Eur. J. Lipid Sci. Technol.

109 (2007) 433439

Wolfgang Rupiliusa
Salmiah Ahmadb

DOI 10.1002/ejlt.200600291

433

Palm oil and palm kernel oil as raw materials for

basic oleochemicals and biodiesel

Nuthe-Urstromtal,
Germany
b
Advanced Oleochemical
Technology Centre,
Malaysian Palm Oil Board,
Selangor, Malaysia

The palm oil- and palm kernel oil-producing countries in South East Asia are becoming
the dominant producers of fatty acids and fatty alcohols. The large and very efficient
palm oil plantations are giving the local producers of basic oleochemicals a decisive
competitive advantage. The production of fatty acid methyl esters for use as biodiesel
is expanding all around the world. In tropical countries, the preferred raw material for
biodiesel is palm oil, Europe uses mostly low-erucic rapeseed oil and the USA soya oil.
To a large extent, the growth of biodiesel depends on direct or indirect subsidies for the
agriculture and on tax exemptions. The rapid growth of biodiesel has created an
excess of glycerine, which cannot be absorbed by existing markets. The price for glycerine will probably remain low for the next years and therefore attract investments in
new applications.
Keywords: Palm oil, palm kernel oil, biodiesel, oleochemicals.

1 Introduction

Tab. 2. Productivity of different crops.

Palm oil and palm kernel oil are triacylglycerols that are
produced by the oil palm Elaeis guineensis. The rapid
increase of the production in the last 20 years has made
palm oil the most important oil in the world. In 2006, palm
oil surpassed for the first time the production of soybean
oil [1] (Tab. 1).

Oil

Productivity [MT/Ha.year]

Palm/palm kernel
Coconut
Rapeseed
Sunflower
Soya

4.4
2
1.2
0.7
0.4

Tab. 1. Global production of fats and oils in 2006.

[million MT]

Palm
Soybean
Rapeseed
Sunflower
Palm kernel
Coconut
Animal fats and oils
Others
TOTAL

37
35
16
10
4
3
25
15
145

[%]
25.5
24.2
11.0
6.9
2.7
2.0
17.2
10.5
100.0

It can be expected that in the future palm oil will continue

to outpace the growth of other oils, since in most of the
tropical countries around the equator there are large
expansion programs underway. The reason for the rapid
growth is easy to understand: No other oil-producing crop
has a productivity that comes close to that of the oil palm
(Tab. 2). Todays palm oil plantations produce an average
Correspondence: Wolfgang Rupilius, Consultant, Schnefelder
Chaussee 12, 14947 Nuthe-Urstromtal, Germany. Phone: 149 33
73360937, Fax: 149 33 77336046, e-mail: rupilius@aol.com

of 4 MT of palm oil and 0.4 MT of palm kernel oil per Ha

and per year [2]. Under optimum conditions, the productivity can be even 68 MT per Ha and per year.
Palm kernel oil is extremely important for the oleochemical industry because of its content in short- (C8C10) and
medium-chain (C12C14) fatty acids. Nearly 60% of the
palm kernel oil and about 5% of the palm oil is used for
the manufacture of oleochemicals [3]. Palm oil, which
contains only C16C18 chain lengths, is competing in the
market of oleochemicals with tallow, which in recent
years has been losing ground in several markets. In Europe, for example, due to BSE, tallow has been replaced in
most of the personal care uses by vegetable tallow,
which generally is made from palm oil.
Coconut oil, the only other oil with short- and mediumchain fatty acids of importance, has not been growing in
the last years, and has therefore lost ground to palm kernel oil. The carbon chain distribution of the most important fats and oils for the oleochemical industry is shown in
Tab. 3. The combination of palm oil and palm kernel oil is
practically covering the total needs of the oleochemical

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Review Article

Oil

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W. Rupilius and S. Ahmad

Eur. J. Lipid Sci. Technol. 109 (2007) 433439

Tab. 3. Carbon chain distribution in fats and oils.

Oil or fat

Carbon chain [%]

8

Tallow
Palm
Soya
Palm kernel
Coconut
Rape (L.E.)
Rape (H.E.)

