back to 1862, is the sole supplier of piped-cooking gas to households in Hong Kong. The firm is controlled by Henderson Land Development, a property firm founded by 93-year-old Lee Shau-kee, the city’s second richest tycoon.

China’s road to carbon neutrality could induce up to 130 trillion yuan of new investments, according to an estimate by Tsinghua University’s Institute for Climate Change and Sustainable Development. While the nation’s overall climate-change goals are deemed “highly insufficient” by the Climate Action Tracker, the government is ramping up its contribution in renewable sources of energy.

China is the world largest hydro, wind, solar and nuclear power projects installer and pushing heavily into cleaner energy solutions like hydrogen. It has also dangled out incentives to spur the adoption of electric vehicles, making the nation the single biggest marketplace for makers to compete with Tesla.

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