You need lzop installed ;)
from target host
ssh $user@$source-host tar --use-compress-program=lzop -cf - /source/folder | tar --use-compress-program=lzop -xf -
from source host
cd /source/folder
tar --use-compress-program=lzop -cf - . | ssh $user@$target-host tar -C /target/folder --use-compress-program=lzop -xf -