WASHINGTON, March 2 (Reuters) - The American Petroleum Institute (API) is weighing endorsing a price on carbon emissions, a major shift after long resisting mandatory government climate policies, a source familiar with the decision making said.

The API, the main U.S. oil industry lobby group that includes most of the world's biggest oil companies, is considering carbon pricing "among other policy solutions to reduce emissions and reach the ambitions of the Paris Agreement," the source said, confirming a report about the policy shift by the Wall Street Journal.

The group is confronting its previous resistance to regulatory action on climate change amid a shift in industry strategy on the issue and the new U.S. presidency.

European member Total quit the group because of disagreements over API's climate policies and support for easing drilling regulations and the Biden administration is pursuing a policy agenda that would shift the United States from fossil fuels.

A draft statement of the policy shift reviewed by the Wall Street Journal said the group does not endorse a specific carbon pricing tool such as a tax on carbon emissions or emissions trading scheme. The source said, however, that the group's State of American Energy report released in January was supportive of a market-based carbon pricing policy.

The API did not comment on whether or when the group would formally endorse a price on carbon but said it has been working for nearly a year on an industry-wide response to climate change.

“Our efforts are focused on supporting a new U.S. contribution to the global Paris agreement,” said API spokeswoman Megan Bloomgren.

Within API, there has been a widening rift between Europe’s top energy companies https://www.reuters.com/article/us-total-api/frances-total-quits-top-u-s-oil-lobby-in-climate-split-idUSKBN29K1LM, which over the past year accelerated plans to cut emissions and build large renewable energy businesses, and their U.S. rivals Exxon Mobil Corp and Chevron Corp that have resisted growing investor pressure to diversify.

Other major industry groups like the U.S Chamber of Commerce and the Business Roundtable https://www.reuters.com/article/usa-business-carbonpricing/u-s-ceo-group-says-it-supports-carbon-pricing-to-fight-climate-change-idUSKBN2672W4, which includes Chevron, over the last year have endorsed market-based carbon pricing.

Chevron said it has engaged those groups and API "to support well-designed carbon pricing."

"We support economy-wide carbon pricing as the primary policy tool to address climate change, applied across the broadest possible area to maximize environmental and economic efficiency and effectiveness," Chevron spokesman Sean Comey said in an e-mailed statement.

BP and Shell declined to comment. (Reporting by Valerie Volcovici; Editing by Chizu Nomiyama and Christian Schmollinger)