Europe, in bid to phase out palm biofuel, leaves fans and foes dismayed

“Agricultural land scarcity combined with restrictions on corporate plantations may have spill-over effects by encouraging smallholders to expand even further,” the report says. It also cites evidence that smallholders contribute to expansion of plantations into land with high carbon stock.

A study by the Center for International Forestry Research (CIFOR) in Indonesian Borneo has found that smallholders are more likely than ever to clear carbon-rich peat forests as a result of land scarcity.

“The agricultural land that people are prepared to convert to palm oil has already been converted — and a lot of the existing farmland is becoming exhausted, so farmers are venturing further away and going into more marginal areas,” said CIFOR senior scientist George Schoneveld.

By 2030, the study projects, the majority of smallholder oil palm expansion will happen on peat soils. “From the perspective of greenhouse gas emissions this type of conversion is especially disastrous,” Schoneveld said.

In Indonesia, smallholders are also predicted to overtake companies as the majority owners of oil palm plantations. The combined area cultivated by smallholders is expected to expand from 40 percent of total national acreage in 2016 to more than 60 percent by 2030.