France, Germany nearer to cars CO2 deal-diplomats

BRUSSELS, April 9 (Reuters) - France and Germany are making progress on finding a common position over proposed new European Union limits on carbon dioxide (CO2) emissions from cars, diplomats said on Wednesday.

"There are signs that they are very near to an agreement," one of the diplomat said, speaking on condition of anonymity.

The European Commission, as part of its plans to fight climate change, has proposed legislation to reduce CO2 emissions from cars and steep fines on manufacturers that fail to comply.

It wants cars to meet an average limit of 120 grams of CO2 per km by 2012.

Car producers want at least three more years to meet the target, saying the cost of meeting the deadline would undermine their ability to compete globally.

German companies, such as Porsche (PSHG_p.DE: Quote, Profile, Research), BMW (BMWG.DE: Quote, Profile, Research) and Mercedes-Benz (DAIGn.DE: Quote, Profile, Research) are lobbying especially hard against an early deadline, because they produce luxury models with higher emissions than many other cars.

But French carmakers, which make smaller vehicles, stand to find it relatively easy to hit the Commission's targets.

As two major car-making countries, any deal agreed between Germany and France would probably become the position of all the EU member states, the diplomat said.

Details of the French-German talks were not available.

EU environment ministers are due to discuss the issue when they meet in Slovenia on Friday and Saturday. (Reporting by Darren Ennis and Yves Clarisse, writing by William Schomberg; Editing by Paul Bolding)