4
8

10

5
7

12

51
48

14

16

18

18:01

18:02

18:03

4
2

30
42
8
7
9
4
2

20
5
5
1
1
5
5

40
41
28
15
7
53
15

5
10
53
2
2
28
15

15
17

20:01

22:01

1
7

1
50

6
1
8
6

industry, with the exception of the chain lengths C20 and

C22, which are only available from high-erucic rapeseed
oil.
Parallel to the development of palm oil and palm kernel
oil, the oleochemical industry using these raw materials
also has been growing rapidly. Especially the large and
very efficient palm oil plantations in Malaysia and Indonesia have been using their strong raw material position in
building up modern world-scale oleochemical plants.
With the exception of biodiesel (methyl esters of fatty
acids) and glycerine, there is practically no growth in the
area of basic oleochemicals in Europe, the United States
or Japan [4].
With production costs of around US$ 250 per MT [3]
and a market price of around US$ 500 per MT for palm
oil, it can be attractive for a palm oil plantation to
invest in fatty acids, methyl esters or fatty alcohols,
even if the margins in these activities at times are very
small. The high productivity and the low cost of production of palm oil and palm kernel oil are moving the
centre of gravity of the oleochemical industry towards
South East Asia.
For biodiesel, the competitive situation is different, since
Europe and the United States, which for the moment are
the biggest markets, are supporting the use of these
locally grown raw materials (rapeseed oil and soya oil)
through subsidies, tax exemptions or trade barriers. In
these markets, biodiesel has been mainly developed in
order to assist the local agriculture.

Fig. 1. Basic oleochemicals.

2.1 Methyl esters

Methyl esters are normally produced by transesterification of triacylglycerols (Fig. 2). In the past, they had only
limited use as intermediates for the production of fatty
alcohols and speciality surfactants. Since the development of biodiesel, methyl esters have become the fastest
growing oleochemicals.

Fig. 2. Transesterification of triacylglycerols.

2.1.1 Biodiesel
Biodiesel B100 is essentially a fatty acid methyl ester that
contains small amounts of additives (antioxidants, fluidity
improver, etc.) that make it suitable to be used as fuel.
Biodiesel B5 is a blend of 5% methyl ester and 95% petroleum diesel [57].

2 Basic oleochemicals

2.1.1.1 Raw materials

Methyl esters, fatty acids, fatty alcohols and glycerine are

called basic oleochemicals [4], and they can be produced
from palm oil or palm kernel oil (Fig. 1).

For the production of biodiesel, several different triacylglycerols are used today. Europe is focused on the
use of locally grown rapeseed oil, Argentina, Brazil and

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Eur. J. Lipid Sci. Technol. 109 (2007) 433439

the USA focus on soya oil, Malaysia, Indonesia, Thailand, Colombia and Ecuador on palm oil, the Philippines on coconut oil, and Australia on tallow. The
selection of the raw materials clearly indicates that
agricultural policies by the different countries play an
important role in the biodiesel industry. Not always the
most economical raw material is selected, but the one
that can be produced by the local agriculture. The
market prices for the different raw materials can be
seen in Tab. 4. The prices may fluctuate, but in general
the relation to each other remains about the same.
Only palm kernel oil and coconut oil at times are more
expensive than rapeseed oil. In Europe, more than
50% of the rapeseed oil is used for the production of
biodiesel. Therefore, the rapeseed oil price is already
heavily influenced by the development of the petroleum price.

Tab. 4. Approximate market price for different biodiesel

raw materials (January 2007).
Triacylglycerol

Market price [US$ per MT]

Rapeseed oil
Palm kernel oil
Soybean oil
Palm oil
Tallow

840
690
660
600
580

Since the biodiesel yield and the conditions of reaction

are approximately the same for the different raw materials, it is clear that biodiesel from rapeseed oil will always
need some kind of protection in order to remain competitive.
Besides the raw material cost, quality issues play an
important role in the biodiesel industry. Every region is
introducing quality standards suited for the locally
favoured oil crop. For Europe the EN 14214 and for the
USA the ASTM 6751 is valid.
About 70% of the global production of biodiesel is based
on rapeseed oil [8]. Until now, palm oil plays only a minor
role as a raw material, with less than 5% of the total biodiesel market. With the projects being carried out in
Malaysia, Indonesia, Thailand, Colombia and Ecuador,
the share of palm oil as raw material for biodiesel will certainly increase in the future. It is interesting to note that in
Europe more palm oil is used directly as a fuel than palm
oil-based biodiesel. In 2005, about 500,000 MTof palm oil
were used in Europe as a fuel for the generation of electricity.

