China has already launched seven pilot regional trading schemes, and promised to roll out a nationwide market

By Muyu Xu and David Stanway

BEIJING, May 25 (Reuters) - China may need to cut the number of sectors to be covered by a long-awaited nationwide carbon trading scheme due to start this year, with the launch facing delays amid unreliable data and other regulatory problems, a government researcher said.

China, the world's biggest emitter of climate-warming greenhouse gas, has already launched seven pilot regional trading schemes, and promised to roll out the nationwide market as part of pledges made ahead of the 2015 Paris climate change agreement.

The national emissions trading platform was originally scheduled to begin in the first half of 2017 and would initially force firms in eight industrial sectors to buy permits to cover emissions.

The eight sectors were petrochemicals, chemicals, building materials, iron and steel, non-ferrous metals, paper-making, power generation, and aviation. But market designers are struggling to build a fair and reliable statistical system to cover all firms.

"Data reporting requires a foundation, especially for firms in remote areas whose statistical and monitoring abilities are inadequate to deal with the challenges of the carbon market," He Jiankun, director of the Institute of Low Carbon Economy at Tsinghua University, told Reuters on Thursday.

The National Development and Reform Commission (NDRC) was planning to exclude sectors like steel and chemicals and will focus initially on industries with stronger "statistical foundations", including power, cement and aluminium, the 21st Century Business Herald newspaper reported.

"There is a possibility that China may select some sectors other than the original eight to launch carbon trading in the preliminary stage," said He, also a researcher with the State Council, China's cabinet.

The market launch has also been impeded by an imperfect "support system" enabling third-party verifiers to audit carbon emissions of such a large number of firms, as required by NDRC rules, He said on the sidelines of a climate meeting.

Xu Dingming, State Council consultant and vice chairman of National Energy Expert Consulting Committee, said the obstacles largely come from local officials, many of whom do not understand what carbon trading is.

"There are also Mr. Trumps in China who disagree about reducing carbon emissions," he added.

While China and the European Union have supported the Paris agreement, U.S. President Donald Trump has been undoing former President Barack Obama's Clean Power Plan, keeping a campaign promise to support the coal industry.

China has promised to bring greenhouse gas emissions to a peak by "around 2030" as part of commitments made before Paris. (Full Story)

"It is likely that China will fulfil the carbon emission target in advance," said He.

(Reporting by Muyu Xu and David Stanway; Editing by Manolo Serapio Jr.)

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