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HKEX inks MOU with China exchange

Hong Kong Exchanges and Clearing (HKEX) has signed a memorandum of understanding (MOU) with the Guangzhou Futures Exchange (GFEX) to develop carbon neutrality products.
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The MOU is the first collaboration between the two exchanges to promote sustainability, facilitate the development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), and to support China’s goal of reaching carbon neutrality by 2060.

“Reflecting our China anchored strategy, HKEX will work with GFEX to explore new opportunities to drive the development of a green and low-carbon market in the region, and progress innovations to further the opening-up of China’s futures market,” said Nicolas Aguzin, HKEX’s chief executive officer, in a statement on Friday.

These include exploring the feasibility of cooperation on developing carbon neutral-related products in both onshore and offshore markets.

Both exchanges will also work together in areas such as clearing, technology, and collaborate on marketing and investor educational efforts, according to the HKEX announcement.

The GFEX was set up in April as the fifth futures exchange in China, with a mandate to develop carbon futures, electricity futures, climate-related products, commodities index futures, and other “green-linked” commodities contracts.

The establishment of the exchange was first announced in February 2019 as one of the signature projects in the GBA plan. Its founding shareholders include HKEX, which has an RMB210m ($32.5m) stake, or 7% of the mainland exchange. Other shareholders include four other onshore exchanges, and China’s largest insurer, Ping An Insurance Group.

China is now the world’s largest carbon emitter and primary energy consumer, accounting for 30% of the globe’s greenhouse gas emissions. Yet the world’s largest manufacturer has set an ambitious goal to achieve peak carbon emissions by 2030 and carbon neutrality by 2060.

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