BEIJING, July 10 (Reuters) - China's Tianjin has extended the deadline for its biggest carbon producers to comply with the city's emissions trading scheme a second time, giving companies two more weeks to hand over permits to the government.
The delay is the latest in a string of hiccups as governments and company officials in seven regions running emissions schemes gather experience in carbon trading, Beijing's favoured approach for reducing greenhouse gases.
The 114 energy and industrial firms covered by the Tianjin market, were supposed to hand over permits to cover for their 2013 emissions on Thursday.
But the deadline has been extended to July 25, the Tianjin Climate Exchange announced, as the government needs more time to make final adjustments to permit allocations to companies whose 2013 emissions varied significantly from what had been expected.
Power and heat facilities were given 90 percent of their allocated lots last year. How much of the final 10 percent they will actually receive will be decided by their verified emission reports for 2013.
The permits will be issued next week, and could increase overall market supply.
Trading in the Tianjin market has increased slightly in recent weeks, but the total volume traded since the market began last December has only reached around 250,000 permits, of around 160 million permits that could be offered, indicating that demand is low.
The price rose to its highest level in March, when permits traded at 50 yuan ($8.07), but has since fallen to around half that.
"Tianjin gave out permits to manufacturers based on historical emission levels," said one expert involved in the allocation process who wished to remain anonymous.
"The government has no plan to take back surplus permits unless they have closed down their business," the expert added.
Observers have proposed the government tightens the cap for 2014 to incentivise emission cuts, but the government has yet to announce how many permits will be handed out for this year.
Trading of 2014 permits will start on July 28, the Tianjin Climate Exchange said Thursday.
The extension follows delays elsewhere in the country.
The compliance date for the Beijing scheme was June 27, but the municipal government has yet to release any data. However, market sources say some 50 companies have yet to hand over permits to the authorities.
In Shenzhen, four companies missed a July 1 deadline, but according to news provider Crystal Carbon, three of those have now bought the permits they needed to meet their targets.
Guangdong province has extended its deadline to July 15. The local government has announced that by July 8, 69 percent of scheme participants had surrendered permits.
Shanghai is the only region where compliance has gone according to plan, with all emitters meeting the June 30 deadline. (Reporting By Kathy Chen and Stian Reklev; Editing by Joseph Radford)
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