LCQ21: Promoting cross-boundary carbon trading and settlement
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Question:
In December 2025, the Central Economic Work Conference included "following the dual-carbon goals and driving a comprehensive green transition" in the eight key tasks to be pursued for the economic work in 2026. The carbon market is an important tool that utilises market mechanisms to address climate change and promote green and low-carbon development, and the international carbon trading platform Core Climate launched by the Hong Kong Exchanges and Clearing Limited (HKEX) in 2022 (Core Climate) is the world's only carbon marketplace offering settlement in both Hong Kong dollars and Renminbi for international voluntary carbon credits at present. In this connection, will the Government inform this Council:
(1) whether it knows the respective annual numbers of transactions, transaction volume and transaction value of the Core Climate platform since its establishment;
(2) whether the Government will discuss with HKEX the introduction of blockchain technology to the listing and trading processes of carbon credits on the Core Climate platform, so as to leverage blockchain technology's characteristics of immutability, traceability, transparency and security to avoid double counting and reduce transaction costs;
(3) in addition to introducing international carbon credits to the Core Climate platform, whether the Government will support HKEX in developing local "carbon avoidance" (e.g. energy efficiency enhancement and the use of alternative clean energy) and "carbon removal" (e.g. direct air carbon capture) projects to generate more local carbon credits and enrich buyers' choices; if so, of the details; if not, the reasons for that;
(4) whether the Government will motivate HKEX to establish mutual access and assurance standard alignment mechanisms between the Core Climate platform and the "National Voluntary Greenhouse Gas Emission Reduction Trading Market" to enhance the liquidity of the Core Climate platform, promote cross-boundary carbon trading and settlement, and facilitate the internationalisation of the Mainland carbon market; if so, of the details; if not, the reasons for that; and
(5) given that HKEX signed a Memorandum of Understanding with Guangzhou Emissions Exchange, Shenzhen Green Exchange and Macao International Carbon Emission Exchange in September 2025, whether the Government will, under this co-operation framework, expeditiously explore with HKEX the joint establishment of a unified carbon trading platform in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), and formulate comprehensive and unified assurance standards and pricing, trading and assurance rules to enhance the overall liquidity and influence of the GBA carbon market; if so, of the progress; if not, the reasons for that?
Reply:
President,
The National 15th Five-Year Plan outlines the acceleration of comprehensive green transformation and the orderly advancement of innovation in carbon finance products and derivatives. The Hong Kong Exchanges and Clearing Limited (HKEX) launched an international carbon marketplace Core Climate in October 2022, offering dual-currency settlement services in Hong Kong dollars and Renminbi for the trading of international voluntary carbon credits. It aims to establish Hong Kong as an international carbon market to connect opportunities across the Mainland, Asia, and the rest of the world, with a view to enhancing green development momentum and assisting in promoting global net-zero transition.
In consultation with the HKEX and the Hong Kong Monetary Authority (HKMA), my reply to the five parts of the question is as follows:
(1) As of March 2026, Core Climate's cumulative carbon credit transaction volume has exceeded 1 million tonnes, with over 130 registered participants. Since the carbon projects and carbon credits traded and settled through Core Climate are diverse in nature and have a very wide price range, with sensitive commercial information involved, relevant nominal volumes or information of the transactions cannot be disclosed. However, it can be noted that Core Climate participants include large corporations. For example, Cathay Pacific settled 50 000 tonnes of voluntary carbon credits through Core Climate in December 2024, demonstrating Core Climate's ability in assisting companies to achieve their sustainability goals.
(2) Actively exploring the application of financial technology is a crucial part of promoting the innovative development of carbon credit products. To this end, in 2025, the HKMA and the HKEX successfully completed the testing of a tokenised carbon credit transaction use case under Project Ensemble, with a view to leveraging emerging technologies such as blockchain to facilitate cross-boundary transactions and improve the transparency and efficiency of carbon credit traceability. The HKMA and the HKEX will publish a report on the testing results in due course, summarising the findings and hoping to provide valuable experience and solid foundation for future financial innovation products for promoting low-carbon economy.
(3) Since its launch in 2022, Core Climate has continuously expanded its product range. By the end of 2025, the number of carbon reduction projects on the platform had increased to over 60, including forestry, solar, wind, and biomass projects in Asia, South America, and Africa. In addition to Verified Carbon Standard (VCS) from Verra, the HKEX incorporated Gold Standard Verified Emission Reductions (GS-VER) into Core Climate in August 2024, further diversifying the scope of tradable climate projects. The HKEX will continue to actively expand relevant products and services to support decarbonisation locally, regionally, and internationally.
(4) and (5) Our country is striving to build a more effective, dynamic, and internationally influential national carbon market to promote green and low-carbon transformation and help achieve the goals of carbon peaking and carbon neutrality. To this end, the Hong Kong SAR (Special Administrative Region) Government is actively working with relevant Mainland regulatory authorities and institutions to explore assisting our country's participation in the international carbon market, including the formulation of voluntary carbon credit standards and methods, as well as the registration, trading, and settlement of carbon emission reductions. Leveraging Hong Kong's advantages of enjoying our nation's strong support and being closely connected to the world, the Government aims to serve our country's dual-carbon strategy and help build a carbon market which is well integrated with the international market.
Besides, the HKEX signed a Memorandum of Understanding (MOU) in September 2025 with the Guangzhou Emissions Exchange, Shenzhen Green Exchange and Macao International Carbon Emission Exchange to work together in promoting the development of the carbon markets and green finance ecosystem across the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). Under the MOU, the four exchanges will explore new co-operation opportunities in carbon market and green finance, and facilitate experience exchange and knowledge sharing in order to enhance the professional capabilities of relevant institutions and personnel in carbon market operations and green finance, and promote in-depth development of the regional carbon market. Currently, the HKEX is working closely with carbon exchanges in the GBA to actively explore the testing of cross-boundary carbon trade settlement, with a view to completing the pilot and summarising experience within 2026 to provide reference for our country's future cross-boundary carbon trading.
Ends/Wednesday, March 18, 2026
Issued at HKT 12:35
Issued at HKT 12:35
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