Asian Agri, part of the Royal Golden Eagle (RGE) group founded by Sukanto Tanoto, manages around 100,000 hectares of oil palm plantations across Indonesia. The company also works closely with independent and plasma smallholders to produce palm oil responsibly. Its aim is to make every stage of the palm oil production process more sustainable.
To do this, Asian Agri is adopting a more circular approach to production, supported by science, technology, and continuous innovation. The circular economy helps companies move away from the traditional “take–make–waste” model by keeping products, components, and materials in use for as long as possible. At Asian Agri, this means finding new uses for by-products from palm oil production and turning what could become waste into valuable resources.
For example, empty fruit bunches (EFB) and bunch ash are returned to plantation blocks as natural fertilisers and soil conditioners. Palm fronds and old trunks from routine upkeep are also placed back on the ground as mulch, helping recycle nutrients and retain soil moisture so new palms can grow well.
Liquid residues are also reused. Palm oil mill effluent (POME) is treated and returned to nearby plantations as fertiliser. Another by-product, palm kernel expeller (PKE), the residue left after oil extraction, is processed into nutritious animal feed.
As a result of these efforts, 58% of empty fruit bunches are reused, while 54% of POME is processed through methane capture facilities.
Circular economy practices also contribute to energy efficiency. For example, palm kernel shells (PKS) are exported for use as renewable fuel in biomass power plants.
Across Asian Agri mills, methane from POME is captured and converted into electricity through 11 biogas plants. Each facility can generate between 1.2 and 2.2 megawatts, enough to power mills, kernel crushing plants, and nearby employee housing. Nearly 90% of the biogas produced is used for operations, supplying about 40% of the company’s total electricity needs. These facilities have helped Asian Agri reduce methane emissions by almost 90%.
Another by-product, mesocarp fibre, is also used as boiler fuel to help power mill operations.
As a result of these initiatives, 96% of Asian Agri’s total energy now comes from renewable sources, with more than 90% used to power mills and kernel crushing plants.
Circular economy practices also support community wellbeing, particularly through responsible water management. Asian Agri draws water from nearby rivers, treats it before use, and cleans it again before safely returning it to the river. Because these waterways are shared with local communities, all discharges must meet strict environmental standards.
Asian Agri also turns wastewater into value by using treated effluent to produce biogas and reusing water within the mill. Through this approach, the company keeps water use between 0.9 and 1 metric ton for every metric ton of fresh fruit bunches processed.
For Asian Agri, the circular economy is an ongoing journey. The company continues to strengthen circular practices across its operations to improve resource efficiency and support more sustainable palm oil production.