Residents of the Kornos and Pyrga area outside Nicosia, including monks from Stavrovouni monastery, held a peaceful protest outside parliament on Wednesday against the installation of an asphalt recycling and producing unit.
House environment committee chairman Adamos Adamou said the studies conducted appeared to ignore nearby residents.
The unit in question, he said, would emit a gas that is the main cause of lung cancer.
Adamou said although the environmental study showed that all precautions were in place, it had been conducted by the company which applied for the permit to set up the unit.
Government departments pledged not to issue any permits as long as the matter was being discussed in parliament.
The area is already located near a quarry which has been operating for more than 30 years.