But Mueller, an independent, said a more ambitious goal of cutting C02 emissions by 40 percent by 2020 - which the Greens party and parliament want - should be reconsidered because its pursuit could erode Germany's competitive position and cost jobs.

Presenting his ministry's "energy report" that predicts extra costs of 500 billion marks ($225 billion) to the economy by 2020 if the goal is pursued, Mueller annoyed the Greens, junior coalition partners in Chancellor Gerhard Schroeder's government.

Schroeder's Social Democrats criticised him, insisting Germany must remain a leader in environmental protection.

Germany was a main proponent of the landmark Kyoto treaty that requires developed countries to cut greenhouse gas emissions blamed for causing climate change by an average of five percent of 1990 levels by 2012.

Mueller said an open discussion on the consequences of the 40 percent target was vital. His report was delayed by four months after the chancellery demanded changes.

He said Germany had been able to cut C02 output by 15 percent since 1991 largely due to the collapse of heavily polluting industry in the formerly communist east.

Noting that Germany will be phasing out the use of nuclear energy at the same time it tries to cut CO2 output, he said Germany would become more reliant on importing cleaner burning natural gas and largely abandon the use of domestic coal.

Mueller said the 40 percent goal would have "considerable costs for the economy, which would also hit private consumers".

"We need a strategy of 'no regrets'," Mueller said. "I would like to stimulate discussion with this report. Anyone who makes suggestions for energy policies should also at the same time make the costs of their suggestions transparent."

The Environmental Ministry rejected Mueller's comment that protecting the environment would cost jobs, saying: "The 40 percent cut target is achievable, and will also create jobs."

Mueller dismissed suggestions that his report was an "anti-environment" call for relaxed standards.