【ESG News】Global Trends Biweekly Newsletter Issue 65 (2026.8.3-2026.8.16)

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Hong Kong ESG trends

HKMA and DFSA to Co-host Third Climate Finance Conference to Drive Transition in a Changing World

The Hong Kong Monetary Authority (HKMA) and the Dubai Financial Services Authority (DFSA) announced on August 10 that they will jointly host the 3rd Joint Climate Finance Conference (Conference) in Hong Kong on September 10.

The conference is a flagship initiative jointly established by the HKMA and the DFSA to support and enable the continued development of climate finance across Asia and the Middle East. Themed “Driving Transition in a Changing World”, this year’s conference will also be a main event of the Hong Kong Green Week 2026.

Source: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2026/08/20260810-3/

Lianhe Green Insights

The HKMA and DFSA’s continued co-hosting of the climate finance conference holds immense strategic value, establishing a stable platform for green capital connectivity between Asia and the Middle East. As heightened global economic and energy policy volatility amplifies uncertainty around the green transition, both regions can leverage their respective strengths in offshore finance and commodity financing. By linking exchanges to bring together policymakers and investors to jointly develop transition finance instruments, they can break down regional barriers to green investment. This collaboration not only consolidates Hong Kong’s status as an international green finance hub, but also channels long-term capital into the Middle East’s low-carbon energy transition. By translating climate issues into actionable investment opportunities through regular cross-border dialogue, this partnership sets a benchmark for regional cooperation in global sustainable finance.

International ESG trends

Germany Proposes Fixing National Carbon Price at $64–$75/Tonne in 2027 to Mitigate Volatility Risks from EU ETS 2 Delay

The German government has approved a draft amendment to the Fuel Emissions Trading Act (BEHG), planning to maintain the domestic carbon price within a fixed corridor of $64 to $75 per tonne of CO₂ in 2027, consistent with this year's levels. This move aims to prevent German carbon prices from being directly linked to Europe's more volatile carbon market starting in 2027, following the postponement of the EU’s new Emissions Trading System for buildings and road transport (ETS 2) to 2028. The draft amendment also tightens auction rules: the maximum purchase volume per auction and per compliance account has been reduced from 50% to 20%, and the use of 2026 allowances for 2027 compliance is prohibited.

Source: https://esgnews.com/germany-moves-to-stabilize-carbon-prices-through-2027/

Lianhe Green Insights

Germany's move to fix the 2027 carbon price within the $64–$75/tonne range reflects the pragmatic challenge facing policymakers in balancing carbon pricing ambition with industrial competitiveness. Carbon pricing mechanisms must weigh decarbonization incentives against cost control to prevent excessive shocks to the industrial sector—a consideration that is particularly prominent against the backdrop of European manufacturers facing elevated energy costs, expanding investment needs, and mounting decarbonization pressures. For enterprises, the fixed price corridor in 2027 provides short-term price predictability without signaling a dilution of carbon pricing rigor; concurrently, this policy grants domestic German industries time to adjust in transitioning toward the future unified EU carbon market system.

EU Postpones New CORSIA Carbon Credit Rules to 2027

The European Commission has decided to temporarily drop previously proposed additional carbon credit quality criteria for Phase 1 of Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) due to a severe shortage of eligible carbon units, delaying the implementation of these measures to Phase 2 (2027–2035). According to estimates by the International Air Transport Association (IATA), global aviation offset demand for Phase 1 ranges between 170 million and 236 million tonnes of CO₂ equivalent, whereas eligible or pending-authorisation supply stands at only around 40 million tonnes. Under the original EU criteria, credits from high forest cover, low deforestation (HFLD) projects and certain improved cookstove projects would have been excluded, further exacerbating the supply deficit. Market data indicates that credits compliant with the original EU proposal had already commanded a premium of roughly $5 to $6 per tonne over standard CORSIA units. From Phase 2 onward, the EU will reintroduce stricter quality requirements, which could expose European Economic Area (EEA) carriers to higher compliance costs compared to operators in other regions.

