28/11/2007 (Asia Times Online), Bangkok - European Union (EU) demand for Asian-produced biofuels, particularly palm oil, is coming at a high social and environmental cost, a report released on Tuesday by the United Nations Development Program (UNDP) warns.

The UN agency in its annual "Human Development Report 2007/2008" cautioned countries in the region against following the lead taken by Indonesia and Malaysia, the main producers of palm oil as a biofuel.

"Expansion of cultivation of [oil palm] in East Asia has been associated with widespread deforestation and violation of human rights of indigenous people," said the report, entitled "Fighting climate change: Human solidarity in a divided world".

"Since 1999, EU demand for palm oil, primarily from Malaysia and Indonesia, has more than doubled to 4.5 million tons, or almost one-fifth of world imports," added the 384-page report. "Opportunities for supplying an expanding European Union market have been reflected in a surge of investment in palm oil production in East Asia."

UNDP climate change advisor Martin Krause said at the launch of the report in Bangkok: "There are a lot of safeguards that have to be built in if you want to make palm oil production environmentally sustainable. The debate on this has just begun."

The concerns echo a similar red flag raised last week by another report, "Up in Smoke: Asia and the Pacific", released by a coalition of British development and environmental groups. The rapid growth of palm oil plantations has resulted in massive deforestation in Indonesia, which has led to large amounts of carbon dioxide trapped in the forests being emitted into the atmosphere, stated that report.

"As a result of deforestation, some of which is for palm oil, Indonesia is the third-largest emitter of carbon dioxide, after the USA and China," it said. "Deforestation to make way for large-scale mono-cropping of energy crops obliterates the 'green credentials' of the biofuel."

These cautionary views about the downside of palm oil are expected to feed into discussions at an international climate change meeting to be held in early December in the Indonesian resort-island of Bali. The United Nations Climate Change Conference will be attended by representatives from more than 180 countries with a mission to craft a blueprint for global action to forestall the emerging environmental catastrophe caused by climate change.

The global cultivation of palm oil had reached 12 million hectares by 2005, according to the UNDP, which was almost double the plantation area in 1997. The agency notes that production is dominated by Indonesia and Malaysia, with the former registering the fastest rate of increase anywhere in terms of forests converted into palm oil.

According to the British report, the Southeast Asian archipelago has nearly 6 million hectares of land under palm oil cultivation and Jakarta has set its sights on further expansion. "In 2007, the Indonesian government signed 58 agreements worth US$12.4 billion in order to produce about 200,000 barrels of oil-equivalent biofuel per day by 2010."

Environmentalists view the forests of Indonesia and others in Asia, now under severe threat of being converted into palm oil plantations, as essential to absorb global carbon dioxide emissions. As important are peatlands, which are part of the region's natural forests and are likewise being destroyed at a rapid rate.

"Peatland forests are traditional carbon storehouses. Typically they store up to 30% carbon dioxide," said Shailendra Yashwant, climate and energy campaigner for global environmental lobby Greenpeace in Jakarta. "A 4-million hectare peatland forest in a province in northern Sumatra stores 14.6 gigatons of carbon dioxide."

Greenpeace studies reveal that nearly 28 million hectares of forests have been destroyed in places like Sumatra, Suleweisi and Kalimantan in Indonesia since 1990. Currently thousands of hectares of peatland are being cleared for palm oil plantations - all of which are owned by private companies.

The attraction to palm oil plantations, which preceded the emerging demand for biofuels from the EU, stems largely from the relative ease with which they can be grown and the economic returns they generate. Prices for palm oil have held up well over the years and its not a labor-intensive crop like many other tropical commodities.

As such, other Southeast Asian countries including Myanmar, Thailand, Cambodia, Vietnam and the Philippines are beginning to follow Indonesia's and Malaysia's slash-and-burn model of palm oil production. The Thai government has set its sights on having 1.6 million hectares under oil palm cultivation in the next two decades, a nearly five-fold increase from the current 320,000 hectares.

It's still unclear how much of that earmarked cultivation area will require clear-cutting. The UNDP pointed to some success stories, where environmentally friendly and socially responsible ways of cultivation have taken root in small-scale agro-forestry ventures. However to date, most of that green friendly production has taken place in West Africa, not Asia.

(Inter Press Service)