KUALA LUMPUR - Planned palm oil carbon emission targets will be delayed by at least a year as planters clash with NGOs on calculating the vegetable oil's environmental impact, officials said on Monday.

The measure was aimed at combating the negative image of palm oil output, which green groups say has been partly fueled by producers in Southeast Asia cutting down swathes of rainforests and draining carbon-rich peatlands.

But Malaysian and Indonesian producers say imposing limits on land expansion based on greenhouse gas emissions was an unfair barrier to trade as oil palm estates could act as net carbon sink.

The CO2 targets were delayed by a year pending further study and watered down to a voluntary undertaking during the Roundtable of Sustainable Palm Oil (RSPO) that brings together producers, buyers and NGOS this week in the Malaysian capital.

We are disappointed because we wanted the target for this year, said Jan Kees Vis, chairman of the RSPO, which has been tasked with formulating a green standard for the industry.

However, looking at how even the Copenhagen climate talks may not even reach a resolution in December, perhaps its not too bad. It's part and parcel of trying to get everyone to agree.

Once hailed as a biofuel feedstock that can cut the world's reliance on petroleum diesel, palm oil now struggles with a negative image that estate expansion fuels climate change.

New oil palm estates often replace tropical forests that absorb carbon dioxide and production of the vegetable oil releases high quantities of methane gas, scientists and green groups say.

Palm oil producers say CO2 standards such as the European Union's move to use biofuels that reduce emissions by at least 35 percent versus fossil fuel in 2010 are trade barriers, sidelining palm oil which the E.U. considers to save 19 percent.


Differences over palm oil's eco-credentials have often made it difficult for the RSPO to come up with a consensus.

It was only last year that producers and green groups hammered out a set of criteria for palm oil produced without harming wildlife or displacing local communities, despite the RSPO being in existence since 2002.

We agree on some conditions and then they (green groups) throw something at us, said a Malaysian planter who spoke on the condition of anonymity.

I won't be surprised in some of the planters get fed up and walk out of this.

Part of the producers' anger stems from the slow uptake of certified green palm oil during the economic crisis, observers said. WWF last week issued a buyer's scorecard that showed most European palm oil buyers have shunned green palm oil priced at a premium.

The scorecard will benchmark the industry. There is some progress with palm oil buyers, the producers should be heartened by this, said Adam Harrison, senior policy officer of WWF International, who came up with the scorecard.
(Editing by Michael Urquhart)