The European Union threatens to impose trade sanctions on nations which fail to join a global climate deal to replace the Kyoto Protocol.

Nations that refuse to curb greenhouse gases will be told that they face trade sanctions if they try to gain a competitive advantage by continuing to allow cheap, high-pollution production.

The bloc mainly seeks ways to stop big companies relocating from Europe to countries that refuse to join a post-2012 climate change agreement in order to avoid the EU's CO2 targets.

The European Commission President José Manuel Barroso told The Time that the EU could take protective measures sector by sector to safeguard European energy-intensive industries.

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“We want a binding decision now that we will take measures to protect these industries in 2012 in case there is not agreement. It would be completely foolish for the Europe Union to export the pollution and the jobs because globally the effects on climate change will be just the same, only we lose the jobs and our industry,” Barroso said.

Barroso gave his strong support for the EU target for 10 percent of all fuel to be biofuels by 2020, rejecting 'exaggerated' arguments that it had contributed to food price rises and shortages.

Barroso urged an international agreement on the types of biofuels that should be allowed but insisted that the EU targets would increase their sustainability.