Deadlock on climate talks will hike business costs-Indonesia

* Environment ministers meeting in Cancun, Mexico
* More costs for businesses as standards proliferate
* Palm oil sales face multiple hurdles
Niki Koswanage Reuters AlertNet 3 Dec 10;

NUSA DUA, Indonesia Dec 3 (Reuters) - A deadlock between rich and poor countries over drawing up a climate change pact may spur proliferation of national standards that could increase business costs, Indonesia's Trade Minister said on Friday.

Trade Minister Mari Pangestu's comments come as the world's environment ministers struggle to hammer out the first climate treaty since 1992 amid concerns that a breakthrough in talks may still be years away. For more on the talks, see [ID:nCANCUN]

"The lack of a global climate change pact has seen governments across the world come up with their own interpretations on climate change and carbon emissions," Pangestu said at a palm oil conference on the Indonesian island of Bali.

"That means there will be many standards to follow. This will increase the cost of business."

Pangestu did not give further details but she was mostly referring to the palm oil industry that has to meet a slew of eco-friendly standards set by the European Union and a palm oil sector driven Roundtable on Sustainable Palm Oil (RSPO).

The RSPO nearly fell apart last year as green groups and planters could not agree on how to calculate palm oil's environmental impact via carbon emissions generated through an estate's operations or expansion activities.

The industry group is still formulating these standards.

Indonesia and Malaysia, the world's largest palm oil producers, say that EU bio-energy rules hamper exports and breach free trade rules as greenhouse gas savings from palm estates were understated.[ID:nLDE6AF14C]

Frustrated with various standards on palm oil and delays in getting international certification for its estates, Indonesia plans to impose its own mandatory environment standards on the industry to meet its own targets for cutting emissions.

Indonesian President Susilo Bambang Yudhoyono has pledged to cut emissions by 26 percent from business as usual levels by 2020 or by 41 percent by 2020 if given sufficient international support.

"We need to work together with all the stakeholders in the palm oil industry but we need to balance environment issues with developmental goals," Pangestu said.

"If an agreed climate change pact comes into place, we can be assured of some security and also meet our bottom line."