The palm oil sector is undergoing a major shift as companies embrace circular economy practices. Millions of tons of palm biomass—such as empty fruit bunches (EFB), palm kernel shells, and fronds—are no longer treated as waste. Instead, they are increasingly converted into high-value oleochemical products like biofertilizers, bioplastics, and bioenergy. This approach reduces emissions, creates new revenue streams, and demonstrates how palm residues can support both sustainability and profitability.

Transforming Palm Residues into High-Value Products

EFBs, which make up about 21% of fresh fruit bunch mass, are rich in minerals such as calcium, potassium, and phosphorus—making them excellent for biofertilizer production. This reduces reliance on synthetic inputs while enriching soil health. Palm kernel shells are increasingly turned into biomass briquettes with higher calorific value and lower emissions than charcoal, gaining traction as a cleaner fuel. Fronds and trunks add further biomass potential, suitable for biochar and bio-oils through pyrolysis and torrefaction.

Indonesia alone produces more than 111–122 million tons of palm biomass annually, capable of generating up to 59 terawatt-hours (TWh) of clean energy—well above the 2025 national bioenergy target. Methane recovery from palm oil mill effluent (POME) could add another 15–19.5 TWh. Globally, the biomass briquette market is projected to grow from $320 million in 2017 to $570 million by 2025.

Circular Economy and Business Opportunities in Oleochemicals

The adoption of circular practices allows the industry to reduce dependence on petrochemicals while cutting emissions. Biorefineries now transform residues into biodiesel, bioethanol, and even bioplastics, while composting and anaerobic digestion provide organic fertilizers and biogas to power mill operations.

This waste-to-wealth approach unlocks clear business opportunities. Companies investing in biomass energy or residue-based products strengthen compliance with climate standards while tapping into new revenue channels. Oleochemical players such as Tradeasia International are at the forefront, supporting clients with sustainable palm-based derivatives for diverse industries. In conclusion, palm residues are no longer just a waste challenge but a strategic resource driving the next phase of oleochemical innovation—proving that sustainability and profitability can progress together.

 

Sources:

  1. Palm Chemicals
    https://www.palm-chemicals.com/

  2. Indonesia's potential to transform palm waste into clean energy (Infosawit)
    https://www.en.infosawit.com/news/15621/indonesia-s-potential-to-transform-palm-waste-into-clean-energy

  3. Circular economy approaches in the palm oil industry (JETs ITB)
    https://jets.itb.ac.id/jets/article/download/4/69/2538