The annual compliance process is causing challenges for China’s pilot carbon markets again for a second straight year, with at least three of the seven schemes pushing back deadlines.
Chongqing, Hubei and Tianjin will all postpone the deadlines for emitters to hand over permits to cover last year’s emissions, illustrating the accommodations scheme regulators are willing to make to keep compliance rates high.
Hubei, the biggest of the three, was scheduled to carry out compliance by May 31, but a delay of around a month now seems inevitable as the government has yet to notify companies of their final allocation figures, which are being revised after the firms submitted verified emissions data in March.
“There is no public announcement, but it is certain the compliance will be postponed until June,” one Hubei-based trader told Carbon Pulse.
Tianjin has also pushed back the deadline by a month, Reuters reported Wednesday.
The agency cited an official with the Tianjin Climate Exchange, who said the government had notified companies about the new end-of-June deadline. The decision has not yet been publicly announced.
The reason for the delay is that verification of emissions covered under the scheme will only be finalised this month, leaving the government needing more time to make final calibrations to the system.
Meanwhile, the government in Chongqing, the least liquid of the pilot markets, announced yesterday it was ready to start receiving permits from complying firms, but said the deadline to surrender was now June 23, a few days later than the June 20 date it had previously announced.
Like Hubei, Chongqing is going through its first compliance process. Even though its ETS did not launch until June 2014, Chongqing’s caps were backdated to Jan 1, 2013, meaning emitters in that scheme must next month hand over two years’ worth of emissions permits.
Last year, most of the then five operational markets had to delay their compliance deadlines, primarily because short companies struggled to buy what they needed in the market as most potential sellers were either nervous to be seen offloading free permits or simply weren’t interested in participating.
By Stian Reklev – stian@carbon-pulse.com
