PALMOILMAGAZINE, SEI MANGKEI – Unilever is taking bold steps to strengthen transparency and sustainability across its palm oil supply chain. By working directly with growers and mills, the global consumer goods giant is cutting out traditional intermediaries and bringing much of its refining process in-house.
At the heart of this strategy lies the expansion of Unilever Oleochemical Indonesia (UOI) in Sei Mangkei, North Sumatra. The facility plays a pivotal role in supplying ingredients for Unilever products worldwide. However, its growth has also made UOI the company’s single largest source of greenhouse gas (GHG) emissions. To meet its ambitious target of cutting Scope 1 and 2 emissions by 100% by 2030 (from a 2015 baseline), Unilever has turned to renewable energy solutions.
The latest innovation: biomethane, a renewable energy derived from palm oil mill effluent (POME). In partnership with KIS Group, one of Asia’s leading biogas providers, Unilever has begun replacing natural gas at UOI with biomethane sourced from two partner mills already enrolled in its sustainability program. Even the transportation of biomethane to the facility uses trucks powered by bio-CNG, reinforcing the clean energy cycle.
“We want to ensure our business expansion goes hand in hand with sustainability. Partnering with KIS allows us to cut emissions in a way that is both innovative and efficient,” said Saikrishna Devarakonda, Managing Director of UOI, in an official statement (25 August 2025).
Looking ahead, Unilever plans to collaborate with a third mill by the end of 2025 and add six more within the next two years. By 2030, UOI aims to meet nearly a quarter of its total energy needs with biomethane—equivalent to more than 800,000 MMBtu annually.
This effort is not only key to Unilever’s decarbonization agenda but also offers wider benefits for Indonesia. According to KIS Group, Indonesia’s POME potential could generate biomethane equal to more than 5% of the nation’s natural gas consumption. “It’s a win-win: Unilever cuts emissions while Indonesia moves closer to energy self-reliance,” said KR Raghunath, CEO of KIS Group.
The initiative also prevents harmful methane leaks into the atmosphere, while leftover solids from the biomethane process are repurposed as organic fertilizer for nearby plantations. This ensures that palm oil supply chains become not just more sustainable but also more economically beneficial for local communities.
“We are proud to be part of Indonesia’s first commercial biomethane offtake. This is only the beginning, and we hope it inspires others to embrace the transition to clean energy,” Saikrishna concluded. (P2)
