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February, 2009:

Mainland Power Output Falls 8.3pc

Updated on Feb 28, 2009 – SCMP

Mainland power output falls 8.3pc amid slowing economy

The mainland cut power output by 8.3 per cent in the first 1-1/2 months because of a slowing economy. Electricity generation from the country’s major power producers dropped to 328.1 million megawatt-hours between January 1 and February 15 from a year earlier. Factory output contracted for a fourth month in January as exports fell, cutting electricity consumption, according to an official government-backed survey. Bloomberg

CLP Posts HK$10.4 Billion Net Profit

Reuters in Hong Kong – 1:50pm, Feb 26, 2009

Hong Kong’s leading power provider CLP Holdings (SEHK: 0002) posted a 1.7 per cent fall last year net profit, as earnings have yet to fully reflect the impact of the reduced permitted rate of return for utility companies.

CLP, the larger of the city’s two main electric power suppliers, earned HK$10.42 billion, or HK$4.33 per share, in the year ended December, compared with profit of HK$10.6 billion or HK$4.40 per share in 2007. Revenues rose 7 per cent to HK$54.3 billion, the company said in a statement.

The results beat the consensus forecast of HK$10.1 billion by 11 analysts polled by Reuters.

Smaller rival Hong Kong Electric (SEHK: 0006) is expected to report next month a slight increase in full-year net profit.

The stock became a safe heaven for investors and traded relatively steady last year, outperforming a 48 per cent plunge in Hong Kong’s blue chip index. It has continued to outperform the Hang Seng index so far this year, gaining about 4 per cent, compared with HSI’s nearly 10 per cent fall as of Wednesday’s close.

Mitsubishi Motors Signs MoU with Hong Kong Environment Bureau

Mitsubishi Motors Signs MoU with Hong Kong Environment Bureau Regarding Testing of i MiEV Electric Vehicle

Hong Kong, Feb 26, 2009 – (ACN Newswire) – Mitsubishi Motors Corporation (MMC), in cooperation with its Hong Kong distributor Universal Cars Ltd., today signed a Memorandum of Understanding (MoU) with the Environment Bureau of the Government of the Hong Kong Special Administrative Region of the People’s Republic of China regarding local evaluation of the zero-emissions i MiEV* electric vehicle.

As an investigative step toward possible future introduction of the electric vehicle, the proposed project would begin as early as May 2009 and would examine issues including market acceptability, as well as incentives and structural issues such as the suitability of the charging infrastructure.

Announced in October 2006, the i MiEV represents the pinnacle of Mitsubishi Motors’ green technologies. Currently involved in testing and promotional activities in Japan, New Zealand, the United States and across Europe, the i MiEV will be launched in Japan during the summer of 2009.

*MiEV: Mitsubishi innovative Electric Vehicle

Government To Promote The Use Of Electric Cars

Government seeks to pave way for introduction of electric cars

BUDGET 2009 – SCMP – Cheung Chi-fai – Feb 26, 2009

The government will promote the use of electric cars in Hong Kong by testing the vehicles in the city, while the financial secretary will head a body to overcome hurdles to their early introduction here.

The move came as Financial Secretary John Tsang Chun-wah extended the registration tax waiver for electric vehicles for an extra five years, to March 2014.

The waiver was introduced in 1994, but only 31 private electric cars had been registered out of more than 400,000 on the city’s streets by the end of last year.

The test car will be a Mitsubishi iMiev, a four-seater vehicle powered by a lithium-ion battery, which was displayed in Hong Kong last October.

A government department will test its performance and issues related to battery recharging. Officials acknowledged that the government is now taking a more proactive role to lure carmakers into introducing electric vehicles here on a commercial basis, as early as possible and in the greatest numbers feasible.

To assess the development of electric cars, the officials said Secretary for the Environment Edward Yau Tang-wah had recently visited BYD Auto, a mainland-based battery producer that has developed an electric private car model.

Electric cars are emissions-free and about 80 per cent more energy efficient than petrol-powered ones. Recent technological breakthroughs have greatly increased their battery capacity, to sustain a trip of at least 100km after a single charge, up from 40km earlier in their development.

Quick-charging technology means a car can now be charged in half an hour, compared to eight hours before, and it has become easier to recycle used lithium batteries.

Mr Tsang will lead a high-level committee to address the problem of making battery-recharging infrastructure widely available.

“We will examine the feasibility of providing recharging facilities in government multi-storey car parks and explore ways of encouraging the business sector, including property developers and private car park operators, to set up such facilities,” Mr Tsang said.

