EU countries battled Tuesday over the bloc's new laws to fight climate change, arguing over the future of the combustion engine and how much cash was needed to aid the most vulnerable in the green transition.

Environment ministers from the EU's 27 member states are trying to agree a joint position on five legal texts that could bring a historic shift to the bloc's energy policy.

The texts are key parts to the EU's ambition to reduce CO2 emissions by at least 55 percent by 2030 from 1990 levels, in line with the Paris climate accord.

Italy, home to car companies Fiat, Ferrari and Lamborghini, led a group of EU nations trying to win a five-year delay to the EU's plan to phase out cars powered by fossil fuels by 2035.

Auto export powerhouse Germany meanwhile was seeking to make room for carbon-neutral fuel, which is for now undeveloped, but could be given an exception when the ban kicked in.

The auto sector, like the oil industry, has great hopes for synthetic fuels. Although they are for the moment undeveloped, they could be exempted when the fossil fuels ban kicks in.

"We need a strong and rapid reduction in CO2 emissions, but we also need to remain open about technologies," said German Environment Minister Steffi Lemke.

But the use of this technology in cars is contested by environmental NGOs, which say it is expensive, energy-consuming and a potential source of toxic fumes

France holds the EU's rotating presidency, and is seeking to find a compromise position on the several pieces of legislation that will then face bruising negotiations at the European Parliament.

Another bone of contention is a so-called Social Climate Fund that would help shield consumers and companies from price shocks after the carbon market is expanded to heating and transport.

The carbon market is the centrepiece of the EU's CO2-cutting strategy, with consumers and firms expected to pay a price for their carbon footprint.

Eastern european countries are defending a bigger budget to help cushion the blow, while richer countries such as the Netherlands and Germany want a smaller fund and the spending targeted towards innovation.

France has proposed a compromise, reducing the fund from the European Commission's original proposal of 79 billion euros ($83 billion).

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'Greenwashing': a new climate misinformation battleground
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