April 22, 2013

Expansion for palm oil

Indonesian palm oil giants look to degraded land swaps to assist rainforest conservation

Already the biggest palm oil producers on the planet, according to the UN Food and Agriculture organization Malaysia and Indonesia accounted for 83 percent of global market share combined in 2011, generating tens of billions of dollars per year for their economies. Meanwhile, the global demand for oils and fats demand is growing by 5-6 million tons per year with palm oil offering the highest oil yield per hectare of any plant. It also happens to provide relatively affordable cooking oil for the poor.

There is a current two-year ban on new plantation and logging concessions in some 14 million hectares of previously unprotected forest and peat land in Indonesia but the palm oil giant GAPKI has begun to express interest in land swaps where rather than deforesting land with high carbon stock instead they get permission to plant in degraded forest in the state’s forest estate.

This is not the first time that land swaps have been proposed by palm oil companies in Indonesia, but progress had been slow due bureaucracy, land disputes and confusing regulations. The World Resources Institute estimates that there may be some 50 million hectares suitable for plantations without the need to clear carbon-dense forests.

Palm oil companies and other developers often target forested lands because it can be easier to get a license than for degraded lands, which often go hand in hand with a bundle of competing land claims, including from local communities. Forest clearing also leaves a company open to criticism from environmental groups, who note that forest and peat conversion is a huge source of greenhouse gas emissions and can threaten biodiversity in general and often specific endemic endangered species.

Brazil aims to convert up to 5 million hectares of degraded pasture land into oil palm in the next 7 years, which would represent about 30 percent of current global palm oil land cover.


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