The European Union agreed on Monday a compromise over how sharply to curb carbon dioxide emissions from cars and vans, finally settling differences between car-producing countries and more environmentally conscious lawmakers.

"We reached a compromise to cut emissions from cars by 37.5 percent and vans by 31 percent by 2030," European energy chief Miguel Arias Canete said in a tweet.

The EU has been divided for months over how strict to be on CO2 emissions from cars and vans. Germany, with the bloc's biggest auto sector, has warned that tough targets could harm industry and cost jobs.

Representatives of lawmakers in the European Parliament of the 28 EU countries have held several rounds of talks together with the European Commission designed to find common ground and ended after six hours early on Tuesday, EU diplomats said.

The EU executive initially proposed that emissions decline by 30 percent by 2030, compared to 2021 levels.

Germany backed that plan, but a push by several EU countries, including the Netherlands and France, raised the target for cars to 35 percent. There is also an intermediate target for 2025.

European Parliament lawmakers voted in October in favour of a 40 percent reduction by 2030 and an intermediate target of 20 percent by 2025, drawing howls from the car industry.

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EU diplomats said the targets remained a problem.

The targets to curb emissions from the transport sector, the only industry in which emissions are still rising, are aimed at helping the bloc reach its goal of reducing greenhouse gas emissions overall by 40 percent by 2030.

European Union countries were among nearly 200 that agreed on rules for implementing the 2015 Paris climate accord.

EU countries are separately considering the extent to which truck emissions should be cut, with a debate due on Thursday.