11/11/2007 (Reuters), London - Booming world demand for palm oil from Indonesia for food and biofuels is posing multiple threats to the environment as forests are being cleared, peat wetlands exposed and carbon released, a report said on Thursday.

The massive forest clearance for palm plantations underway in Indonesia removes trees that capture carbon dioxide, and the draining and burning of the peat wetlands leads to massive release of the gas, said environment group Greenpeace in its report "Cooking the Climate."

On top of that, the booming demand for biofuels that include vegetable oils to replace mineral oil is in many cases actually generating more climate warming gases, the report said.

"Tropical deforestation accounts for about a fifth of all global emissions," said the report. "Indonesia now has the fastest deforestation rate of any major forested country, losing two percent of its remaining forest every year."

"Indonesia also holds the global record for greenhouse gas (GHG) emissions from deforestation, which puts it third behind the U.S. and China in terms of total man-made GHG emissions," it added.

It said that on top of Indonesia's existing six million hectares of oil palms, the government had plans for another four million by 2015 just for biofuel production. Provincial governments had plans for up to 20 million hectares more.

The report is aimed directly at a meeting next month of UN environment ministers on the island of Bali which activists hope will agree on urgent talks to find a successor to the Kyoto Protocol on cutting carbon emissions which expires in 2012.

DEGREDATION AND BURNING
It said every year 1.8 billion tons of carbon dioxide -- the main climate change culprit -- are released by the degradation and burning of Indonesia's peatlands.

Once the peatlands are drained, they start to release CO2 as the soils oxidize. Burning to clear the land for plantations adds to the emissions.

The report said peatland emissions of CO2 are expected to rise by at least 50 percent by 2030 if the anticipated clearances for expansion of palm oil plantations goes ahead.

It cited a report by environmental NGO Wetlands International that said production of one ton of palm oil from peatlands released up to 30 tons of CO2 from peat decomposition alone without accounting for carbon released during the production cycle.

Greenpeace also noted that the European Union's push to boost the use of biofuels as part of its plans to cut carbon emissions by 20 percent by 2020 was a decisive factor in booming palm oil demand.

"This use alone equates to the harvest from 400,000 hectares or 4.5 percent of global palm oil production," it said.

"Meanwhile, palm oil use in food continues to increase, partly as food manufacturers shift to using palm oil instead of hydrogenated fats and partly as it replaces other edible oils being used for biodiesel," the report added.

Greenpeace called for a ban on peatland forest clearance, urged the palm oil trade not to buy and sell produce from degraded peatland areas and said governments should exclude palm oil from biofuel and biomass targets.