Demand for palm oil is growing—and fast. At the moment, most of it ends up in hundreds of food products—from margarine and chocolate to cream cheese and oven chips—although it's also used in cosmetics and increasingly, for use in biodiesel. But the cost to the environment and the global climate is devastating—to feed this demand, tropical rainforests and peatlands in South East Asia are being torn up to provide land for oil palm plantations.

In March, Greenpeace activists unfurl a giant banner in the middle of orangutan habitat inside the concession owned by PT Multi Persada Gatramegah (PT MPG), a subsidiary of Musim Mas company, a palm oil supplier to Procter and Gamble in Muara Teweh, North Barito, Central Kalimantan. Greenpeace is calling P&G to stop destroying Indonesian rainforest and commit zero deforestation policy. Photo credit: © Ulet Ifansasti / Greenpeace

Our consumption of palm oil is rocketing: compared to levels in 2000, demand is predicted to more than double by 2030 and to triple by 2050. Over 70 percent ends up in food, but the biofuels industry is expanding rapidly. Indonesia already has 6 million hectares of oil palm plantations, but has plans for another 4 million by 2015 dedicated to biofuel production alone.

Biodiesel fueling palm oil expansion

Commitments from various governments to increase the amount of biofuels being sold are pushing this rise in demand, because they're seen as an attractive quick fix to reduce greenhouse gas emissions. By 2020, 10 percent of fuel sold in the EU will be biofuel and China expects 15 percent of its fuel to be grown in fields, while India wants 20 percent of its diesel to be biodiesel by 2012. The irony is that these attempts to reduce the impact of climate change could actually make things worse—clearing forests and draining and burning peatlands to grow palm oil will release more carbon emissions than burning fossil fuels.

But this phenomenal growth of the palm oil industry spells disaster for local communities, biodiversity and climate change as palm plantations encroach further and further into forested areas. This is happening across South East Asia, but the problem is particularly acute in Indonesia which has been named in the 2008 Guinness Book of Records as the country with fastest rate of deforestation. The country is also the third largest emitter of greenhouse gases, largely due to deforestation.

Fruit from the oil palm. Photo credit: © Greenpeace/Solness

Much of the current and predicted expansion oil palm expansion in Indonesia is taking place on forested peatlands. Peat locks up huge amounts of carbon, so clearing peatlands by draining and burning them releases huge greenhouse gases. Indonesia's peatlands, cover less than 0.1 per cent of the Earth's surface, but are already responsible for 4 percent of global emissions every year. No less than ten million of Indonesia's 22.5 million hectares of peatland have already been deforested and drained.

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Sustainable palm oil?

Industry efforts to bring this deforestation under control have come through the Roundtable on Sustainable Palm Oil (RSPO). It was set up in 2001 to establish clear ethical and ecological standards for producing palm oil, and its members include high-street names like Unilever, Cadbury's, Nestlé and Tesco, as well as palm oil traders such as Cargill and ADM. Together, these companies represent 40 percent of global palm oil trade.

But since then, forest destruction has continued. Many RSPO members are taking no steps to avoid the worst practices associated with the industry, such as large-scale forest clearance and taking land from local people without their consent. On top of this, the RSPO actually risks creating the illusion of sustainable palm oil, justifying the expansion of the palm oil industry.

Palm oil is a major driver of deforestation in Indonesian Borneo, especially the province of Central Kalimantan. Greenpeace, along with other activists, have been targeting major palm oil producers that export large volumes of product to consumer-facing companies, which tend to be sensitive to environmental complaints. Photo credit: © Ardiles Rante / Greenpeace

Our investigations—detailed in our report Cooking The Climate—found evidence that RSPO members are still relying on palm oil suppliers who destroy rainforests and convert peatlands for their plantations. One member—Duta Palma, an Indonesian palm oil refiner—has rights to establish plantations on land which theoretically is protected by law.

There are ways to stop this. A moratorium on converting forest and peatland into oil palm plantations will provide breathing space to allow long-term solutions to be developed, while restoring deforested and degraded peatland provides a relatively cheap, cost effective way to make huge reductions in greenhouse gas emissions in Indonesia. And governments around the world have to recognize the role deforestation plays in climate change, providing funds to help countries with tropical forests to protect their resources as well as reducing their own CO2 emissions.

For more information on our campaign and the issues behind it, read the FAQ on palm oil, forests and climate change.

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