EU to tackle Canadian tar sands in new law -sources

* EU trade and climate chiefs to tackle Canadian tar sands

* EU sets aside worries that Canada will scrap trade deal

* Documents show EU believes it would win any WTO challenge

By Pete Harrison and Juliane von Reppert-Bismarck BRUSSELS, Feb 23 (Reuters) - Europe's trade and climate chiefs are preparing to take a stand against imports of oil from Canada's polluting tar sands, despite fears the move might wreck a multi-billion dollar trade deal, according to EU sources and documents.

European Union sources said this week that Canada had threatened to pull out of trade talks because of the clash, but Ottawa has denied that. [ID:nLDE71H14V]

Canada says draft EU standards to promote greener fuels will harm a possible future market for its oil sands -- tar-like oil that is trapped in sediment and forms the world's second-largest proven oil reserves after Saudi Arabia's.

Last year the European Union appeared to back down on the issue, putting commerce ahead of a strategy to curb greenhouse gases from transport fuels by 6 percent this decade.

But EU trade commissioner Karel De Gucht and climate commissioner Connie Hedegaard have spent months checking the robustness of methodology to measure the carbon footprint of fuels and are close to taking a stand on those that are the most carbon-intensive, according to internal EU documents and sources.

"We're constructively working on a solution between the two teams, and there is a political assessment that this should be done as soon as possible," said one EU source.