"The president believes that there is a need for legislation to meet the targets which are set by the Commission, namely the 120 grams per kilometer that has been discussed here on occasion, by 2012," she told a regular media briefing.

"This target is not being called into question, but the president wants to use the coming days to reach a compromise on the best ways to reach this target."

The EU executive said on Monday it had delayed proposals on curbing CO2 from cars by "a couple of weeks" because of disagreement over whether industry targets should be binding.

It had been due to present its proposals this Wednesday.

But a clash between Environment Commissioner Stavros Dimas, who supports a binding cap on CO2 emissions by motor vehicles, and Industry Commissioner Guenter Verheugen, who opposes binding legislation, has blocked the proposals from going forward.

Despite opposition from the powerful auto industry that generates one of every seven German jobs, Germany's environment and transport ministers called for mandatory EU guidelines to stem output of the greenhouse gas.

BINDING LIMITS

"Voluntary curbs by the industry have failed. Now we need clear and legally binding targets," Environment Minister Sigmar Gabriel, a Social Democrat in conservative Angela Merkel's coalition cabinet, told the EU parliament.

"The automobile industry must make a greater contribution to lowering emissions," SPD Transport Minister Wolfgang Tiefensee told reporters, adding: "We will not be able to get around having binding legal limits."

But he proposed having different ceilings for different classes of cars so that a blanket set of rules would not put the squeeze on German premium carmakers such as BMW, Audi, DaimlerChrysler or Porsche.

Conservative Economy Minister Michael Glos also opposed blanket rules and was more circumspect about EU limits:

"We must ensure that the Commission does not deliver targets on reducing car emissions that would be tough for Germany to fulfill," he told an energy conference in Berlin.

Carmakers in Europe have a voluntary agreement to reduce CO2 emissions from new cars to an industry average of 140 grams per km by 2008, but they are set to miss that target. Asian manufacturers have until 2009 to meet the voluntary target.

Dimas has said repeatedly that he would propose binding legislation that would require car makers to reduce CO2 emissions of new cars sold in the 27-nation EU to an industry average of 120 grams per km in 2012.

Carmakers have urged Brussels not to impose CO2 limits, saying politicians had failed to shift taxation to foster clean cars at a time that consumers did not want to pay more for fuel efficient cars and had no financial incentives to do so.