Hubei is likely to have to postpone the May 31 compliance deadline for participants in its carbon trading scheme as the provincial government has failed to finalise annual allocation numbers, Reuters reported.
According to Hubei ETS rules, the provincial Development and Reform Commission (DRC), shall make adjustments to the amount of permits allocated every year based on verified emissions data, submitted in March.
But only days ahead of the deadline, the 138 emitters covered by the scheme have not been informed by the government about the results of the adjustment, Reuters reported, citing industry sources.
As a result, the compliance deadline is likely to be pushed back by about a month, it said.
The Hubei market was launched in March last year, and this is the scheme’s first compliance process. Several of the other Chinese pilot markets had to make similar postponements last year.
The DRC issued some 324 million permits when the market launched, but is expected to revise down the number after going through the verified emissions data due to the slowing economy and falling coal consumption, which most likely put a dent in Hubei’s CO2 emissions last year.
The unclear outcome of the adjustments has hit trading activity in the market, which is normally the most liquid of China’s pilot schemes.
Last week, only 97,000 permits changed hands, compared to well over 200,000 permits in most weeks.