Environment Minister Juergen Trittin of the Greens party and Economy Minister Wolfgang Clement of the Social Democrats announced the end of the clash after a crisis meeting lasting more than five hours at the chancellery.
It was urgent for Berlin to end the conflict within the government as Germany has to inform the European Commission of its stance on the matter by Wednesday.
A first crisis meeting on Sunday had failed.
Under the national plan for emission quotas called for by the European Union, it was decided to cut German industry's emissions of carbon dioxide to 503 million tonnes a year by 2007 and to 495 million tonnes by 2012, the two ministers said.
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