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PO and PKO as raw materials for basic oleochemicals

435

2.1.1.2 Quality issues

The quality specifications (impurities, IV, acid value, etc.)
for biodiesel vary from country to country. The most
important quality parameters for the performance of biodiesel are the cetane value and the cold filter plugging
point (CFPP). The higher the level of saturation of the
biodiesel, the higher will be the cetane value. Short carbon chain lengths and/or a high level of unsaturation lead
to a low CFPP (Tab. 5). Petrol diesel in Europe has a
cetane value of 5054. A high IV facilitates the oxidation of
the biodiesel and the formation of gums. Therefore, the
best overall properties are obtained with palm kernel oil or
coconut oil (low IV, high cetane value and low CFPP).
Through additives and/or modifications of the level of
unsaturation of the biodiesel, the CFPP can be adapted to
the climatic requirements of most regions. By eliminating
a part of the high-melting saturated C16-methyl esters
and with additives, a biodiesel for cold climate can also
be obtained from palm oil [9].
The blending of biodiesel from soya oil with biodiesel from
palm oil is also practised on a small scale in Europe, in
order to reduce the high CFPP of palm oil. At the same
time, the high IV of soya-based biodiesel can be reduced
below the maximum level tolerated by the EN 14214
(IV ,125).
Besides the mentioned triacylglycerols, used frying oils
are also raw materials for the production of biodiesel.
Tab. 5. CFPP and cetane values of different qualities of
biodiesel.
Diesel quality

Cetane value

CFPP

IV

Rapeseed
Soya
Palm
PKO/CNO

55
53
60
70

212
210
10
28

110
130
45
15

PKO, palm kernel oil; CNO, coconut oil.

2.1.1.3 Manufacturing technologies

The most important manufacturing technologies for the
production of biodiesel are presented in Tab. 6.
By far the largest amount of biodiesel is produced from
neutral triacylglycerol and sodium methoxide as catalyst
(more than 70% of the global production). The technology
that utilises potassium hydroxide as catalyst has been
specifically developed for used fats or fats and oils that
have up to 5% free fatty acids. Potassium hydroxide is
used because the separation of the large amounts of
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W. Rupilius and S. Ahmad

Eur. J. Lipid Sci. Technol. 109 (2007) 433439

Tab. 6. Technologies for the production of biodiesel from triacylglycerols.

Technology

Catalysts

Raw materials

Reaction conditions

By-products

Lurgi, De Smet-Ballestra,
Bernardini, MPOB

Sodium methoxide
(homogenous)

Neutralised oils

6070 7C

Glycerine, sodiumchloride

Energea, BDI, Agrar Technik

Potassium hydroxide
(homogeneous)

Oils with acid value

2040 7C

Glycerine, potassium
sulphate or phosphate

IFP

Zinc aluminate (heterogeneous)

Oils with acid value

,200 7C,50 bar

Glycerine

MPOB, Malaysian Palm Oil Board; BDI, Biodiesel International; IFP, Institute Francais du Petrole.

potassium soap formed in the process from the biodiesel

and the glycerine is easier to achieve than if sodium hydroxide is used as catalyst. The potassium soaps are
reacted with sulphuric or phosphoric acid; and the
recovered salts (potassium sulphate or phosphate) can
be used as fertilisers.
The new technology developed by the Institute Francais
du Petrole (IFP) uses a heterogeneous zinc catalyst which
esterifies the free fatty acids and also acts as a transesterification catalyst. The process produces glycerine of
high purity and does not need any additional chemicals
[10]. The disadvantage of this process is the fact that it
requires a large excess of methanol, which must be dried
and recycled, and that the reaction must be carried out at
high temperature and pressure. The IFP technology will
gain acceptance in large biodiesel plants which are
installed in manufacturing locations with good infrastructure.

In 2007, Germany will introduce an obligatory quota of

4.4% biodiesel in petrol diesel. Since Germany consumes
around 3032 million MT petrol diesel per year, it means
that around 1.4 million MT biodiesel will be absorbed by
this market. The remaining production of biodiesel will
have to be sold as B100 in the open market, which competes with petrol diesel. At the same time, the German
government has indicated that for B100 a gradual
increase of the fuel tax will be introduced, so that by 2012
biodiesel and petrol diesel will have the same tax load
(around e0.50 per litre).It is very likely that under these
conditions, Germany will become a net exporter of biodiesel in 2007.
At this moment, it is difficult to see where the large capacities of palm-based biodiesel that are being installed
in South East Asia and South America will be sold, since
many of these investments are being made with the
intention of exporting to Europe.

2.2 Alternatives to biodiesel

2.1.1.4 Markets for biodiesel

Germany, the biggest single biodiesel market in the world,

consumed 2 million MT in 2005. From this consumption,
1.6 million MT were produced in Germany and 0.4 million
MT were imported. Towards the end of 2006, Germany
had an installed biodiesel capacity of around 3.5 million
MT per year.

