04/16/2013 05:57 EDT | Updated 06/16/2013 05:12 EDT

EU lawmakers voting on tightening cap-and-trade system to make carbon pollution more expensive

BRUSSELS - European lawmakers are set to vote on whether to tighten the bloc's carbon emissions trading system and make pollution more expensive for companies.

The outcome of the vote in the European Parliament in Strasbourg Tuesday was uncertain after the leading centre-right bloc said it would veto the changes to spare businesses from rising costs at a time of economic crisis.

The European Union cap-and-trade system — the world's biggest — was introduced in 2005 in the hope of forcing industries to reduce emissions and invest in greener technologies. But the system is now in jeopardy because prices for emission licenses have dropped significantly amid lower-than-expected demand.

The EU Commission, the 27-nation bloc's executive arm, is proposing to tighten the supply of allowances, which would increase their price.