Economic Allocation in Wastewater-to-Energy Life Cycle Assessment: Carbon Value and Mitigation Co-benefits of Palm Oil Mill Effluent in the Global South

The valorization of Palm Oil Mill Effluent (POME) into renewable energy transforms a hazardous waste stream into a valuable co-product, introducing complexities in Life Cycle Assessment (LCA) burden partitioning. This study evaluates the environmental profile of POME-generated electricity and investigates how allocation principles influence the carbon intensity of waste-to-energy initiatives in developing economies. A cradle-to-gate LCA was conducted using primary data from four operational biogas plants in Malaysia, with a functional unit of 1 kWh of electricity. Five allocation methods were compared: cut-off, mass, energy, economic, and substitution-based allocation. Sensitivity analyses were performed to assess the stability of economic allocation against global commodity price volatility. Results indicate that mass allocation assigns a disproportionate upstream burden (72%) to POME, resulting in a prohibitive carbon intensity of 4.57 kg CO 2 e/kWh. Conversely, economic allocation attributes only 1.72% of the burden, resulting in 0.52 kg CO 2 e/kWh, which better reflects the waste status of the effluent. Crucially, when accounting for avoided methane emissions, POME-electricity achieves a net negative impact of -3.8 kg CO 2 e/kWh. The study concludes that POME-electricity offers superior decarbonization potential through methane avoidance. Economic allocation is identified as the most pragmatic framework for process safety and environmental accounting, as it aligns with financial risk-sharing in real-world business ventures. Policymakers are urged to transition toward value-based mechanisms that reward this pollution reduction co-benefit to mobilize private capital for wastewater valorization.