Conservative MEPs have been accused of betraying British business after the European Parliament narrowly rejected a proposal by the European Commission to delay the auctioning of greenhouse gas allowances to avoid a further drop in the price of carbon.
Carbon prices in the UK currently leave UK manufacturers paying more for their electricity than their EU competitors and the EU plans would have reduced that gap. But a vote in the European Parliament in Strasbourg on Tuesday April 16th was lost by 334 to 315.
Lib Dem MEPs backed the Commission proposal, which follows coalition government policy, but the votes of many Conservative MEPs against it were crucial in ensuring the plans were rejected.
The vote puts UK manufacturing industry at a disadvantage compared to Germany or the Netherlands.
The European Emissions Trading Scheme (ETS) was originally introduced to encourage investments in low carbon technologies by putting a price on polluting greenhouse gas emissions.
West Midlands MEP Phil Bennion, Transport spokesman for the Liberal Democrat (ALDE) group in the European Parliament, commented after the vote:
"British Tory MEPs have today voted to wreck the EU Emissions Trading Scheme. Their votes to reject the Commission's proposals undermine a key mechanism for boosting green technology and green jobs and will damage efforts to get a global climate change agreement.
"The ETS is far from perfect - we need to look at long term solutions through carbon floor pricing within international agreements - but it was crucial today to keep ETS functioning.
"At the moment, there is an oversupply of carbon permits, and unless these are mopped up, there is no incentive for businesses to embrace low-carbon technologies."
North West MEP Chris Davies, the environment spokesman for the Liberal Democrat (ALDE) group in the European Parliament, added :
"MEPs have turned their back on the future. Conservative MEPs determined the outcome and showed their contempt both for the needs of British industry and the climate change policies of the coalition government.
"Concern about the dire financial situation faced by many countries has taken precedence over the desire for Europe to develop new low carbon technologies. By refusing to endorse the Commission's proposals I fear that MEPs have betrayed Europe 's long term economic interests."
The leader of the Lib Dem delegation in the European parliament and European energy spokesperson, Fiona Hall MEP, concluded:
"At the point where China and the US are getting serious about tackling climate change and countries around the globe are introducing their own emission reduction schemes it goes completely against common sense for the EU to effectively abandon its own initiative instead of working to improve it."
The Commission proposals have now been referred back to the Environment Committee. The Commission has said it will 'reflect' upon the decision.
Carbon prices in the UK leave UK manufacturers paying more for their electricity than their EU competitors and the EU plans would have reduced that gap.
Notes to Editors:
The following 16 out of 27 Conservative MEPs co-signed the Kohola amendment to reject the ETS backloading proposal: Callanan, Girling, Yannakoudakis, Kirkhope, Chichester , Fox, Foster, Ford, Hannan, Campbell Bannerman, Bradbourn, Andreasen, McClarkin, Ashworth, Tannoch, Macintyre.
For further information on last ditch attempts to convince Conservative MEPs to vote in favour of the proposals: