The German government has submitted a compromise proposal in an attempt to resolve a dispute with the European Parliament by the end of the month on stricter emission limits for carmakers, according to a person close to the matter.

The dispute pits the continent's efforts to curb carbon emissions against the competitiveness of German automotive companies, whose exports of luxury vehicles are a significant part of the backbone of the German economy.

The EU seeks to force carmakers from 2020 to only produce vehicles that emit an average of less than 95 grams of carbon dioxide per kilometer, although the emissions target differs by manufacturer.

Germany in particular has been seeking more flexible terms for vehicles that emit more pollution via "super credits", or allowances--a scheme that would see additional more carbon-friendly electric or hybrid cars being made to offset the production of the more polluting vehicles.

The European Parliament, one of the two European legislators, has so far in the debate rejected the saving-up of super credits to allow carmakers to bank low-polluting vehicles against their total output, so according to the person familiar with the matter, Germany now wants to limit super credits to cars made between 2017 and 2020.

According to Germany 's proposal, carmakers would then be able to use the accrued credits after 2020, but must commit to reducing additional emissions of its conventional vehicle output on a staggered basis until 2023.

The person familiar with the matter said Germany 's proposal has initially been well received, even by opponents of the point-saving scheme.

However Thomas Ulmer, the member of the European Parliament who leads compromise-negotiations with EU member states, told Dow Jones Newswires he is "unsure whether the parliament could go along with that."

The EU parliament wasn't immediately available to comment Monday.

The EU's efforts are part of its pledge to trim greenhouse-gas emissions by 20% below 1990 levels by 2020.

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