The Indonesian Palm Oil Association (Gapki) has opposed the government'€™s plan to prolong a two-year forest moratorium, slated to end in May, saying that such an extension would only hamper the expansion of the country'€™s palm oil sector.

Indonesia, through Presidential Instruction No. 10/2011, had set a two-year moratorium to halt the commercial use of a total 65.2 million hectares of primary forests and peatland in an attempt to curtail deforestation and reduce greenhouse gases.

The moratorium, which resulted from an Indonesia'€“Norway bilateral agreement with a US$1 billion potential carbon transaction, will expire on May 20.

Forestry Minister Zulkifli Hasan has declared the moratorium a success, saying that the move has slowed the country'€™s deforestation rate to 450 hectares per year during 2010-2011 from 3.5 million hectares per year in the period of 1999-2002.

Indonesia has pledged to cut back its carbon emissions by 26 percent from the current 2.1 gigatons of carbon dioxide equivalent (CO2e) by 2020, and by 2012 Indonesia had cut 489 billion tons of CO2e or 16.57 percent of the target.

'€œSuch progress shows that the country needs to continue the forest moratorium,'€ Zulkifli said in a speech read during a national seminar held in Jakarta on Tuesday, further emphasizing the government'€™s plan to go on with the moratorium.

A two-year moratorium was enough to curb deforestation and to lower carbon emissions, but an extension would only incur losses to palm plantation companies that had contributed much to the state income, Gapki'€™s director of law and advocacy Tungkot Sipayung said.

Tungkot said that the government should focus on protecting primary and conservation forests, and let loose the usage of peatland deemed as prospective palm plantation land.

'€œThe moratorium will limit the opportunity to develop our country'€™s palm oil production. We already have a 1999 Forestry Law to monitor the matter, therefore a longer forest moratorium is not needed,'€ he said, adding that data gathered from various sources showed that peatland planted with palm could reduce carbon emissions more than peatland left dormant.

Gapki'€™s data is in contrast with research reports from various international institutions and environmental organizations that say emissions from logging and drainage on peatland have contributed significantly to Indonesia'€™s greenhouse gas emissions, including methane.

Palm plantation expansion has long been blamed for rampant deforestation, while high demand for palm oil has driven rapid forest loss in several areas such as in Sumatra and Kalimantan.

Indonesia, the world'€™s largest palm oil producer with an annual output of over 26 million tons, has been expanding its oil palm estates by 200,000 hectares a year, which are mostly developed by large companies.

Tungkot said that the extended moratorium would only generate losses to the country as it limited development of labor-intensive palm plantations and palm processing sectors, that absorbed 6.7 million workers and had contributed Rp 30.73 trillion (US$3.16 billion) to state income in 2006-2012 from crude palm oil (CPO) alone.

Palm oil players have strongly opposed the moratorium since it commenced two years ago, saying that it contradicted the government'€™s plan to reach 40 million tons of CPO production in 2020.

Zulkifli, however, said that the moratorium would not affect the country'€™s economy.

'€œMany businessmen protested the moratorium before it was launched in 2011 saying that it would hamper investment. But our country, in contrast, recorded 6.3 percent economic growth in 2012,'€ Zulkifli said.

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