UPDATE 1-EU agrees to cut car emissions in climate fight | Industries | Consumer Goods & Retail | Reuters

The European Commission, which originates EU laws, had envisaged the full cuts to carbon dioxide by 2012, mindful of droughts, violent storms and rising sea levels foreseen with climate change.

But Germany fought hard for BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz) and Mercedes (DAIGn.DE: Quote, Profile, Research, Stock Buzz), which will now be able to produce their biggest, luxury gas-guzzlers until 2014, protecting jobs and export earnings.

France and Germany had already sketched out a rough deal in May, which Britain signed up to in October after winning special treatment for specialist marques Aston Martin and Jaguar.

Europe's other big car-making nation, Italy, joined the trio last month after winning concessions for Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz) and its Maserati and Ferrari sports cars.