BRUSSELS, Feb 13 (Reuters) - Members of the European Parliament remain divided over an overhaul to the carbon market after a debate in the assembly on Monday, EU sources said, setting the stage for a tight vote on the reforms later this week.
Lead policymakers spoke in defence of a compromise deal reached between the key parties in December, warning that any moves to pick it apart risked delaying the long-awaited reforms, which are due to come into effect in 2021.
The European Union's market for carbon credits, essentially tradeable permits allowing industry to pollute, has suffered from excess supply since the financial crisis, depressing their prices and heightening the need for reform.
But lawmakers have been divided over how to balance greater cuts in greenhouse gases with the desire to provide protection for energy-intensive industries.
Comparing the compromise deal to block-stacking game Jenga, Scottish Conservative Ian Duncan said that any effort to pick the deal apart could lead to the collapse of the whole thing.
"As you pull out each block, just remember, if that tower topples, we have to rebuild it," said Duncan, who is shepherding reforms of the EU's Emissions Trading System (ETS) through the assembly.
The Parliament's Environment Committee in December backed a reform that called for a faster removal of surplus carbon permits from the ETS from 2021 than the EU executive's proposal.
The aim is to match the EU's Paris Agreement climate pledge to cut emissions by 40 percent by 2030 compared to 1990 levels, and there are also provisions to minimise the risk of European industry relocating to avoid climate regulation.
If the reform proposal fails to pass Wednesday's vote, it will delay the start of negotiations with member states to finalise the legislation.
Thomson Reuters carbon analysts said that would be bearish for prices but that market reaction to the vote will probably be short-lived.
Reporting by Alissa de Carbonnel; Additional reporting by Susanna Twidale; Editing by David Goodman