German industry gives lukewarm welcome to CO2 deal

BERLIN (Reuters) - German industry groups gave a lukewarm welcome on Tuesday to an agreement reached by Paris and Berlin on cutting average carbon dioxide emissions for new cars.

The BDI industry group said Chancellor Angela Merkel had strongly defended German industrial interests in her talks with French President Nicolas Sarkozy on Monday in Bavaria, where the deal was announced after months of wrangling.

"It's not an optimal but an acceptable solution," BDI Managing Director Werner Schnappauf said.

Merkel had called the agreement to jointly support a European Commission goal to limit EU car emissions to 120 grams per km on average from 2012 an "important breakthrough".

Carmakers said they welcomed the inclusion of a transition period until 2015 and were pleased that ecological innovations, such as energy-efficient air conditioning systems or solar technology installed on car roofs, would be taken into account.

"The proposal is not ideal but better than the one from the European Commission," Matthias Wissmann, president of the VDA car lobby group, told Tagesspiegel daily.

The VDA lobby represents German car makers Volkswagen, BMW and Daimler and other companies.

Germany's opposition Greens party sharply criticized the proposal, accusing Merkel of putting carmakers' interests before environmental concerns.

Berlin and Paris had been trying to reach a compromise on burden-sharing on carbon dioxide (CO2) reductions for months.

Germany was concerned that planned EU rules would put its luxury automobile industry at a disadvantage. Germany has an enduring love affair with big, high-powered cars and no national speed limit on its motorways.

French manufacturers, which make smaller vehicles, stood to find it relatively easy to hit the Commission's target.

(Reporting by Jan Schwartz; editing by Sue Thomas)