Comparative environmental and economic assessment of biogas and biodiesel production from palm oil mill effluent (POME)

Palm Oil Mill Effluent (POME) is one of the major by-products of the palm oil industry and represents a promising feedstock for renewable energy production through biogas and biodiesel pathways. This study comparatively evaluated the environmental, energy, and economic performance of biogas and biodiesel production from POME using Life Cycle Assessment (LCA), energy performance analysis, and a preliminary economic assessment. Environmental impacts were assessed using openLCA with the ecoinvent 3.9.1 database and the CML-IA Baseline method under a cradle-to-gate system boundary with a functional unit of 1 ton of treated POME. The biogas pathway consistently exhibited lower environmental impacts than biodiesel across all eleven midpoint impact categories, with Global Warming Potential (GWP) values of 8.10 and 64.7 kg CO₂-eq per ton POME, respectively. Energy analysis showed that biogas achieved a higher Net Energy Ratio (14.41), whereas biodiesel provided greater total energy recovery (178.95 million MJ year⁻¹) and higher specific energy recovery (1,512.3 MJ ton⁻¹ POME). The preliminary economic assessment indicated that biodiesel generated a substantially higher annual gross operating surplus (IDR 62.30 billion year⁻¹) than biogas (IDR 5.25 billion year⁻¹), despite considerably higher operating costs. Overall, the results demonstrate a clear sustainability trade-off: biogas offers superior environmental and energy efficiency, whereas biodiesel provides greater economic returns. These findings provide practical guidance for selecting appropriate POME valorization strategies according to environmental and economic priorities in the palm oil industry.