Unlocking Value from Palm Oil By-Products

The palm oil industry, one of the world’s largest agricultural sectors, is undergoing a quiet transformation. Instead of treating its vast volumes of by-products as waste, the sector is investing in circular research and development (R&D) to convert them into high-value green chemicals. Residues such as empty fruit bunches (EFB), palm kernel shells (PKS), palm oil mill effluent (POME), and glycerol are now recognized as promising feedstocks for bioethanol, biosurfactants, biopolymers, and bioplastics—creating new revenue streams while cutting environmental costs.

Advances in biorefinery integration are at the heart of this shift. Using biocatalysts and enzymatic conversion, researchers are optimizing processes such as separate hydrolysis and fermentation (SHF) and simultaneous saccharification and fermentation (SSF) to produce bioethanol more efficiently. For example, trials with delayed simultaneous saccharification and fermentation (DSSF) have delivered yields of 26.1 g/L, signaling progress toward commercially viable models. At the same time, palm oil refining by-products like palm fatty acid distillate (PFAD) are being transformed into biosurfactants. Bacterial strains such as Pseudomonas aeruginosa have achieved rhamnolipid concentrations of 3.4 g/L, positioning these eco-friendly alternatives as substitutes for petrochemical surfactants in industries from cosmetics to pharmaceuticals.

Beyond bioethanol and biosurfactants, palm residues also underpin the production of biopolymers and bioplastics, including polyhydroxyalkanoates (PHAs). Leveraging palm sugar molasses and glycerol residues, these biodegradable materials directly address the global challenge of plastic pollution, further strengthening the business case for circular palm oil innovation.

Driving Economic Growth Through Circular Innovation

Circular palm oil R&D is not limited to chemicals. Energy valorization plays a critical role, with gasification and anaerobic digestion of POME and EFB generating biofuels and biogas. Even advanced methods such as microwave-assisted pyrolysis are showing strong potential, delivering bio-oil yields of up to 40.7% from oil palm fiber. These processes not only diversify product portfolios but also reduce reliance on fossil fuels, aligning palm oil with global clean energy goals.

The economic potential is substantial. With millions of tons of palm biomass generated annually in Indonesia and Malaysia alone, conversion into bioethanol and green chemicals could represent hundreds of millions of dollars in value creation. This is reinforced by savings on waste disposal and compliance costs, while green products enjoy premium market positioning in fast-growing sectors such as pharmaceuticals, cosmetics, and sustainable materials.

Momentum is building at both the research and industrial level. Southeast Asian research centers have already demonstrated pilot-scale enzymatic bioethanol production from EFB, while companies are exploring integrated biorefineries that combine biosurfactant and bioenergy production under one roof. Industry 4.0 solutions are accelerating this transition, with real-time analytics, automated waste sorting, and digital monitoring enhancing process efficiency and ensuring sustainability metrics are consistently met.

In essence, the palm oil sector is redefining its value proposition. By embedding circular R&D into its core, it is turning what was once waste into strategic assets that drive profitability, resilience, and environmental accountability. As these technologies scale, palm oil is positioned not just as a commodity crop but as a platform for a circular bioeconomy, pioneering a future where growth and sustainability advance hand in hand.

 

Sources:

  1. Circular economy approaches and integrated biorefinery of palm oil industry wastes:
    https://jets.itb.ac.id/jets/article/view/4

  2. Integrated algal and oil palm biorefinery as a model system for bioenergy and biochemicals:
    https://pmc.ncbi.nlm.nih.gov/articles/PMC10992906/

  3. An integrated biorefinery strategy for utilization of palm-oil wastes (ScienceDirect):
    https://www.sciencedirect.com/science/article/abs/pii/S0960852421016084

  4. United Plantations Berhad Annual Report 2023 (industry example):
    https://unitedplantations.com/wp-content/uploads/2024/02/UP_Annual_Report_2023.pdf

  5. Analysis of utilization of palm oil-based circular bioeconomy in Indonesia:
    https://www.atlantis-press.com/article/125993575.pdf