* EU wants to take global lead on climate change

* Labelling could help boost green product investment

* EU Commission to publish new proposals in early 2018

By Francesco Guarascio

BRUSSELS, July 18 (Reuters) - The European Union is considering the introduction of new labels to classify green financial products in an attempt to boost investment in the sector as it seeks to take the global lead in the fight against climate change.

The move would be part of a wider plan to promote EU public and private spending on clean energy and other green industries.

The European Commission estimates that Europe will need 180 billion euros ($207 billion) in additional investment every year in the next two decades if it wants to achieve its goal of curbing global warming.

Clearer classification and common labels for green financial products are expected to boost environment-friendly markets and help curb "greenwashing", a practice whereby companies and other organisations claim to be "greener" than they really are.

The EU Commission's vice president Valdis Dombrovskis said the decision of President Donald Trump to pull the United States out of the 2015 Paris global accord on fighting climate change would create new opportunities for Europe.

"(Improved labelling) will provide the confidence and trust in sustainable and green products needed for investors to fund the transition to the low-carbon economy," he told a conference on Tuesday.

The Commission will make proposals early next year on how to foster financial markets' shift towards greener products, he added.

The European Investment Bank, the EU's financial arm, has pledged to maintain a target of investing around 20 billion dollars a year to fight climate change over the next five years, which would make it the largest contributor among multilateral institutions.

But private funding is also crucial to boost the sector.

The lack of commonly agreed labels and standards for green financial products has so far hampered market development, according to a report prepared by an EU expert group on sustainable finance.

Green funds had around €145 billion of assets under management in 2016, against €3.1 trillion invested in European bonds and €3.4 trillion in equity funds, the report said.

Classification in green bonds is predicted to nearly double its global value to 131 billion euros this year, Dombrovskis sad, despite the continued absence of a European standard for such products which could further fuel their expansion.

The expert group's report said clearer definitions of green credentials should also be used for equity funds and other assets to favour investors' decisions and match global targets to reduce climate change.