The government fleet might adopt electric cars, and the city could tap the business and employment opportunities of producing electric car parts and accessories for the growing market, he said.

Chau Kwok-tong, an electric vehicle expert with the University of Hong Kong, welcomed the government’s move to promote electric cars.

“The smaller size of Hong Kong and relatively shorter travel distance makes the city an ideal place for using electric cars,” he said.

Hailing the ideal of a green economy in the budget, Mr Tsang said the city would step up co-operation with Guangdong to develop regional hi-tech recycling industries and promote cleaner production.

Locally, both government and private buildings would benefit from two programmes, totalling HK$900 million, to promote energy and carbon audits, and improve energy efficiency.

The Port of Hong Kong – download the full report here.

Case Study: Hong Kong

The Port of Hong Kong has been a leading Asian seaport for more than a century and a top container port for more than three decades. Between 2001 and 2006, Hong Kong container throughput increased by 32 percent from 17.8 million to 23.5 million TEUs. Containerized cargo in Hong Kong now represents about 74 percent of Hong Kong’s total cargo throughput. In 2006, Hong Kong was the second largest container port in the world, although it is likely that it was surpassed by Shanghai in 2008. The port is served by 80 international shipping lines with over 450 container liner services per week to over 500 destinations worldwide. The port is managed by the Marine Department of the Hong Kong Special Administrative Region (SAR), the local government for the city.

Hong Kong is located in the Pearl River Delta, which includes other cities and container ports, including the Port of Shenzhen, the world’s fourth largest container port. Container traffic at Shenzhen has also steadily risen recently, to 18.5 million TEUs in 2006 compared with 5.0 million TEUs in 2001. Together, in 2006, the Hong Kong and Shenzhen ports accounted for 9.5 percent of global container volume, making the Pearl River Delta the largest container handling region in the world. Cargo throughput is expected to grow. A study commissioned by the Hong Kong Transport and Housing Bureau estimates that, by 2030, Hong Kong will handle between 39 and 43 million TEUs.

Air quality in the Hong Kong is generally poor and levels remain much higher than the World Health Organization’s air quality guidelines. Since 1990, emissions of all air pollutants have risen dramatically.

Sulfur dioxide and nitrogen oxides doubled and particulate matter showed over a 90 percent gain. In 2006, Civic Exchange, a nonprofit public policy research organization based in Hong Kong, published a report, Marine Emission Reduction Options for Hong Kong and the Pearl River Delta Region, which found that local vehicle and marine emissions are the dominant source of air pollution in Hong Kong during prevailing wind conditions that exist about one-third of the year.

Governments and other stakeholders in the maritime sector have already implemented some positive measures including the promotion of low sulfur fuel use by marine vessels and port vehicles, the use of electricity to power port machinery and the reduction of fuel consumption through efficiency measures. These measures in themselves have not been sufficient to reduce port emissions on a scale necessary to protect public health, but pressure to take more ambitious action is growing.

In February and March 2008, Civic Exchange sponsored two workshops for stakeholders involved in port environmental issues. The working group for the workshop included four stakeholder groups: oceangoing vessel operators, port operators, local craft harbor operators and land vessel operators involved in port activities. The stakeholder groups all endorsed government incentives to encourage green technologies and to pay the incremental cost of ultra low sulfur diesel fuel compared to lower grade conventional fuels. They also supported increased research and development of advanced technologies for marine applications, pursuit of shore power use by berthed ships and the creation of a low emission area subject to IMO regulations.

The recommendations of the working group were used by Civic Exchange in the development of its July 2008 report, Green Harbours: Hong and Shenzhen — Reducing Marine and Port Related Pollution. The report’s five key recommendations are as follows:

• In the short term: Foster greater regional collaboration across borders, port and marine sectors
• In the medium term: Develop a comprehensive green ports strategy and related policy measures to create the regulatory and planning framework for implementing green port policies
• Develop cleaner fuels initiatives to encourage the use and availability of cleaner fuels
• Expand training programs for industry employees to encourage proper equipment operation to ensure efficient operation
• Conduct additional port related research to identify new green port projects suitable for Hong Kong

Hong Kong is responding to the increased recognition of the role of port activities in the city’s environmental problems. In June 2008, Hong Kong ratified the MARPOL Annex VI marine fuel quality standards as a Special Administrative Region of China recognized at the IMO separately from the national government in Beijing, which had already ratified the agreement. It plans to go beyond the new IMO regulations by applying fuel quality standards to local shipping as well as international commerce
regulated by the IMO.

