* European Parliament expected to vote in January
* German industry body says standards toughest in the world
* Campaigners say they are easily achievable
BRUSSELS, Nov 29 (Reuters) - EU diplomats on Friday unanimously backed the world's toughest carbon dioxide emissions standards for new cars, which German carmakers said would be an enormous challenge.
Diplomatic endorsement by all 28 EU member states followed an outline agreement earlier this week, which ended months of acrimony over Germany's refusal to accept an earlier compromise deal.
It is expected to be followed by a plenary vote in the European Parliament in January and then approval by EU governments. After that, it will be law.
The previous agreement reached in June called for a limit of 95 grams of carbon dioxide per kilometre across the EU fleet from 2020. This week's deal delays full implementation by one year.
It also changes the rules on flexibility, giving more leeway to German luxury car manufactures such as Daimler and BMW, whose emissions are higher than those of smaller, lighter automakers such as Fiat.
So far Europe has a 2015 limit of 130 grams of C02 per km as an average across the EU fleet, a goal many manufacturers are already meeting or close to doing so.
But Germany's VDA car industry association said that implementation of the new fuel efficiency law would require "enormous effort" from manufacturers and suppliers.
It said the equivalent U.S. standard was 121 g/km by 2020 and China's was 117 g/km.
Chancellor Angela Merkel, whose party received money from BMW, took up the cause of the big German carmakers, declaring she was protecting German jobs, and persuaded other EU states to agree to scrap the June agreement.
Environmental campaigners and consumer groups have lambasted Germany for weakening the proposals, which lower carbon emissions and cut fuel bills.
British-based consultancy Cambridge Econometrics estimated that Europe would save around 70 billion euros ($95.3 billion) on oil imports by requiring the 95 g/km target across the EU fleet.