27/11/2007 (IPS), Bangkok - European Union (EU) demand for supposedly green-friendly fuels, such as palm oil, is coming at a high social and environmental cost in Asia, warns a new report released Tuesday by the United Nations Development Programme (UNDP).

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

‘’Expansion of cultivation of (oil palm) in East Asia has been associated with widespread deforestation and violation of human rights of indigenous people,’’ revealed the report, titled ‘Fighting climate change: Human solidarity in a divided world’.

‘’Since 1999, EU’s demand for palm oil (primarily from Malaysia and Indonesia) have more than doubled to 4.5 million tonnes, or almost one-fifth of world imports,’’ adds 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.’’

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

The U.N. agency’s concerns echo a similar red flag raised last week by another report, ‘Up in Smoke: Asia and the Pacific,’ which was 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 added. ‘’Deforestation to make way for large-scale mono-cropping of energy crops obliterates the ‘green credentials’ of the biofuel.’’

These cautionary views about palm oil are expected to feed into the discussions billed to emerge during a major 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 over 180 countries with a mission to craft a blueprint of global action to stall 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 area in 1997.’’ Production is ‘’dominated by Indonesia and Malaysia, with the former registering the fastest rate of increase in terms of forests converted into palm oil.’’

According to the British report, the South-east Asian archipelago has nearly six million ha of land under palm oil and Jakarta has set its sights of further expansion. ‘’In 2007, the Indonesian government signed 58 agreements worth 12.4 billion U.S. dollars 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 under threat of being converted into palm oil plantations as essential carbon sinks to absorb the carbon dioxide emitted to the world. As important are peatlands that are part of natural forests. Destroying such forests results in the stored carbon in the peatland forests adding to the greenhouse gases (GhGs) and the loss of carbon sinks.

‘’Peatland forests are traditional carbon storehouses. Typically they store up to 30 percent carbon dioxide,’’ Shailendra Yashwant, climate and energy campaigner for the South-east Asia office of Greenpeace, told IPS from Jakarta. ‘’A four-million heactare peatland forest in a province in northern Sumatra stores 14.6 gigatons of carbon dioxide.’’

Studies done by Greenpeace, the global environmental lobby, reveal that nearly 28 million ha of forests have been destroyed in places like Sumatra, Suleweisi and Kalimantan in Indonesia since 1990. Currently, thousands of ha of peatland are being cleared for another palm oil plantation, 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 healthy returns. ‘’The prices for palm oil have been very good. There has always been a demand for it,’’ Patrick Durst, senior forestry officer at the Asia and Pacific division of the Food and Agriculture Organisation (FAO), said in an interview. ‘’It is not a labour-intensive crop, unlike some other agriculture products.’’

Consequently, other south-east Asian countries ranging from Burma, Thailand and Cambodia to Vietnam and the Philippines have begun following the Indonesian and Malaysian model of palm oil production. Bangkok has set its sights on having 1.6 million ha under oil palm cultivation in the next two decades, a nearly five-fold increase from the current 320,000 ha of palm oil plantations.

If countries have to invest in palm oil as a green-friendly fuel, however, the UNDP points to some success stories, where ‘’environmental friendly and socially responsible ways’’ have taken root in small-scale agroforestry ventures. ‘’Much of the production in West Africa fits into this category.’’