Corrects the company’s name to Zhongtan Nengtou Tech Co and not Zhongchuang Nengtou Co in paragraph 5. Clarifies in paragraphs 5-6 that each company was not subject to all government charges. SinoCarbon comments in paragraph 7.

BEIJING, (Reuters) – China’s environment ministry has criticized firms that falsify carbon data. This is part of China’s effort to improve data quality in preparation for expanding its national emission trading system into other industrial sectors.

These findings were published Monday following a campaign by the Ministry of Ecology and Environment in October and December last year. It was designed to verify the accuracy of the carbon emission verifications submitted throughout the country.

The MEE stated Monday that accurate and reliable data are crucial for the efficient and standardized operation of carbon emissions trading markets.

China is the largest greenhouse gas emitter in the world. In July 2013, it launched its delayed national emission trading system (ETS). However, Beijing and the participants in the ETS remain concerned about the accuracy and transparency of the emissions data.

Zhongtan Nengtou Tech Co, data verification firm was charged with making false coal samples and “tampering or forging test reports”, according to the MEE. Liaoning Dongmei Testing and Analysis Research Institute was also accused of tampering.

Two other companies, SinoCarbon Innovation & Investment Co and Qingdao Xinuo Renewable Co, were separately charged with “writing distorted and inaccurate conclusions”, the MEE said.

SinoCarbon stated that it has been firm in its belief that data quality was the key to the health of the carbon markets. “We will stand firm behind the MEE in its efforts to combat data fraud and further strengthen data disclosure,” said SinoCarbon.

Reuters couldn’t reach the companies via telephone immediately.

MEE said that the MEE will encourage the local environment bureaus in their investigation of the four companies and will also strengthen oversight and management for carbon verification businesses.

China currently has around 2,000 power sector companies in its ETS. These emit nearly 4.5 billion tons of carbon dioxide annually, 40% of China’s total.

In order to prevent a surplus market, the government will consider reducing carbon emission allowances for electricity utilities. Additionally it expects to broaden market coverage to include emissions from other industries such as steelmaking.