Source: https://esgnews.com/eu-eases-corsia-carbon-credit-rules-amid-supply-crunch/

Lianhe Green Insights

This short-term easing of rules mitigates compliance risks for airlines, but postponing higher integrity standards to 2027 does not eliminate the fundamental supply-demand imbalance. Moving forward, this delay could exacerbate cost differentials among regional airlines and reshape carbon market pricing. Price trajectories in the carbon credit market will remain dependent on the formal enactment of detailed regulations and actual shifts on the supply side.

Mainland China ESG trends

State Council Revises Multiple Ecological Administrative Regulations

Premier Li Qiang signed State Council Decree No. 843, which was considered and approved at an Executive Meeting of the State Council and came into effect on August 15, 2026, in tandem with the implementation of the Ecological Environment Code. To unify the ecological regulatory system, this document amends 12 administrative regulations and repeals 3 in a single move, standardizing legal citations and optimizing penalty gradients. Among these, the Interim Regulations on the Administration of Carbon Emission Trading underwent their first amendment. The revision introduces a flexible "rectification within a prescribed time limit" procedure for allowance settlement and establishes tiered fines to avoid one-size-fits-all enforcement. Failure to rectify within the given timeframe may result in cumulative high fines and ordered suspension of production. Simultaneously, the amendment enforces dual liability for both entities and managers by raising the penalty range for enterprises and adding personal fines for directly responsible individuals, thereby pressing executive responsibility for emission reduction compliance and strengthening compliance enforcement across the national carbon market.

Source: https://www.mee.gov.cn/zcwj/gwywj/202608/t20260814_1164034.shtml

Lianhe Green Insights

The implementation of State Council Decree No. 843 alongside the Ecological Environment Code marks the first amendment to the carbon trading regulations, signaling a transition in carbon compliance from policy advocacy to a rigid statutory obligation. By introducing a prescribed rectification period and replacing rigid penalties with tiered enforcement, the new rules balance enforcement flexibility with emission reduction constraints. The dual liability system for entities and management holds corporate decision-makers accountable for carbon management and closes accountability loopholes. This revision unifies penalty standards across the ecological sector and refines the legal framework for the national carbon market, compelling key emission entities to integrate carbon accounting and allowance settlement into daily operations while driving green, low-carbon transition through clear and predictable institutional costs.

NEA Releases China Hydrogen Development Report (2026): Renewable Hydrogen Capacity Exceeds 1 Million Tonnes Amid Expanding Infrastructure

The National Energy Administration (NEA) released the China Hydrogen Development Report (2026) in August. As of the end of 2025, China's completed and under-construction renewable energy hydrogen production capacity exceeded 1 million tonnes per year. Of this total, commissioned capacity surpassed 250,000 tonnes per year—more than doubling from the end of 2024—while under-construction capacity exceeded 900,000 tonnes per year, with water electrolysis serving as the primary technological route. Hydrogen refueling infrastructure continuously enhanced its support for end-use applications: as of the end of 2025, over 590 hydrogen refueling stations had been built nationwide, 6 ports including Shanghai, Tianjin, and Dalian possessed green ammonia or green methanol bunkering capabilities, and domestic green ammonia and green methanol bunkering volume accumulated to over 30,000 tonnes in 2025.

Source:   https://www.nea.gov.cn/20260811/de5edbfaa0de4df2897c2acdb0b62a4c/20260811de5edbfaa0de4df2897c2acdb0b62a4c_58c5a75944f0a64de8abc82b4f1ee55a63.pdf    

Lianhe Green Insights

According to data from the NEA's China Hydrogen Development Report (2026), China's hydrogen industry has moved beyond the technology verification phase into a new era of large-scale capacity construction. However, as industry development accelerates, the mismatch between supply capacity and market demand has become increasingly prominent. Specifically, the production cost of green hydrogen remains significantly higher than that of grey hydrogen, leaving its economic viability reliant on policy subsidies and carbon price mechanisms. Furthermore, existing hydrogen storage and transport infrastructure remains localized, with cross-regional interconnected pipeline networks yet to be built, hindering the optimal dispatch of resources nationwide. Looking ahead, the core tasks for industrial development should focus on lowering green hydrogen costs, expanding downstream applications, and accelerating the construction of a unified national hydrogen market system, thereby translating current capacity expansion into long-term, stable emission reduction results.