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Indonesia Won't Allow Oil Palm Growers to Cut Forests
Indonesia Won't Allow Oil Palm Growers to Cut Forests
5/6/07 (Bloomberg) -- Indonesia, the world's third-largest emitter of greenhouse gases, won't allow oil palm growers to cut primary forests for establishing plantations, Minister for Environment Rachmat Witoelar said.
Per capita carbon dioxide emissions in the Southeast Asian nation, the biggest producer of the gas after the U.S. and China, is growing at a rate of 4 percent a year, compared with 3.5 percent in India and 2.7 percent in China, according to a report released yesterday by the World Bank.
Indonesia is trying to reduce emissions of greenhouse gases, 75 percent of which results from deforestation. The country is set to overtake Malaysia this year as the world's largest palm oil supplier and plans to add 1.5 million hectares of the crop over the next three years, the government said.
``Expansion of palm oil plantations will not be allowed to sacrifice natural forests,'' Witoelar said in an interview in Bali yesterday. ``They will be planted in lots that are already empty. There are plenty of these, 18 million hectares of them.''
Palm oil can be converted into methyl esters, which may be added to conventional fuels to reduce carbon emissions. Such substitutions have come into favor after crude oil more than tripled since November 2001.
Biofuel Projects
President Susilo Bambang Yudhoyono is betting on biofuels made from cassava, jathropa and palm oil to create 5 million jobs and help him keep his election promise to cut unemployment. The government plans to add 7 million hectares of plantations by 2011, according to its biofuels plan.
China National Offshore Oil Corp., the nation's third- largest oil company, will partner PT Sinar Mas Agro Resources & Technology in investing $5.5 billion in an eight-year program for biofuel projects in Indonesia, the companies said on Jan. 9. The two companies and Hong Kong Energy Ltd. will invest in the planting of crops to make biofuels in Papua and Borneo.
``The areas we are talking about are those designated for plantation,'' said Gandi Sulistiyanto Soeherman, managing director of the Sinar Mas Group, which is also waiting for the government to give tax breaks for the project. ``What Witoelar means must be that you can't clear land by burning it or by any way that affects the environment.''
Activists said the environment ministry's rule isn't followed by many district and regional governments. Indonesia devolved power to districts in 2001.
Power Struggle
``We have seen some districts give permits to open up areas for oil plantations,'' said Fitrian Ardiansyah, program coordinator for forest restoration at the World Wide Fund for Nature in Jakarta. ``It's a power struggle between the layers of authority.''
The government hasn't made it clear which areas will be available for plantations, Ardiansyah said.
Companies want to plant more oil palm trees as prices of the vegetable oil, used also as cooking oil and to make soap, have almost doubled in the past year on surging demand from China and India, the world's biggest buyers of the commodity.
Palm oil for August delivery, the most actively traded contract on the Malaysia Derivatives Exchange, rose 60 ringgit, or 2.3 percent, to a record 2,661 ringgit ($781.60) a ton at 4:24 p.m. in Kuala Lumpur.
Oil palm production in Indonesia has been a major reason for deforestation, the World Bank said in a report titled ``Indonesia and Climate Change'' released yesterday.
The move to expand biofuel production is ``still risky and problematic'' it said.
Indonesia, which has the world's third-largest expanse of tropical forest, adds 2,000 million tons of carbon dioxide a year from forest fires and decomposition of peatlands.
Indonesia's peatlands stretch across an area the size of the U.K., Jack Rieley, a geographic professor at the University of Nottingham in England, said on Oct. 30. Peat, from which coal is formed, can burn for months and release gases that produce sulfuric acid.
Per capita carbon dioxide emissions in the Southeast Asian nation, the biggest producer of the gas after the U.S. and China, is growing at a rate of 4 percent a year, compared with 3.5 percent in India and 2.7 percent in China, according to a report released yesterday by the World Bank.
Indonesia is trying to reduce emissions of greenhouse gases, 75 percent of which results from deforestation. The country is set to overtake Malaysia this year as the world's largest palm oil supplier and plans to add 1.5 million hectares of the crop over the next three years, the government said.
``Expansion of palm oil plantations will not be allowed to sacrifice natural forests,'' Witoelar said in an interview in Bali yesterday. ``They will be planted in lots that are already empty. There are plenty of these, 18 million hectares of them.''
Palm oil can be converted into methyl esters, which may be added to conventional fuels to reduce carbon emissions. Such substitutions have come into favor after crude oil more than tripled since November 2001.
Biofuel Projects
President Susilo Bambang Yudhoyono is betting on biofuels made from cassava, jathropa and palm oil to create 5 million jobs and help him keep his election promise to cut unemployment. The government plans to add 7 million hectares of plantations by 2011, according to its biofuels plan.
China National Offshore Oil Corp., the nation's third- largest oil company, will partner PT Sinar Mas Agro Resources & Technology in investing $5.5 billion in an eight-year program for biofuel projects in Indonesia, the companies said on Jan. 9. The two companies and Hong Kong Energy Ltd. will invest in the planting of crops to make biofuels in Papua and Borneo.
``The areas we are talking about are those designated for plantation,'' said Gandi Sulistiyanto Soeherman, managing director of the Sinar Mas Group, which is also waiting for the government to give tax breaks for the project. ``What Witoelar means must be that you can't clear land by burning it or by any way that affects the environment.''
Activists said the environment ministry's rule isn't followed by many district and regional governments. Indonesia devolved power to districts in 2001.
Power Struggle
``We have seen some districts give permits to open up areas for oil plantations,'' said Fitrian Ardiansyah, program coordinator for forest restoration at the World Wide Fund for Nature in Jakarta. ``It's a power struggle between the layers of authority.''
The government hasn't made it clear which areas will be available for plantations, Ardiansyah said.
Companies want to plant more oil palm trees as prices of the vegetable oil, used also as cooking oil and to make soap, have almost doubled in the past year on surging demand from China and India, the world's biggest buyers of the commodity.
Palm oil for August delivery, the most actively traded contract on the Malaysia Derivatives Exchange, rose 60 ringgit, or 2.3 percent, to a record 2,661 ringgit ($781.60) a ton at 4:24 p.m. in Kuala Lumpur.
Oil palm production in Indonesia has been a major reason for deforestation, the World Bank said in a report titled ``Indonesia and Climate Change'' released yesterday.
The move to expand biofuel production is ``still risky and problematic'' it said.
Indonesia, which has the world's third-largest expanse of tropical forest, adds 2,000 million tons of carbon dioxide a year from forest fires and decomposition of peatlands.
Indonesia's peatlands stretch across an area the size of the U.K., Jack Rieley, a geographic professor at the University of Nottingham in England, said on Oct. 30. Peat, from which coal is formed, can burn for months and release gases that produce sulfuric acid.