Unilever leverages palm oil waste in its largest greenhouse gas-emitting site

Unilever is shifting toward thermal renewable energy and has taken a step to lower emissions at its Unilever Oleochemical Indonesia (UOI) facility in Sei Mangkei, North Sumatra, to “inspire positive change in the palm oil industry.” The facility is the largest greenhouse gas-emitting site of the company’s global operations. 

The company says it “needs to act decisively to address its impact” to meet the target of reducing global Scope 1 and 2 emissions by 100% in 2030, compared to 2015.

“In a market where fossil-based energy is still abundant, renewable opportunities are minimal, but corporations can help drive the clean energy transition. In Indonesia’s first commercial offtake of biomethane, Unilever has started replacing the natural gas we used at UOI with biomethane, created from palm oil effluent from local mills,” says the company. 

Using palm oil waste

Unilever will use leftover liquid waste from palm oil fruits. When palm oil is created, the fruits are crushed under high temperatures, and the oil is then taken to refineries for processing.

The waste, also known as palm oil mill effluent (POME), is usually left to decompose in specially created areas or lagoons and is digested by bacteria. 

“Unless captured and used as a source of energy by the mill, the methane is slowly released into the atmosphere,” says Unilever.

POME is usually left to decompose in specially created areas or lagoons and is digested by bacteria.KIS Group, Unilever’s biogas provider partner in Southeast Asia, traps and collects methane from decomposition, purifies and compresses it, and transports it to the UOI facility.

Unilever explains that the leftover solids are also used as fertilizer on nearby plantations. 

“By transforming palm oil effluent into a renewable energy source, we’re also influencing wider changes in Indonesia and across the palm oil industry,” says Unilever. 

The partnership will expand to a third mill by the end of the year, and over the next two years, it plans to source biomethane from six more mills. It is also a part of a cost-effective strategy to decarbonize the facility. 

Unilever says this initiative will prevent the release of the highly potent greenhouse gas methane into the atmosphere at these mills.

“When expanding our operations, we must be doing it sustainably. By partnering with KIS, we’ve been able to innovate a solution that will cost-effectively lower our emissions as we continue to grow,” says Saikrishna Devarakonda, managing director of UOI.

However, the use of POME has also raised concerns. A report published in March this year by the non-governmental organization Transport & Environment, refers to POME as “palm oil in disguise.”

The report stresses the need to prioritize POME in local decarbonisation efforts, especially biogas production, and spotlights producing countries, such as Indonesia and Malaysia.

Expanding sustainably?

Indonesia accounts for over half the global palm oil supply, and the ingredient is one of the country’s biggest exports to the US. Personal Care Insights previously reported that the recent US import tariffs caused Indonesia to look for new revenue streams in Africa, the Middle East, Asia, and Europe.

“An estimated forest area of 300 football fields is cleared every hour for palm plantations,” Thomas Collier, CEO at Australian biotech company Levur, previously told us.

Indonesia accounts for over half the global palm oil supply.As consumer demand for more sustainable ingredients increases, companies are searching for other alternatives to palm oil. Levur is creating lab-grown oils for cosmetics applications, which are “identical to natural products without any environmental impact.”

Earlier this year, Colgate-Palmolive entered a multi-year partnership with Dutch biotech firm NoPalm Ingredients to industrialize soap bars made from fermentation-based oil alternatives rather than palm oil.

Unilever says expanding its UOI has been a key strategy for growing its business, and in the last decade, it has invested “heavily” in the facility. “We’re determined to ensure this growth does not come at the cost of our ability to deliver on our Scope 1 and 2 climate target,” says the company.

“We’re really proud to be part of the first commercial offtake of biomethane in Indonesia and are excited to be scaling this work,” says Saikrishna. “But this is only the start. We hope that demonstrating the success of our partnership with KIS will influence other businesses to follow.”