STRASBOURG — Brussels’ efforts to fight climate change hit a roadblock in the European Parliament on Wednesday. 

Months of careful compromise-building came crashing down in a dramatic series of plenary votes, when left-wing lawmakers rejected a proposal for reforming the EU’s carbon market rather than see it watered down, forming an unexpected majority with the far-right.

MEPs then referred the reform and two related texts back to committee to hammer out a new agreement.  

The move is likely to delay progress on parts of the EU’s mammoth package of climate legislation — known as Fit for 55 as it seeks to slash the bloc’s emissions by 55 percent this decade — though several MEPs said they would aim to rework the proposals within weeks. 

The chaotic session, which saw emotions run high, also laid bare a key split between political camps, with a conservative coalition seeking to protect industry from significantly stricter climate measures and a left-leaning bloc balking at a slower pace of decarbonization. 

Growing concerns over placing too high a burden on Europe’s industry had prompted liberal and center-right MEPs to depart from an ambitious carbon market reform approved by Parliament’s environment committee last month, and even center-left lawmakers weakened their stance on some elements on the related carbon border tax. 

But in Wednesday’s session, the center-right European People’s Party — whose lawmaker Peter Liese had led work on the reform — sided with other right-wing groups to pass amendments carving out even more generous protections for industry. 

“They took their support from the right and expected us to greenwash it,” said Jytte Guteland, a lead lawmaker from the center-left Socialists & Democrats (S&D), Parliament’s second-largest group. “Amendments rolled in and turned loopholes into black holes … it was too much.” 

Blame game

Ahead of the vote on Liese’s final report, S&D leader Iratxe García called for a three-minute break to consult with her group — and the mood in the plenary grew tense as MEPs thumped their desks in anticipation of a dramatic shift.

The S&D, the Greens and The Left then joined with parts of the right and far-right climate skeptics, a sprinkling of centrist MEPs and even four EPP lawmakers, to vote down Liese’s report by 340 to 265 votes.

“It is rejected,” Parliament President Roberta Metsola announced, sending roars of upset and triumph echoing across the chamber.

Within seconds, lawmakers launched into a political blame game. 

“This is a bad day for the European Parliament,” Liese said amid shouts and jeers from other lawmakers. “It’s a shame. The far right and the Socialists and the Greens voted together.” 

Greens leader Philippe Lamberts said the EPP had only itself to blame. “You can’t improvise” after spending months building cross-party compromises, he said. 

Greens MEP Jutta Paulus accused the EPP of striking deals with “Nazis.” 

Emma Wiesner, who had worked on the carbon market reform for the centrist Renew Europe group, expressed disappointment with both the right and the left. “We’re losing so much momentum now,” she said. “And for what? I’m not sure we’ll gain much from postponing it.”

Policy differences

The heart of the split between groups is the level of “ambition,” meaning the amount of greenhouse gas emissions the reforms would reduce. 

The environment committee had adopted a left-leaning position that envisaged slashing emissions in sectors covered by the bloc’s Emissions Trading System by 67 percent this decade, up from the Commission’s proposed 61 percent. The carbon market is a key tool for Brussels’ climate efforts as it governs about 40 percent of the EU’s emissions.

The committee also wanted to phase out free carbon credits for industry — effectively a pollution subsidy — by 2030 once the EU’s carbon border tax is up and running.

But with majorities for those positions looking razor-thin, Parliament’s largest groups struck two half-deals to water them down. The S&D and Renew Europe last month agreed to push back the phaseout of free credits to 2032 in a nod to Parliament’s conservative factions. 

The EPP and Renew at the same time agreed to a 63 percent target for the carbon market reform, although — to the S&D’s dismay — they also wanted a somewhat weaker one-off removal of carbon credits from the ETS than the Commission had proposed. Left-wing MEPs worried that would result in more emissions in the short term, calling it a “red line.”

But what prompted the most uproar in the chamber was the EPP’s decision to side with right-wing lawmakers and the industry committee on an even later 2034 phaseout of free credits, a position Europe’s steel and cement makers had lobbied for — even after the S&D had backed the 63 percent target.

The feeling of betrayal was palpable among center-left MEPs.

“It was worse than we expected,” said Guteland. “They didn’t honor the compromises.” 

Besides the ETS reform, MEPs also referred the interlinked proposals for establishing a carbon border tax and a Social Climate Fund — meant to shield low-income households from the costs of the energy transition — back to the environment committee. 

French centrist Pascal Canfin, who chairs the committee, sought to stress that it was only some details that needed ironing out. 

“We know what we have to do,” Canfin said, “and we will do it as fast as possible.”

Parliament on Wednesday did approve stricter emissions rules for planes and cars. It also voted to increase the EU’s carbon sequestration capacity, although MEPs rejected the environment committee’s higher target.