Hong Kong Financial Secretary John Tsang has proposed to set up a HK$300m ($38.7m) fund to encourage transport operators to test green and low-carbon technologies.

The Pilot Green Transport Fund is part of the fiscal year 2010-11 budget and is aimed at cutting carbon emissions and promoting a low-carbon economy.

“I hope the transport industry will actively try out innovative green technologies, contributing to better air quality and the health of people living in Hong Kong,” Tsang said.

Tax deduction for capital expenditure on environmentally friendly vehicles has also been proposed, which would allow companies a 100% profits tax deduction in the first year, according to news.gov.hk.