Emissions from ships in Hong Kong harbor are regulated by the Marine Department. Ships in the harbor now use 5,000 ppm sulfur fuel. The ferry system will start running a trial using 50 ppm sulfur fuel early next year. Assuming the results are positive, political leaders seem committed to continue its use in ferries, but not to expand it to other craft without the cooperation of other cities in the Pearl River Delta mooring local marine craft.

The Hong Kong Shipowners Association (HKSOA) was very active during the few years of debate before the MARPOL Annex VI Amendments were adopted in October 2008, says Arthur Bowring, Managing Director of the group. The HKSOA represents more than 100 shipping companies that own more than 1,100 ships. “Environment is our biggest single challenge,” adds Bowring, referring to shipowners.

The Environmental Protection Department (EPD) is the chief air pollution regulatory agency in Hong Kong for landside emission sources, including all types of motorized vehicles. “Marine emissions are a new issue for us,” notes W.C. Mok, Principal Environmental Protection Officer.206 There are currently no regulatory standards that apply to offroad cargo handling equipment at ports. Onroad trucks fueling in Hong Kong are required to buy diesel fuel containing only 10 ppm sulfur, but when refueling takes place across the border with mainland China, they are subject only to a 500 ppm sulfur cap. Since most trucks delivering containers to Hong Kong pick up their cargo at mainland factories, most diesel fuel burned in Hong Kong is the higher sulfur content grade.

The 10 ppm fuel is much more expensive, even with an exemption from sales taxes offered by Hong Kong. The EPD is currently studying the technical feasibility of using compressed or liquefied natural gas in heavy duty vehicles. It will examine the results in 2009. The EPD is also studying options to reduce air pollution from cargo handling equipment at container ports.

As government agencies assess regulatory options, several private container terminal operators are moving ahead to deploy hybrid electric rubber tire gantries (RTGs). Seventeen hybrid electric RTGs were deployed at Container Terminal 4 owned by Hong Kong International Terminals (HIT) in 2008. They are the first step in a $18 million (U.S. dollars) program to equip 81 RTGs with hybrid electric drivetrains, about 70 percent of HITs total fleet. The hybrid RTGs are fitted with lithium ion batteries that provide power to help lift containers. The batteries are recharged by regenerative braking energy generated during the lowering of containers and from a generator powered by the onboard diesel engine.

In October 2008, Modern Terminals Ltd. signed a contract with Kawatoyo Electric Company Ltd., the sole agent for Yaskawa Group Port Crane System, to convert 44 RTGs with hybrid electric drivetrains at its terminal in Hong Kong by mid-2009. The drivetrains are being developed by Yaskawa Electric Corporation. They use ultracapacitors as the onboard energy storage technology.

The Modern Terminals Da Chen Bay Terminal 1 at Shenzhen already uses hybrid electric RTGs. The terminal is the first to convert its entire RTG fleet to hybrid electric drivetrains. Modern Terminals associate company, Taicang International Container Terminal, is currently converting its fleet at the Port of Shanghai to hybrid electric RTGs.

In other programs at Shenzhen, Shekou Container Terminal (SCT) is installing auxiliary generators onboard its entire fleet of 78 RTGs by the end of 2010 at the port of Shekou. It is also installing rail mounted gantry cranes (RMGs), which are quieter, last longer, and are 20 percent more efficient than conventional RTGs. By the end of 2008, SCT plans to install 16 RMGs. Another initiative is studying the use of using hybrid technology or LNG yard tractors.

Yantian International Container Terminals (YICT) is the largest port in Shenzhen, handling 10 million TEUs in 2007. YICT has converted 12 of its 200 RTGs from conventional to hybrid electric drivetrains, and plans to switch another 60. The RTGs are equipped with supercapacitors, which are yielding a 25 percent energy savings by capturing and reusing energy released as containers are lowered to the ground. Anticipating shoreside power, YICT has started installing infrastructure works and is studying power converter technology before implementing this new technology. It is also promoting rail transportation from the port on its dedicated rail line. Each train can transport 50 containers in one journey, making them more efficient and cleaner than trucks.

