The city's two electricity producers will need to cut prevailing emissions of key pollutants by up to 60 per cent to comply with tighter caps by 2017, according to environmental guidelines announced yesterday.
CLP Power and Hongkong Electric have called the task "challenging" and CLP also warns of a possible sharp rise in tariffs in the next few years.
The new limits are set out in a new technical memorandum gazetted yesterday, under which annual emissions from the companies will be capped, from 2017, at 10,399 tonnes of sulphur dioxide, 25,950 tonnes of nitrogen oxides and 750 tonnes of respirable suspended particulates.
This will see emissions of the three pollutants cut by 17 per cent, 6 per cent and 10 per cent respectively from 2015 targets, according to the Environmental Protection Department. Compared to 2010 levels, the cut will be about 60 per cent, 40 per cent and 40 per cent respectively.
"To find ways to meet the tightened 2017 caps - which require a further significant reduction from the 2015 levels, given no new capital equipment and no increase of gas usage are expected - CLP will have to rely on a stable supply of low-emission coal with consistent properties which could not be assured in the very volatile coal market," CLP said in a statement.
It added: "The fuel cost for electricity generation will significantly increase in the next few years with substantial pressure on tariffs."
The power supplier said emissions from the power generation sector had dropped in recent years and "roadside and marine had now become the major sources of emissions".
Hongkong Electric also released a statement urging the government to devise a long-term gas generation policy "because of the long lead time required and low flexibility in sourcing natural gas supply".
Friends of the Earth yesterday welcomed the move but warned the government to guard against power companies making use of the emission caps as an excuse to raise tariffs.
"We appreciate that the use of more clean fuel could lead to higher costs and thus higher charges," said Frances Yeung, Friends of the Earth's senior environmental officer. "We believe it is important for the government to promote energy saving."
The department was satisfied that both companies could tighten emission caps further if they continued to use low-emission coal while maximising their natural-gas-fired generating capacity.
The memorandum is expected to be tabled in the Legislative Council on Wednesday. This is the third memorandum by the government to control emissions from power plants. The others were in 2008 and 2010.
The first set emission allowances from 2010 to 2014, while those listed in the second will come into effect from 2015. In 2010, power generation accounted for half the emissions of sulphur dioxide, a quarter of nitrogen oxides and 16 per cent of respirable suspended particulates.