The European car industry is clearly focusing on B5 or

B10. B100 will not be introduced on a large scale for
passenger cars, since the development of engines and
pollution control systems for the limited amount of B100
available cannot be economically justified. For the same
reasons, the petroleum companies do not want to invest
in the separate biodiesel filling infrastructure required for
B100. Therefore, in the future, most of the biodiesel will
probably be sold as B5 or B10. If this is the case, it can be
questioned whether biodiesel is required for this use. The
main reason for the development of biodiesel was the fact
that the viscosity of triacylglycerols is to high for the direct
use as a 100% replacement for petrol diesel. With the
transformation into methyl esters, the viscosity could be
reduced to the level of petrol diesel. If only 5 or 10% of
triacylglycerol is added to petrol diesel, the viscosity
remains within the acceptable limits. Malaysia has
recognised this and is introducing in 2007 Envodiesel, a
blend of 5% palm olein and 95% petrol diesel [11].

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Until the early 1990s methyl esters in general were only

important as intermediates for the production of alcohols.
Small quantities were also used as intermediates for the
production of speciality surfactants (alkanol amides,
betaines, imidazolines, etc.). With the development of
biodiesel, methyl esters became the fastest growing
basic oleochemical compounds. In 2005, the worldwide
production of biodiesel was around 4 million MT. At the
moment, more than 100 biodiesel plants are in planning
or under construction, with a total capacity of around
8 million MT per year.

Eur. J. Lipid Sci. Technol. 109 (2007) 433439

PO and PKO as raw materials for basic oleochemicals

In France, successful trials have been carried out with

blends of sunflower oil and petrol diesel, and also in Germany similar trials are being carried out with rapeseed oil.
This alternative concept avoids the investment in biodiesel units and resolves the problem of the disposal of
glycerine.
The automobile and petroleum industries are focusing on
the transformation of coal and natural gas via the Fischer
Tropsch process for the large-scale production of synthetic diesel [12, 13]. In South Africa, Malaysia and Qatar,
the first large-scale plants are producing high-quality
synthetic diesel fuel through this technology. These socalled designer fuels can be adapted to any diesel
engine and can be sold through the existing diesel service
stations system without any investment. For the longer
term, the transformation of biomass into synthetic diesel
is also being considered as a serious alternative to petrol
diesel and biodiesel. The German company Choren is
planning to build several large-scale plants of sun diesel
based on biomass [14].

2.3 Fatty acids

Although the petrochemical industry has developed a
technology for the production of synthetic fatty acids,
even in times of low-priced petroleum they only played a
minor role. Only acids with alkyl branching in the carbon
chain, and acids with odd-number carbon chains, which
are not produced by nature, are manufactured today from
petrochemical raw materials.
For fatty acids with C16C18 chains, the most important
raw materials are palm oil and tallow, whereby tallow is
losing ground. As a result of BSE, for example, the personal care industry in Europe has replaced tallow fatty
acids largely by vegetable tallow fatty acids which are
made through modification of palm oil fatty acids or from
the C16C18 fraction of palm kernel oil fatty acids. There is
a general tendency to replace animal-based fatty acids by
vegetable fatty acids. Tab. 7 shows the development of
the fatty acid production in the world. There are practically no investments in fatty acid capacity in Europe or the
United States. The capacity expansion comes exclusively

America

Europe

Asia

Total

[million MT/year]
2000
2003
2006

1.1
1.1
1.1

1.7
1.6
1.6

2.5
3.0
4.5

from Asia, and here the palm oil-producing countries

Malaysia and Indonesia are becoming the dominant producers. China is the only country that does not have palm
oil plantations and is strongly increasing the fatty acid
production capacity. Several new plants in China are joint
ventures in which Malaysian or Indonesian palm oil plantations have a financial participation.
The main reason for the strong expansion in Malaysia and
Indonesia is due to the competitive advantage of backward integrated fatty acid-producing companies. Many of
the large palm oil plantations are involved in the manufacture of fatty acids in order to have an additional outlet
for their products that is independent from the food
industry.

2.4 Fatty alcohols

Fatty alcohols are not only produced through hydrogenation of fatty acids or fatty acid methyl ester (even-numbered carbon chains) but also through synthesis using
petrochemical raw materials (even- and odd-numbered
carbon chains). The production of fatty alcohols is today
more economical than the synthesis from petrochemical
raw materials, due to the rapid increase in the price of
petroleum.
Tab. 8 shows that in the last years, synthetic fatty alcohols
(made from petroleum or coal) have been constantly losing ground to oleochemical fatty alcohols. This tendency
will continue throughout the next years, since there are
natural alcohol plants in construction and planning, with a
total capacity of more than 500,000 MT per year. All of the
investments in new fatty alcohol plants are based on
oleochemical raw materials. Since about 80% of the fatty
alcohol market is in the range of C12C14 alcohols, lauric
oils are the main raw materials. Most of the new plants are
being installed in Malaysia and Indonesia and use palm
kernel fatty acids or methyl esters as raw material. The
production in Europe and the United States will remain
constant or even decrease (Tab. 9). Outside of Asia, only
in Brazil a new fatty alcohol unit, being built by Oxiteno,
will go on stream in 2007.