Container Shipping Ports Clean Alternative Fuels Gains

New Air Pollution Study Reports Clean Alternative Fuels Gains at Top U.S. and International Container Shipping Ports

BOULDER, Colo., Feb 25, 2009 (BUSINESS WIRE) — U.S. and international container shipping ports are among the world’s biggest sources of air pollution and greenhouse gas emissions, because of their reliance on diesel fuel for goods movement. But progress toward reducing harmful emissions by switching to clean alternative fuels is gaining momentum worldwide, according to a new research study, “Container Ports and Air Pollution,” published by Energy Futures, Inc. The study found that natural gas is currently the leading alternative fuel for goods movement at U.S. container ports, while hybrid electric vehicles are gaining popularity in Asia.

The 77-page report presents findings from a 10-month-long study that included on-site visits to evaluate air pollution control efforts at top container ports in the U.S., Europe and Asia. The new Energy Futures study updates and expands on a report titled “U.S. Container Ports and Air Pollution: A Perfect Storm,” which was published in February, 2008. That study identified environmental protection alternative fuel programs at each of the Top 10 U.S. container ports, including their use of natural gas, biodiesel or hybrid electric vehicles.

James S. Cannon, President, Energy Futures. Inc., said, “A key premise of our studies of air pollution in the container shipping industry is that alternative fuels offer viable options for use in goods movement operations to replace polluting fuels that are derived from oil. These clean-burning fuels are known to work well in port goods movement, and there is great promise that they can be more widely used in the shipping supply chain.” Mr. Cannon unveiled the new report to an international audience in a speech today at the GreenPorts 2009 Conference in Naples, Italy.

Overall, the new Energy Futures report is a “call to action” that asks decision makers to increase alternative fuel use to protect public health and environmental quality in port communities when they formulate policies designed to maintain port growth.

Included in the new report are updated profiles that showcase air pollution control efforts at the Ports of Los Angeles and Long Beach, CA; the Port of New York and New Jersey; the Port of Savannah, GA; the Port of Oakland, CA; the Port of Hampton Roads, VA; the Port of Seattle, WA; the Port of Tacoma, WA; the Port of Houston, TX, and the Port of Charleston, SC. Case studies at the Port of Rotterdam, the Netherlands, and the Port of Hong Kong are also included.

The research clearly shows that 2008 was the busiest year yet for innovative new environmental efforts, particularly at the top U.S. container ports. Many ports are taking action to reduce the pollution they generate through alternative fuel and advanced technology programs. In 2008, for example, regional truck programs were launched at the three California ports — Los Angeles, Long Beach and Oakland — that are expected to deploy thousands of natural gas-powered goods movement trucks during the next few years.

Cannon explained that the U.S. is the largest importer of containerized goods, yet the millions of containers handled at U.S. ports annually comprise only about 10 percent of the global container trade. The study documents significant progress during 2008 in environmental programs affecting international goods movement. Most importantly, the London-based International Maritime Organization (IMO) adopted amendments to regulations governing air pollution from ships.

The IMO revisions call for a progressive reduction in the global sulfur cap on bunkerfuel, from the current limit of 45,000 parts per million to 5,000 parts per million. “The bunkerfuel that powers most ships is the dregs of oil refining,” Cannon said. Typically, container ships burn bunkerfuel when idle in port, to provide for their electrical needs.

“Switching entirely from bunkerfuel to natural gas to power container ships would significantly lower emissions,” he said. “Particulate matter pollution has been shown to decline 70 percent, while nitrogen oxides fall 72 percent and sulfur dioxide emissions are virtually eliminated when bunkerfuel is replaced by natural gas.”

Europe’s largest container port, located in Rotterdam, the Netherlands, manages an extensive array of programs designed to reduce air pollution from container handling. For example, the port is studying the use of natural gas as a fuel for hundreds of barges that daily carry containers to inland destinations.

In Asia, the study’s review of port clean-up efforts included Singapore, Hong Kong and Shanghai. Onsite Energy Futures researchers found several port programs involving the use of alternative fuels and advanced propulsion technologies. Various applications of electrical energy are the current alternatives of choice in the region.

“Air Pollution and Container Ports” is available for downloading at no charge at

About Energy Futures, Inc.

Founded in 1979 to study energy and related environmental issues in the transportation sector, Energy Futures publishes the quarterly international journal “The Clean Fuels and Electric Vehicles Report,” and the bimonthly newsletter “Hybrid Vehicles.” James S. Cannon, President of Energy Futures, has studied alternative transportation fuels since 1986 and is the author or editor of six books on the topic, more than a dozen reports and over 50 professional papers. His most recent book, “Reducing Climate Impacts in the Transportation Sector,” was published in October 2008. He also researched and wrote the 2008 report, “U.S. Container Ports and Air Pollution: A Perfect Storm.”

