China: Hubei ETS compliance deadline postponed

Chinese cement firms under Hubei's carbon market will be forced to spend millions of yuan to meet targets as authorities rejected pleas for leniency, but they now have more time to do so after the postponement of Friday's deadline, Reuters reports citing traders.

Initially the 138 companies covered by the Hubei scheme, a third of which are cement firms, were supposed to hand over permits by 31 May 2015. The deadline was extended to 10 July, but 27 companies had still not got enough permits by the end of Friday, the Hubei Emissions Exchange said in a statement.

"It will be postponed again because big companies haven't finished trading," a trader told Reuters. No details were available on a new deadline.

Last month, cement firms asked regulators to let them borrow some permits from next year's quota, saying they could not afford to buy permits to cover their obligations for 2014. But their request was rejected, traders said.

Huaxin Cement, Hubei's biggest cement producer, has been under particular pressure over the past few days as it had a shortfall of 1.15 million permits. "Local officials have talked through the consequences of non-compliance with cement factories, so Huaxin approved a CNY40m (US$6.44m) budget to pay for permits," said a trader with direct knowledge of the matter. The exchange said Huaxin had met its compliance obligations by the end of Friday's trade.