MEPs vote down key part of EU climate plan

The European Parliament voted Wednesday to reject a key reform of the EU carbon trading system, in a surprise setback to Brussels' climate plans, while narrowly backing a ban of new CO2-emitting vehicles by 2035.

The EU has vowed to cut greenhouse gas emissions by 55 percent by 2030, but Green and socialist MEPs judged the plan to expand carbon trading insufficiently ambitious.

The legislation 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 foresees 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 project.

The EU Commission last year unveiled plans to stop the sale of vehicles using internal combustion engines.

The measure passed by 339 votes to 249 with 24 abstentions at the session in Strasbourg -- in practice limiting future sales to emissions-free all-electric models.

Cars currently account for 12 percent of all CO2 emissions in the 27-member EU bloc, while transportation overall accounts for around a quarter.

The conservative European People's Party (EPP), the parliament's biggest group of lawmakers, had sought to push a compromise that would have diluted the proposals and allowed sales of hybrid vehicles to continue.

- Fast as possible -

There were fierce recriminations following the carbon trading 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 by rejecting its quick passage.

"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.

The chairman of the parliament's environment committee, centrist MEP Pascal Canfin, said two more votes on parts of the package would be put on hold until carbon trading is settled.

"It is an unexpected situation but we are going to manage," he told reporters, vowing that the committee would get to work on a compromise text right away.

"We know what we have to do, we will do it as fast as possible... This deal could be made this afternoon, could be made in two weeks, in July, I don't know yet."

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.

An amendment pushed by the conservative party the EPP would extend a system of free quotas to businesses to 2034, delaying the full start of the import tax.

The legislation 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 step backwards compared to the 67 percent voted in the environment committee.