2.5 Glycerine

Tab. 7. Global fatty acid production capacity.

Year

437

5.3
5.7
7.2

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The rapid increase in fatty acid, fatty alcohol and methyl

ester (biodiesel) production is creating a large excess of
glycerine, which the existing markets cannot absorb. As a
result, the prices of refined and crude glycerine have been
falling during the past years. In some areas of the world,
the price level is so low that not all of the glycerine coming
from biodiesel plants is distilled and purified. The cost of
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W. Rupilius and S. Ahmad

Eur. J. Lipid Sci. Technol. 109 (2007) 433439

Tab. 8. Origin of fatty alcohols.

Year

Petrochemical

Oleochemical
[%]

1980
1990
2000
2010 exp.

64
52
40
.35

Fig. 3. Production of glycerine and epichlorhydrine.

36
48
60
,65

Tab. 9. Global fatty alcohol production capacity (from

petroleum, coal and fats and oils).
Year

USA

Europe

Asia

South
Africa

Total

100
100

1700
1800
2100
2300

Fig. 4. Production of 1,2-propylene glycol.

[1000 MT/year]
1994
1998
2002
2006

600
500
600
500

600
700
800
800

500
600
700
900

distillation and purification are in the range of US$ 300 per

MT, and in some cases it is more attractive to use the
crude glycerine as feed additive for cattle, as a fuel, or as
a raw material for the production of biogas.
At the moment there is an enormous amount of research
being carried out by government organisations and private enterprises with the aim of finding new uses for
glycerine, since the falling glycerine prices are affecting
the ability of biodiesel to compete with petroleum diesel.
In 2006, the last plant that produced synthetic glycerine
from epichlorhydrine, which is made from propylene, was
closed. In 2007, we will have the curious situation that
Solvay will start to produce epichlorhydrine from glycerine in France [15] (Fig. 3). Dow Chemicals has indicated
that it is working on a similar project [16]. Epichlorhydrine
is used in large quantities as a raw material for the production of epoxy resins.
Through selective hydrogenation of glycerine, it is possible to obtain 1,2-propylene glycol, which until now has
been made from propylene (Fig. 4).
Until recently, 1,3-propylene glycol was only produced
either from acrolein or ethylene oxide. A new technology
developed by Genencor and DuPont [17] allows the production of 1,3-propylene glycol through fermentation of
glucose. This fermentation can also be carried out with
the crude glycerine solution (sweet water) that is
obtained in the hydrolysis of fats and oils [18] (Fig. 5).
Sweet water is today the lowest-cost raw material for the

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Fig. 5. Production of 1,3-propylene glycol.

manufacture of 1,3-propylene glycol. 1,3-Propylene glycol is becoming an important raw material for the production of polyester fibres with special properties.
Research is also carried out in the area of polymerisation
of glycerine. Polyglycerine is hydrophilic and can replace
polyethylene glycol (which is made from ethylene oxide) in
certain surfactants.

References
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[3] S. Ahmad: State of the art and future of palm oleochemistry in
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[4] W. Rupilius: The changing world of oleochemicals. OFIC
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[5] G. Knothe, J. Van Gerpen, J. Krahl: The Biodiesel Handbook.
AOCS Press, Champaign, IL (USA) 2005.

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[6] Journey to forever. http://journeytoforever.org/biodiesel_
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[12] ACTED consultants: Gas to liquids. http://www.chemlink.

com.au/gtl.htm
[13] Volkswagen AG: SunFuel The way to sustainable mobility.
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[14] Choren Industries GmbH: Erneuerbare Energien aus nachwachsenden Rohstoffen. http://www.choren.de/cgi-bin/
index.cgi
[15] M. McCoy: Glycerin surplus. Chemical & Engineering News
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[16] P. Smith: Dows Biomaterial Program. http://www.sobin.ca/
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[17] L. A. Laffend, V. Nagarajan, C. E. Nakamura: US Patent
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[18] http://www.biodiol.org
[Received: December 7, 2006; accepted: February 1, 2007]

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