Hong Kong owners of electric vehicle (EV) charging infrastructure will soon be able to earn revenue by selling carbon credits generated by their facilities through the city’s bourse, according to a local provider of charging equipment and software.
“We are the first EV charging solutions operator in Hong Kong that has started a carbon credit project,” said Cornerstone Technologies CEO Vincent Yip Siu-hong in an investors’ briefing on Friday.
“Our credits are generated through registration with Verra, which will become fully tradeable. We are talking to Hong Kong Exchanges and Clearing (HKEX) on how to operate on its newly established carbon-trading platform.”
Washington-based Verra is a non-profit organisation that operates one of the world’s biggest carbon-crediting programmes. To obtain tradeable credits, claimants’ projects are subject to audits on their greenhouse gas reduction or removal benefits.
HKEX launched a voluntary carbon-credit-trading platform in late October, matching companies seeking to offset their carbon footprints with owners of verifiable projects that reduce or remove greenhouse gas emissions.
Cornerstone’s software is designed to help its clients calculate their carbon footprint reduction, based on which they can obtain carbon credits to be sold or used to offset their own emissions.
Under the current fuel mix of Hong Kong’s electricity supply, the carbon footprint of the full supply chain associated with EV energy use is around a quarter smaller than that of petrol or diesel vehicles, Yip said.
The government has offered multiple incentives to encourage the adoption of EVs.
They include subsidies for vehicle purchases and charging, in addition to HK$3.5 billion (US$449 million) in subsidies for the installation of charging facilities at 140,000 parking spaces in 700 car parks by 2028, as part of efforts to fight climate change and help the city become carbon neutral by 2050.
The Hong Kong government has offered multiple incentives to encourage the adoption of EVs. Photo: Sam Tsang
So far, just seven contracts have been awarded under the charging facility installation programme, three of which were won by Cornerstone, Yip said, adding that the entire programme is expected to involve around 600 contracts.
The government is aiming for all new cars sold in Hong Kong to be electric by as early as 2030. Currently, EVs make up almost half of all new cars sold, according to Yip.
As of the end of October, Hong Kong had 41,259 registered private EVs, a 67.4 per cent increase from a year ago, according to the Transport Department. They made up 6.4 per cent of all registered cars in the city.
However, there are only 5,283 public charging points at the moment, Yip said, which works out to about one for every 8 EVs.
A combined refuel station for electric cars and fuel vehicles at the Hong Kong International Airport. Photo: Dickson Lee
The Environmental Bureau targets to have at least 150,000 parking spaces in private residential and commercial buildings equipped with EV charging capability by 2025.
“Currently, EV owners predominantly use public fast chargers,” Yip said. “From 2025 onwards, a lot more medium chargers will need to be installed at home parking spaces and also in monthly rental car parks. That will become the dominant force.”
By the end of September, Cornerstone had signed agreements on EV charging projects in 23 residential car parks in Hong Kong, involving over 8,000 parking spaces.
Cornerstone, which entered the charging infrastructure business in 2016, has also made a foray into electric taxis. As a pilot scheme, it bought 10 units from Shenzhen-based EV maker BYD and plans to lease them to drivers early next year.
“We hope to be a major force in helping the government reach its target of having 3,000 electric taxis on the road by 2027,” Yip said.
Cornerstone has bought 10 electric taxis from Shenzhen-based EV maker BYD and plans to lease them to Hong Kong drivers. Photo: Roy Issa
The company, whose clients include property owners such as Link Reit, car park management firm Wilson Parking and bus operator KMB, has also launched a mobile app for EV owners to find available parking spaces with charging points.
Hong Kong-listed Cornerstone’s revenue from its EV charging business jumped five-fold to HK$20.57 million in the first nine months of 2022 from HK$4 million in the same period last year, achieving a gross profit margin of 13.9 per cent.
Cornerstone’s total revenue could reach HK$278.9 million next year, according to a forecast by stock research firm AceCamp Research.
Shares of the company have surged 113 per cent since December 5, closing at HK$3.07 on Friday.