SOURCE: Energy Futures, Inc.

Tax Break Set For Electric Vehicles

February 25, 2009 – Environment

The First Registration Tax exemption for electric vehicles will be extended five more years to promote their use. The exemption is due to expire March 31, but will be extended five years instead of three years as in the past.

In his 2009-10 Budget today Financial Secretary John Tsang said promoting the use of vehicles which are more energy efficient and emit no exhaust will create business opportunities.

He will lead a steering committee to study their wider use in Hong Kong, conduct in-depth studies and make recommendations from the perspectives of economic development, town planning, industry, technology, environmental protection and transport.

The Government will study the feasibility of jointly promoting electric vehicles with manufacturers, and be actively involved in testing them to introduce them into the local market early.

“We will also consider introducing such vehicles into the government fleet when the related technology has matured and the vehicles are available on the market,” Mr Tsang said.

The Government will study the feasibility of providing recharging facilities in public multi-storey car parks and explore ways of encouraging the business sector, including property developers and private car park operators, to set up such facilities.

Saving energy

Noting buildings account for 90% of Hong Kong’s total power consumption, Mr Tsang said the Environment & Conservation Fund will allocate $450 million for private building owners to conduct energy- carbon audits and energy efficiency improvement projects. More than 1,600 projects will be subsidised.

Another $450 million will be allocated to conduct minor works in government buildings in the next two years to install energy-efficient lighting, retrofit plumbing with water-saving devices and incorporate energy-efficient features in air-conditioning, elevator and escalator systems.

Going green

In the coming year Greening Master Plan projects undertaken by the Civil Engineering & Development Department will cover the whole of Hong Kong Island and urban Kowloon.

Landscaping features will be provided on 500 old slopes and greening work on the rooftops of 40 government buildings through additional funding for minor works. Schools and other non-profit-making organisations will also be subsidised to conduct greening work.

Mr Tsang said Hong Kong will co-operate with Guangdong to transform the Pearl River Delta region into a green and quality-living area with a cluster of high-tech, low-pollution and low-energy-consumption cities.

“We will further develop regional high-tech recycling industries, and encourage enterprises to adopt advanced technologies for cleaner production, energy saving and emission reduction,” Mr Tsang said, noting promoting a green economy will enhance Hong Kong’s overall competitiveness and make it a more liveable city.

Hong Kong To Invest Heavily In Green Economy

HK to invest heavily in ‘green economy’

Staff reporters – Updated on Feb 25, 2009 – SCMP

The government would invest hundreds of millions of dollars making Hong Kong a greener city and a better living environment, Financial Secretary John Tsang Chun-wah said on Wednesday.

“Promoting a ‘green economy’ would enhance Hong Kong’s overall competitiveness as well as making it a more livable city,” he explained.

Mr Tsang sketched out plans for promoting more energy efficient buildings, beautifying the harbour front and introducing electric vehicles.

The financial secretary pledged to extend exemption for electric vehicles from First Registration Tax for a further five years, until March 31, 2014.

“Promoting the use of electric vehicles will create additional business opportunities. We will be actively involved in vehicle tests conducted in Hong Kong with a view to introducing electric vehicles into our market,” said Mr Tsang, who will lead a committee to study the wider use of electric vehicles.

Mr Tsang said the government would also study the possibility of jointly promoting electric vehicles with manufacturers.

To promote more energy-efficient buildings, HK$450 million would be allocated over the next two years to install energy-efficient systems in government buildings.

An additional HK$450 million has been earmarked for private building owners to conduct energy audits and improvement works.

“We expect to subsidise more than 1,600 projects,” he said. “This will also create business opportunities for related sectors.”

The financial secretary said Hong Kong would extend existing areas of co-operation with the Guangdong provincial government to improve the environment.

“This is to turn the region into a cluster of high-tech, low-pollution and low-energy-consumption cities. We will also further develop regional high-tech recycling industries, and encourage enterprises to adopt advanced technologies for cleaner production, energy saving and emission reduction,” he said.

Return Of Diesel Passenger Cars

Dealer sees big problem

Anita Lam and Cheung Chi-fai – SCMP – Updated on Feb 23, 2009

Environmentalists and academics cautiously welcomed the likely return of diesel passenger cars, but a luxury-car dealer said it would be fortunate if his company could find a model that matched the new emissions standard by the end of this year.

