The European Parliament voted Wednesday to reject a reform of the EU carbon trading system, in a surprise setback to the bloc's Green Deal climate plan.
The EU has vowed to cut greenhouse emissions by 55 percent by 2030, but Green and socialist MEPs judged the plan to expand carbon trading insufficiently ambitious.
The plan to expand the EU Emissions Trading System (ETS) to include carbon from transport and construction is a keystone of Brussels' entire climate package.
It also legislated the abolition of exceptions to the carbon trading scheme for European industry in exchange for a carbon tax on imports at the EU's borders.
The text will now go back to the parliament's environmental committee to be re-negotiated, in a severe blow to the European Commission's key legislative projectl, "A European Green Deal," first proposed in December 2019.
There were fierce recriminations following the vote, with conservative and liberal members accusing the socialists of allying with extremists to defeat the measure by 340 votes to 265.
The left in turn accused the right of watering down the plan in committee, forcing those seeking a more ambitious goal to make a stand.
"You can't seek support from the far-right to lower the level of ambition and then complain that we voted with them. You need to be coherent," declared socialist group leader Iratxe Garcia.
But Peter Liese, the centre-right MEP charged with steering the ETS reform, warned that MEPs had ceded the legislative initiative to EU member state capitals.
"It is a bad day for the European Parliament," he said.
In mid-May, the parliament's environment committee approved expanding the ETS after lengthy negotiations between the political blocs.
At the time the plan came to a vote, it stipulated that companies would have to pay for the CO2 emissions of their buildings and vehicles by 2030.
It also provided for a 63 percent reduction in emissions from sectors subject to the European carbon market by 2030 compared to 2005.
This was better than the target proposed by the European Commission, but a clear step backwards compared to the 67 percent voted in the environment committee.