Part 2: Policy Instruments to Bridge the Gap Between Voluntary Action and Systemic Low-Carbon Procurement
As highlighted in Part 1 of the series, the contrasting policy landscapes in Hong Kong and Mainland China (one being market-driven and the other government-led) reveal critical gaps in scaling low-embodied-carbon construction. While voluntary initiatives have sparked early innovation, systemic change demands robust, enforceable policies to drive procurement of low-carbon materials like EAF steel and GGBS concrete. Drawing from RESET’s Sectoral Roadmap to Scaling Low Carbon Construction in Hong Kong and Mainland China, this article focuses on the policy pillar, outlining a phased trajectory for regulatory development, potential instruments tailored to regional contexts, and a roadmap for implementation.
How Should Regulations Evolve to Drive Low-Carbon Procurement?
Methodology of Review
In the Sectoral Roadmap report, RESET combined the primary response & data from industry stakeholders (covering developers, contractors, material suppliers, and industry associations across Hong Kong and mainland China) with a global policy scan of 15+ jurisdictions and quantitative benchmarking of embodied carbon intensities for key materials. The analysis also included a suitability assessment based on criteria such as regulatory maturity, market readiness, institutional capacity, and political feasibility. This mixed-methods approach ensured recommendations are regionally nuanced and actionable, bridging the gap identified caused by the current voluntary-dominant ecosystem in both regions.
A Phased Trajectory for Policy Progression
International best practices show that effective embodied carbon regulations follow a logical path: starting with disclosure to build data and capacity, progressing to benchmarks and incentives, and culminating in mandatory limits and market mechanisms. This progression ensures industry readiness, encourages innovation, provides policy stability, and enables scalable reductions.
Potential Policy Instruments for Demand and Supply Sides
Various markets and jurisdictions in the world agree on the need for driving embodied carbon reduction, while differing in pace and focus. Regions that are more mature in embodied management, such as Europe and North America, offer valuable lessons for advancing low-embodied-carbon construction in Hong Kong and China. In Europe, policies have evolved from voluntary frameworks to binding mandates, requiring whole-life carbon reporting. Countries like France enforce declining intensity caps, starting from residential buildings, as a more direct policy driver pushing for emission reductions. Beyond setting a building-level emission cap, Denmark also sets product-level requirements, including embodied carbon limits for concrete used in public works. North America focuses on procurement: California’s Buy Clean Act imposes embodied emission thresholds for steel and concrete in state projects, and Washington ensures transparency via mandatory emission footprint reporting requirements for emission intensive building materials.
What Policies Should Hong Kong and China Prioritise?
Suitability Assessment and Near-Term Recommendations
Barriers like voluntary disclosure and weak green public procurement (GPP) ambition underscore the need for mandatory measures. In our analysis, suitability of policy instruments was evaluated based on regulatory maturity, market dynamics, institutional capacity, and political feasibility. While longer-term tools like intensity caps offer transformative potential, data groundwork is a prerequisite and should be built via near-term priorities as outlined in the table below.
| Recommended Near-term Policy | Reasons for Selection | Implementation Rationale |
| Mandatory Building Intensity Reporting | Enables consistent performance tracking Enhances transparency and comparability Accelerates industry-wide LCA capability Serves as the foundation for establishment of future industry benchmarks and reduction targets | Existing frameworks for building embodied carbon accounting in HK & Mainland China provide a methodological foundation Easily implementable through existing planning approval and public works protocols |
| Green Public Procurement (GPP) – Mandatory Product Disclosure | Strengthens credibility and ambition of existing GPP policiesEnables higher accuracy in building-level reportingEncourages suppliers to improve production methodsPrepares ground for future material intensity caps | Builds on existing voluntary EPD pilots in Hong Kong and emerging national product-level accounting standards in Mainland ChinaEnables clearer evaluation and enforcement within public tenders |
| Incentives for Low-Embodied-Carbon Buildings | Proof of market acceptance for similar policy from existing GFA concession scheme for green building certifications (e.g. Hong Kong and Shenzhen) Drives voluntary compliance ahead of regulations Provides tangible value to developers and investors Spurs design innovation and material substitution Signals long-term policy direction | Builds on familiar mechanisms used in existing green building policies (e.g. GFA bonus for BEAM Plus ratings in Hong Kong; subsidies in Mainland pilot zones). Stimulates early adopters while avoiding punitive costs |
Near-Term Focuses for Policy Development
When defining the set of concrete next steps and key actors to drive these three recommended instruments towards a policy rollout, we considered multiple pathways to build momentum: top-down mandates from central authorities, bottom-up voluntary coalitions led by industry frontrunners, or hybrid public-private partnerships with shared governance.
Both the top-down and bottom-up approaches are problematic: the former risks delays from bureaucratic layering and industry resistance without prior buy-in, while the latter (i.e. purely voluntary coalitions) often lack enforcement teeth and scale slowly amid fragmented incentives.
After mapping these pathways against the regional policy environment, we concluded that a near-term taskforce comprising industry institutions (e.g. CIC), policy analysts (e.g. universities, BEC, RESET), and value chain partners (developers, contractors, material suppliers) offers the optimal balance: it ensures technical rigor, stakeholder alignment, and political legitimacy. This taskforce would serve as the engine to study baselines, design policy frameworks, and create the foundation required before formal legislation proposal can be responsibly introduced.
Focus areas with the corresponding next steps and key actors are outlined in the table below.
Source: RESET Carbon, October 2025, Sectoral Roadmap to Scaling Low Carbon Construction in Hong Kong and Mainland China, Table 4-3 Summary of Next Steps and Actors: Build Confidence
Why This Policy Focus Works: From Voluntary to Transformative
Prioritizing disclosure, GPP enhancements, and incentives overcomes voluntary inertia, creating demand signals for low-carbon procurement. When policies mandate verifiable performance, early investments become competitive edges, scaling EAF steel and GGBS concrete across the construction sector of both regions.
The window for early influence is open. Policymakers are encouraged to consider embodied carbon decarbonization opportunities and synergies between Hong Kong and China. Developers and contractors may find value in exploring voluntary WLCA submissions in upcoming tenders to build internal capacity. Suppliers could benefit from publishing carbon footprint data of core product lines, positioning themselves as preferred partners. Industry associations have a unique opportunity to host stakeholder forums that align on benchmarks and advocate for incentives. Together, these collaborative steps can turn policy ambition into procurement reality.
Key Takeaways & What’s Next
Policies balanced for practicality and ambition are essential to bridging gaps in Hong Kong’s market-led and China’s top-down approaches, fostering sustainable procurement of low-carbon materials. The phased roadmap ensures feasible, impactful implementation.
In Part 3, we assess the climate, economic, and social impacts of this sectoral roadmap.
If your organization seeks to influence or adopt these policies, contact our team to turn your ambition into action.
This article series is co-authored by Joanna Cheng and Nelson Tsui, RESET’s subject matter experts in buildings sector decarbonization.