Setback for EU's climate change plans as deal on carbon pricing collapses

Parts of flagship green agenda sent back to committee but 2035 ban on new petrol and diesel cars passes

The EU's Fit for 55 climate package was put to the vote in the European Parliament on Wednesday. EPA

The EU has suffered a setback to its flagship climate change plans after political factions failed to agree on levying more punitive costs on polluters.

A deal to bring transport and commercial buildings under the umbrella of a pay-for-pollution scheme fell apart on Wednesday, as environmentalists accused their rivals of sabotaging the plans.

Amid acrimony in the European Parliament, Green MEP Michael Bloss said right-wing politicians had “massively scaled down” the proposals by pushing through amendments that would have prolonged free allowances for companies.

As a result, the Greens teamed up with left-wing parties to vote down a package they regarded as compromised, and “the negotiations have to start again from scratch,” Mr Bloss said.

The centre-right European People’s Party said it supported the EU’s green ambitions but that some free allowances were needed to protect jobs.

“We will not make the climate transition if we destroy jobs and industry in Europe,” the party said. “What happened during the votes today is what happens when pro-Europeans do not work together sufficiently.”

This surprise setback led to votes being cancelled on other parts of the EU’s climate agenda, known as Fit for 55 because it is meant to bring about a 55 per cent cut in emissions by 2030.

The longer-term aim is to reach net zero carbon emissions by 2050 and limit global warming to 1.5ºC above pre-industrial levels, as envisaged by the Paris Agreement.

Other EU proposals include a carbon border tax, meant to transform global trade by encouraging exporters outside the bloc's borders to reduce their carbon footprint.

The parliament’s environment committee is expected to meet next week to reconsider carbon pricing after the failure to find a consensus.

MEPs did agree on one of the most prominent Fit for 55 measures — a proposed ban on new petrol and diesel cars by 2035.

The measure passed by 339 votes to 249 at the session in Strasbourg, France, and essentially limits future sales to emissions-free, all-electric models.

“This is how the combustion engine joins the steam engine at the scrapyard of history,” said left-wing MEP Monika Benova.

Approval by the relatively weak parliament is only one step on the EU’s legislative journey. A final deal would have to be negotiated with the bloc’s 27 governments and the European Commission.

Peter Liese, the centre-right MEP with the job of steering the carbon pricing reform, complained that the parliament had ceded the initiative to the 27 national capitals.

"It is a bad day for the European Parliament," he said.