UPDATE 1-In pollution fight, China highlights Shandong province's deception

(Writes through with statement from environmental ministry)

BEIJING, Dec 27 (Reuters) - China pointed its finger at local officials in Shandong, one of the country's most industrialized provinces, for deceiving authorities to evade capacity cuts in the polluting coal, steel, aluminum and chemical sectors.

In a statement late Tuesday, the Ministry of Environmental Protection (MEP) said Binzhou city, China's aluminum smelter hub, used fake certificates and false data to win approval for 2.4 million tonnes of new aluminum capacity in 2014.

The environmental watchdog also said Rizhao Steel, a major producer, continued to run a mill with 5.94 million tonnes of capacity after it had been due to shut in 2015.

MEP said all the issues with Binzhou and Rizhao had been resolved by the end of October this year, but not did not give details.

The sharply-worded statement came after the central government sent teams of inspectors to Shandong, Jilin, Zhejiang, Hainan, Sichuan, Qinghai, Tibet and Xinjiang in August and September. A total of 40,706 incidents of environmental damage were uncovered.

The singling out of companies in a specific province will serve as a warning to officials of the potential consequences of not falling into line with Beijing's mandated capacity cuts.

President Xi Jinping said in October that fighting pollution was one of China's key tasks through 2020. Beijing has vowed to reduce air pollution across 28 northern cities this winter.

Since August-September, more than 10,000 companies in Shandong were fined a total of 100 million yuan ($15.3 million) by inspectors, MEP said.

Some 1,268 officials in the eastern province have been held accountable for cases of environmental damage, MEP said in the statement.

Shandong ranked 18th among 31 provinces and regions in China's first "green development" index released on Tuesday, which listed regional governments that promote environmentally friendly development.

Local officials in Shandong lack awareness of environmental issues, according to the MEP statement.

"Of the 757 issues raised by local officials during discussions with MEP inspectors between 2013 and 2016, only three were related to environmental protection," MEP said.

Air quality in Shandong was in a "severe situation" last year, it added.

The Shandong Environmental Bureau did not immediately respond to a Reuters request for comment.

An official at Rizhao Steel said the company had not received any notification from the authorities on any further moves. He declined to be named as he was not authorized to talk to the media.

Closures of steel plants, coal mines and aluminum smelters in northern China have roiled commodities market since the start of 2016, leading to a spike in prices.

Apart from shuttering polluting factories, China also plans to roll out nationwide by 2020 a system that forces polluters to repair damage to the environment or pay compensation.

($1 = 6.5562 Chinese yuan renminbi) (Reporting by Meng Meng, Muyu Xu and Ryan Woo in Beijing and Ruby Lian in Shanghai; Editing by Peter Graff and Richard Pullin)