"I say here very clearly that I do not believe it would be right to sacrifice the well-founded climate goals of the European Union," Merkel told parliament during a debate on the federal budget.

Merkel is in talks with EU partners on a climate plan that aims to cut greenhouse emissions by 20 percent from their 1990 levels by 2020.

A compromise may be reached on the issue during an EU summit in Brussels in mid-December.

The current text calls for some energy-intensive industries pay for pollution rights starting in 2013.

Nearly 10,000 European companies currently benefit each year from free emissions rights when they exceed authorised pollution levels and some countries have called for diluting the EU plan until the economic crisis has passed.

Making companies pay for those rights is contested in Germany, which is still home to several heavy industries, in particular chemicals.

An unpublished economy ministry report leaked to the German press Tuesday said Germany could lose more than 100,000 jobs if the EU makes industries pay for pollution rights that are free at present.

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