G7 leaders will create a "climate club" by the end of the year to allow willing nations to coordinate and speed up efforts to tackle global warming, they said in a statement Tuesday.

The club will be open to countries committed to the Paris agreement goal of limiting global temperature increases to 1.5 degrees Celsius and achieving carbon neutrality by 2050.

The club's establishment was agreed at the end of a three-day summit of the Group of Seven rich nations in the Bavarian Alps.

German Chancellor and summit host Olaf Scholz, who spearheaded the proposal, said it would allow countries to accelerate climate action while avoiding competitive disadvantages.

"We agree that we need more ambition to achieve our climate goals," Scholz told reporters at the end of the summit at Elmau Castle.

When countries develop national strategies to decarbonise their economies, "we want to ensure we do not work against each other and isolate ourselves from each other", he said.

This could be achieved by club members agreeing common carbon pricing standards or uniform standards on what constitutes green hydrogen, for instance.

The club will have "a particular focus on the industry sector, thereby addressing risks of carbon leakage for emission intensive goods, while complying with international rules", the G7 said in the statement.

Environmentalists however have criticised the club as vague on details and unnecessary, saying there are already enough international platforms for climate cooperation.

Without firm commitments on setting a minimum carbon price or imposing sanctions on non-complying members, Scholz's pet project risked becoming "just another club", said Greenpeace Germany executive director Martin Kaiser.

G7 members the United States and Japan have no plans to introduce a national carbon price, campaigners have pointed out.

Scholz acknowledged some countries had "different perspectives" on carbon tariffs but said there were different ways to achieve the same "ambitious goals".

He also stressed that the climate club would not be limited to G7 nations, major polluters historically, but was open to "many others".