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Germany Shows No Sign of Bending on EU Car Emissions Law

* Compromise agreement was reached in June

* Most EU carmakers and member states happy with rules

* Delay could be long as EU institutions change next year

By Barbara Lewis

LUXEMBOURG, Oct 14 (Reuters) - Germany showed no sign of backing down in its campaign to block European rules on capping car emissions which it argues would cost jobs and damage its premium auto makers, as EU environment ministers met to debate the topic on Monday.

The European Union reached a deal in June to limit emissions from all new cars to 95 grams per kilometre from 2020. But Germany has refused to accept it and has attempted to win the support of other member states to delay the measure.

Most EU carmakers are happy with the new rules. But analysts say Germany's premium carmakers Daimler and BMW , which produce heavier and less fuel-efficient vehicles than those from firms such as Italy's Fiat, would find it very challenging to meet the emissions target.

EU environment ministers are debating the topic in Luxembourg on Monday, but are not expected to reach agreement. Heads of state and government could return to the issue at a summit in Brussels later this month, EU sources said.

"It's not a fight over principles but how we bind the necessary clarity in climate protection with the required flexibility and competitiveness to protect the car industry in Europe," Germany's Environment Minister Peter Altmaier said.

"I am convinced we can find such a solution. We can find it in the next weeks," he said.

"It's not important whether we agree a few days earlier or later but that we find a solution that is carried by a broad majority of member states."

Environmentalists and consumer groups, representing motorists who want to pay less for fuel, say an overwhelming majority of member states had already backed the compromise reached in June on introducing more efficient, lower-emission cars.

Valentinas Mazuronis, the environment minister of Lithuania - holder of the EU presidency - said he was working to find the best solution on "a really sensitive issue".

Sweden's Environment Minister Lena Ek said further delays could delay adoption of the rules until 2015 because of impending European Parliament elections next year and the appointment of new commissioners.

Germany would bear "a very heavy responsibility", she told reporters.

AS well as seeking to protect its carmakers, Germany also wants to avoid the car emissions law complicating its decision on forming a new governing coalition.

The German Greens are strongly in favour of cutting CO2 to 95 grams per kilometre, but Chancellor Angela Merkel and her conservatives support the German carmakers who are opposed to the deal. (Additional reporting by Tom Koerkemeier, Claire Davenport in Brussels and Markus Wacket in Berlin; Editing by Pravin Char)