By Daphne Psaledakis
LUXEMBOURG (Reuters) - European Union nations will seek a compromise on Tuesday over how ambitious to be on cutting vehicle emissions and climate goals for U.N. talks, with Germany warning that targets that are too tough risk harming industry and costing jobs.
In a clash between concerns over the environmental risk of emissions and industry competitiveness, EU environment ministers meeting in Luxembourg are divided over what 2030 carbon dioxide limits to impose on Europe's powerful carmakers.
In the wake of a U.N. report calling for rapid and unprecedented change to contain global warming, many ministers back a 40 percent reduction in emissions, in line with climate targets backed by EU lawmakers last week.
"Everyone is calling for action after the report from climate experts," French Environment Minister Francois de Rugy said.
But two EU sources said some EU nations appeared to be siding with a less ambitious reduction in emissions.
Germany, with its big auto sector, backs an EU executive proposal of a 30 percent cut for fleets of new cars and vans by 2030, compared to 2021 levels.
"After the IPCC report yesterday that is not easy, but it is a position we all agreed on," Germany's Svenja Schulze said.
TOO CLOSE TO CALL
Climate campaigners say Germany has still not learned to be tougher on the auto industry despite the scandal that engulfed Volkswagen <VOWG_p.DE> in 2015 when it admitted that it had masked exhaust emissions using software in as many as 11 million diesel vehicles worldwide.
EU sources said Germany, with the backing of eastern European nations, might have enough votes to secure a majority at the meeting among the bloc's 28 nations.
Austria, which holds the EU's rotating presidency, has proposed a compromise of a 35 percent reduction in emissions.
"It's too close to call," said Greg Archer, an expert with Brussels-based campaign group Transport & Environment.
If they reach an agreement, talks on the final law could begin with the EU's two other lawmaking bodies as early as Wednesday.
The new rules will also create a crediting system that would allow carmakers to lower their CO2 targets by meeting a benchmark for selling zero- and low-emission vehicles as a share of their total new car sales.
Curbs on the transport sector, the only industry in which emissions are still rising, aim to help the bloc meet its goal of reducing greenhouse gases by at least 40 percent below 1990 levels by 2030.
Extreme temperatures across the northern hemisphere this summer fuelled concerns that climate change was gathering pace, leading dozens of countries to call for greenhouse gas emissions to be cut at a faster rate than planned.
But a call by the EU's climate commissioner and others for the bloc to pledge to cut emissions by 45 percent as part of the Paris Agreement has met resistance.
The draft text for Tuesday's meeting in Luxembourg, seen by Reuters and which will serve as the EU's position for U.N. climate talks in Poland in December, says the level of reduction remains an outstanding issue among member states.
Rasing it would require the approval all 28 nations. That may be too complicated to achieve before the U.N. talks, European Commission Vice President Maros Sefcovic told Reuters.
The EU is likely exceed its Paris pledge to reduce emissions by 40 percent from 1990 levels, he added, following a reform of the bloc's Emission Trading System (ETS) and new targets set on renewable energy and energy efficiency.
"We do not need new legislation on this one because everything is already done. We are just going to get better results than expected," Sefcovic told Reuters on Monday.
(Reporting by Daphne Psaledakis; Additional reporting by Peter Maushagen and Alissa de Carbonnel in Brussels; Editing by Emelia Sithole-Matarise and Edmund Blair)