Submission for the Public Consultation for the 2017 Policy Address and 2017-18 Budget

To: Policy Address and Budget Consultation Support Team,
Address: 24/F, Central Government Offices, 2 Tim Mei Avenue, Tamar, Hong Kong
Telephone: 2810 3768
Fax: 2147 5770

As the situation with the air quality of Hong Kong continues to deteriorate, and Hong Kong continues to lose out to competing countries such as Singapore in surveys and opinion polls on this subject, we urge the Hong Kong government to increase efforts in this respect. According to the Hedley Index, in 2015 there were 2,196 premature deaths, 146k hospital bed days and 3.5m doctor visits caused by air pollution. Total economic loss was HK$27.5 billion. We have the following suggestions for the 2017-2017 budget and 2017 policy address:

1. Purchasers of Electric Vehicles in Hong Kong currently enjoy a 100% exemption for First Registration Tax of new vehicles. This policy has been in place for more than 20 years now, but is due to expire on 31st March 2017. This policy is finally working, and recent years have seen a dramatic increase in the number of Electric Vehicles on our roads; replacing polluting petrol vehicles. As electric vehicles are still significantly more expensive than polluting petrol equivalents, we urge the government to simply renew the exemption for a further 3 years, to allow time for the cost of electric vehicles to come down. Before those 3 years are up, we also urge the government to introduce a clear timeline and plan for such tax incentives, as the current expire/renew cycle of uncertainty is harming confidence in the industry. It is important that the fledgling electric vehicle industry, as well as purchasers of the vehicles, have a clear commitment from government to support this growing trend.
We should heed the situation in Denmark as a warning sign: Since 1985, Denmark has had 0% new car registration tax for Electric Vehicles. In 2015, there were an average of 377 electric vehicles sold per month. Then, in 2016 the Danish government started a phased introduction of tax on electric vehicles (increasing 20% each year, up to 100% over five years). With just a first year 20% tax, so far in 2016 we have seen the average number of electric vehicles sold plummet to just 51 per month - 85% less than the previous tax-free year. It is clear that the market for electric vehicles is extremely price and tax sensitive at the moment. It is simply too soon to remove these incentives; which are required to balance the established and globally heavily subsidised, petroleum and internal combustion engine vehicle industries.

2. The single biggest issue facing electric vehicle users in Hong Kong is the lack of home apartment and workplace car park charging facilities. Vehicle owners are willing and eager to install chargers in their own home or office car parks, but the buildings management (BM) companies and owners corporations (OC) block such installations - in particular where the installations must interface or pass through common areas of the building. There is quite simply no incentive for BM or OC to permit such installations, and they see only risks and extra workload. Our Hong Kong Government has done a fantastic job for new buildings (with the GFA concession being tied to EV enabling car parks), but nothing substantial has been done for existing buildings.
The solution for home and office car park charging being increasingly adopted overseas is to provide either legislative or regulatory support for the owners of a car park to have the legal right to install an electric vehicle charging station in his own car park space (including the right to access common areas and facilities). Such rights are conditional on aspects such as registered contracts being used, third party liability insurance coverage obtained, all costs being borne by the car park owner, and there being sufficient electrical power for the installation. We urge Hong Kong to adopt such a framework. We also urge government to consider the introduction of a fund for EV enabling existing buildings. Such a fund could be in the form of either cost sharing or interest free loan. The fund would be used to kickstart the process of enabling installation of EV charging facilities in existing buildings by incentivising BM and OC to be early adopters (thus able to take advantage of the fund) rather than continue delaying (as the fund will run out after its term expires).

3. On the subject of public charging, the government car parks around Hong Kong provide electric vehicle charging facilities. Such facilities are not dedicated to electric vehicle charging (so that the car park spaces are taken by petrol vehicles and unavailable to electric vehicles). We urge the government to dedicate those spaces to electric vehicle charging and to continue the deployment of medium speed chargers to government facilities.

4. Several countries around the world are now announcing commitments to ban the sale of internal combustion engine vehicles. This sends a strong message to the industry, and a timeline for the transition to sustainable transportation. We urge the Hong Kong Government to also announce a date at which time first registration of internal combustion engine vehicles will not be permitted. Perhaps 2030.

5. Electric Vehicles, while reducing roadside emissions to zero, are still affected by the cleanliness of the electricity grid used to power them. We urge the government to continue in its commitments to reducing emissions (both RSP and CO2), by moving to a more sustainable and renewable fuel mix. Local power companies (CLP and HKE) must be incentivised to move to a cleaner fuel mix, and to support alternative methods of supplementing the grid. In particular, a feed-in-tariff must be introduced, and support provided, for private solar/wind facilities. CLP and HKE must be incentivised to support such facilities. The lack of solar/wind power in Hong Kong is deplorable; especially given the success and growth of this elsewhere around the world. Hong Kong has fallen woefully behind in this respect, and changes need to be made now to support this.

We thank our government for its policy support for electric vehicles and a cleaner environment. We trust that this support will continue, and indeed be strengthened.

Charged Hong Kong
Registered Hong Kong society (#54000) Registered charity #91/14340