Surging palm-oil demand from the food and biofuel industries threatens to ignite a "climate bomb" as developing countries strip forests and swamps to make way for plantations, Greenpeace said.

Indonesia, the biggest producer of the oil, releases 1.8 billion metric tons of greenhouse gases or 4 percent of the world total a year by burning its peatlands to grow palms, said John Sauven, executive director of Greenpeace U.K.

"If they go up in smoke, then so goes the climate," he told reporters in London today.

Nestle SA, the world's biggest food company, and Unilever, the second-largest consumer-products business, are among those "turning a blind eye" to the destruction by using cheap oil in their products, Greenpeace said in a statement today. Oil from different sources is blended, making it difficult to trace its origins, Greenpeace said.

Unilever is "looking for a sustainable solution" with plantations, millers and commodity traders in its role as president of the Roundtable on Sustainable Palm Oil, company spokesman Trevor Gorin said by phone from Rotterdam today.

"The Greenpeace report exaggerates Nestle's role," the Vevey, Switzerland-based company said in an e-mailed statement today. "Nestle has been committed to sourcing palm oil in an environmentally and socially responsible way for many years."

Cargill Inc., the largest U.S. agricultural company, said it "is committed to responsible and sustainable palm production on our own palm plantations."

The company "will not develop new plantations on peatland or land that would threaten biodiversity," Cargill said in an e-mailed statement today. The firm said it has a "no-burn" policy for clearing land or managing waste.

Greenpeace called for an "immediate moratorium" on forest clearance and peatland destruction at next month's United Nations climate conference on the Indonesian island of Bali. It said there are plans to cover half the Indonesian province of Riau with palm-oil plantations.

The peatlands in the province, which is about the size of Switzerland, store 14.6 billion tons of carbon and the burning of those areas would be equivalent to one year's global greenhouse- gas emissions, Greenpeace said.

"Unless efforts are made to halt forest and peatland destruction, emissions from these peatlands may trigger a climate bomb," it said in a report.

Palm oil is used in biodiesel, cosmetics and foods including chocolate, margarine and potato chips.