The vote, conducted on Thursday (10 July) midday, was rejected 37 votes to 35.
Palmer said he and his senators voted against the legislation because amendments made by PUP to force power companies to pass on savings from the repeal had not been submitted to Parliament for scrutiny, claiming they had been "double-crossed".
"[The savings legislation] was to be circulated by the time Parliament had come in and it hadn't been circulated and our senators hadn't been told and they were left in the dark," he said.
"Fortunately we've discovered that and [the senators] were able to become aware of it so I've just met with them down there and their view was that under no circumstances they would be voting for the carbon tax repeal."
Further delay should be avoided: industry
Meanwhile Innes Willox, Chief Executive Australian Industry Group said the roadblock merely 'delayed the inevitable'.
“A majority of the Senate has committed to carbon tax repeal. But it is very important to avoid further unnecessary delay," Willox said.
"The cost and complexity of unwinding the tax goes up as each day passes.
"Any further amendments intended to ensure that carbon savings are passed on should be carefully scrutinised.
"Amendments that drag in the broader business community would be unworkable and cause regulatory mayhem, particularly as so many businesses have absorbed the carbon price and not passed it on to their customers."