Chong Got, managing director of Audi’s distributor, Premium Motors, said Audi’s factory in Europe would produce 20 diesel engine models this year meeting the Euro-V diesel emissions standard. However, they expected only one could meet the emissions standard of a Euro-V petrol car.

“It is not impossible to impose a petrol car’s emission standards on a diesel car. The problem is whether the manufacturers would want to alter the engines for you when their efforts mean only a boost in sales of several hundred more vehicles.”

In September, Volvo said it had created a Euro-V diesel engine as clean as Euro-VI. Bluetec, a green technology for luxury performance vehicles introduced by Mercedes-Benz, meets even the most stringent Californian diesel emissions standard, but the configurations do not match the requirements in Hong Kong.

Crown Motors, the dealer for Daihatsu, Lexus and Toyota, is also searching for qualified models, with a sales manager saying the company would try Europe if it failed to find anything in Japan.

Edward Lau Che-feng, director of Friends of the Earth, said it was time the public and government adopted an open mind towards diesel cars with the latest emissions-control technology. However, the government should increase the phasing out of outdated diesel vehicles at the same time. “Let us be open-minded … we might fine-tune our strategy, giving more weight to a car’s fuel efficiency and climate-friendliness without significantly compromising air quality,” he said.

Dennis Leung Yiu-cheung, a mechanical engineering professor at the University of Hong Kong, believed that the most advanced diesel cars would have minimal additional impact on air quality. “There should be little problem, as most private cars are not used as frequently as diesel buses and trucks,” he said.

Drive To Get Fuel-Efficient Diesel Cars Back On Roads

Motor traders in global hunt for model to match standards

Anita Lam and Cheung Chi-fai – SCMP – Updated on Feb 23, 2009

Diesel-driven cars may soon return to the streets of Hong Kong – and in a much cleaner and environment-friendly form, after being phased out in favour of petrol engines over a decade ago, motor traders say.

They have started a global hunt for the right diesel model after the environmental watchdog introduced what they called an “improved flexibility in vehicle emissions standards” last month.

The new standard has led to some enthusiasm among the traders badly hit by the economic downturn as they expect diesel vehicles to be popular among cost-conscious drivers who will benefit from diesel prices lower than petrol.

The traders said diesel engines were also a third more fuel-efficient than petrol ones, emitted less carbon dioxide, were more durable and could generate greater power.

The Environmental Protection Department (EPD) recently rejected suggestions from the Hong Kong Motor Traders Association that Euro V emissions standards be adopted for diesel cars to facilitate imports, as diesel standards still lagged behind those for petrol cars.

But the department has since dropped its insistence that imported diesel cars meet the latest Californian standards and associated testing procedures – adopted in Hong Kong in 2006 – which motor traders have said were “virtually unattainable”.

And it has said it is also prepared to accept diesel cars which meet or surpass Euro V emissions standards for petrol cars. The same applies to diesel cars which meet the Japanese emissions standard for 2009.

The department has become more flexible in its requirements because the Euro V petrol car standards, with tightened curbs on nitrogen oxide emissions and new limits on particulate matter, have become broadly equivalent to Californian standards.

“It is still a very difficult task for us to find a diesel car that matches the standard of a petrol car, but there is a chance now at least that we can find something as we are now talking about configurations of European and Japanese vehicles, not the American ones which are totally different from ours,” Michael Lee, chairman of the Hong Kong Motor Traders Association, said.

Diesel engines have in the past been unwelcome because of their pollution potential – smoky emissions with high levels of particulate matter known as a major health risk.

Diesel engines also generated high levels of smog-inducing nitrogen oxides.

To discourage their use, the government adopted the most stringent Californian standards from 1998 and now imposes vehicle licence fees on diesel vehicles up to 37 per cent higher than on petrol ones.

But Hong Kong Automobile Association vice-president James Kong Yat-hung said the lower running cost of diesel cars would be attractive as the economy worsened. “It’s not only that diesel is cheaper than petrol, but diesel engines are also about 30 per cent more energy-efficient and durable than petrol engines,” he said.

Diesel fuel costs HK$8.07 a litre, which is 38 per cent cheaper than petrol. Since late 2007, the government has also cut tax on diesel by half to 56 cents a litre.

The EPD has said it would consider offering a tax concession on clean-running diesel cars – similar to that now offered to high-achieving petrol cars for outstanding environmental performance.

The petrol-car concession is a 30 per cent cut in first-registration tax, or up to HK$50,000, if the vehicle emits half the emissions allowed under Euro IV standards and is 40 per cent more fuel-efficient than other cars of the same weight.