31st October 2025
The Smart Mill makes money from its waste streams.
Traditional mill layouts have long relied on open ponds, lagoons, and simple biomass boilers to handle byproducts. While effective in a basic sense, these approaches are increasingly seen as outdated. They result in methane emissions, nutrient losses, and missed opportunities to create value from waste streams.
This blog is derived from : SAWIT INDONESIA VOL.XIII EDISI 168 – OCTOBER / NOVEMBER 2025
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Indonesia is the world’s largest producer of palm oil, with over 45 million tonnes exported annually and millions of hectares under cultivation. The industry is a cornerstone of rural development and foreign exchange earnings. Yet, alongside the benefits, palm oil mills face major sustainability challenges: managing palm oil mill effluent (POME), processing solid residues, and reducing greenhouse gas emissions.
In recent years, a wave of new engineering solutions has emerged. These technologies transform waste into revenue-generating commodities while simultaneously reducing the sector’s environmental footprint. At the centre of this transformation are three pillars: biogas production from POME, biochar from mill residues and digester sludge, and ammonia recovery from digester liquor. Together, these innovations form the backbone of the next-generation palm oil mill: the Smart Mill. One that is not only an oil producer, but also an energy hub, a fertiliser supplier, and a carbon removal facility.
Palm Oil Mill Effluent as Waste to Energy Feedstock
Every ton of crude palm oil generates 2.5–3 tonnes of POME. This effluent is characterised by very high chemical oxygen demand (COD 50,000–75,000 mg/L), total suspended solids (TSS 15,000–20,000 mg/L), oil and grease (2,000–4,000 mg/L), and nutrients including nitrogen and phosphorus.
Simple anaerobic digestion of POME, where optimised performance has not been developed, is now widespread. Covered lagoon systems, and CSTR reactors are routinely employed to create and capture biogas. The outstanding opportunity is to improve performance and reduce costs. The next-generation palm oil mill recognises that POME is not waste. It is raw material to be optimised with advanced anaerobic digestion technology, such as the covered lagoon two-phase anaerobic digester (TPAD) offered by PT Organics Bali. Compared with conventional single-stage digestion, TPAD offers lower capital costs, higher organic-matter removal, faster hydrolysis and digestion kinetics, reduced solids retention time and greater methane yield. The approach here is to treat POME as a valued resource worthy of benefit maximisation.
The Integrated Smart Mill: Turning Waste into Value
Palm oil mills can be transformed from processors into diversified industrial hubs by integrating three key technologies that convert waste products into high-value commodities: Compressed Biomethane (CBM), Biochar, and recovered Ammonia fertilizer. The process begins with upgrading the raw biogas captured from Palm Oil Mill Effluent (POME) into CBM, a high-purity (over 95% methane) renewable fuel.
CBM directly replaces expensive diesel and coal for transport and mill power, significantly lowering operational costs and cutting greenhouse gas emissions by up to 90%. Simultaneously, mill solid residues (like Empty Fruit Bunches) and sludge are converted into biochar via pyrolysis—a process that yields a highly stable carbon-rich product, useful heat, and syngas. Biochar improves soil health and is a leading tool for long-term carbon sequestration, creating an entirely new revenue stream through verified international carbon credit markets.
The final technological component involves recovering valuable ammonia from the digestate liquor, which can have high nitrogen concentrations after biogas production. Using technologies like thermal or pH-assisted stripping, the ammonia is extracted and processed into various fertilizer products, such as ammonium sulphate.
This step not only creates an internal or marketable nutrient source but also reduces the nitrogen load in discharged effluent, helping mills meet strict environmental compliance standards. When combined, the Integrated Smart Mill creates a closed-loop system where energy, nutrients, and carbon are all recovered. This model positions the mill to become carbon-negative and revenue-positive, delivering significant climate impact while improving its financial resilience. For a typical mill, these verified reductions—primarily from methane capture and biochar—can be worth USD 1.3–2.5 million annually in carbon credits alone, before accounting for fuel and fertilizer savings.
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