Towngas, the leading gas utility company in Hong Kong, is optimistic about the potential of hydrogen energy in the region and has been actively engaging with various stakeholders, according to General Manager Don Cheng Hill-Kwong.
The company has been in close communication with the Hong Kong government, bus operators, and environmental groups to drive the adoption of hydrogen as a clean energy source.
With a 160-year history in gas management, Towngas possesses the experience and expertise necessary to ensure the safe and reliable operation of hydrogen extraction plants. While specific details regarding timelines and costs were not disclosed, Cheng mentioned that it would take approximately 12 to 15 months to construct a hydrogen filling station.
The government of Hong Kong has also recognized the importance of hydrogen energy and has allocated HK$200 million (US$25.5 million) from the budget for the establishment of an energy transport fund. The fund will support trials of hydrogen fuel cell double-decker buses and heavy-duty buses in the coming year. In addition, an interdepartmental task force has been established to address legislative amendments required to permit the use of hydrogen vehicles.
Currently, hydrogen is classified as a dangerous substance in Hong Kong rather than an energy source. To address this, the Ministry of Environment and Ecology plans to propose amendments to the Gas Safety Ordinance, with the expectation of submitting them to the Legislative Council by 2025.
Towngas, which currently relies on natural gas, naphtha, and marsh gas collected from landfills to produce town gas for household use, is exploring the possibility of purchasing green hydrogen from countries like Australia and Saudi Arabia. This shift is part of the company’s efforts to gradually replace fossil fuels in its energy mix.
As Hong Kong and other cities strive to achieve carbon neutrality by 2050, the adoption of hydrogen energy plays a crucial role in reducing carbon emissions. Chinese President Xi Jinping has pledged to meet dual carbon goals, aiming for peak carbon emissions by 2030 and carbon neutrality by 2060.
However, environmental groups like Greenpeace have called on Towngas to provide clearer plans for transitioning to clean energy. They argue that the current approach, which includes the use of gray hydrogen (produced from fossil fuels), is not conducive to carbon reduction. Greenpeace emphasizes the importance of utilizing green hydrogen, which is produced from renewable sources, to achieve true environmental benefits.
Towngas’s move towards hydrogen energy is driven, in part, by the need to diversify revenue sources due to declining sales of coal gas. Changes in people’s living preferences and the government’s focus on electricity for the energy transition have contributed to the challenges faced by Towngas, as noted by Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank.
Towngas’s gas sales have experienced a downward trend in recent years, reaching 27,398 terajoules in 2022, down from a peak of 29,550 terajoules in 2018.