This study aimed to evaluate energy and carbon equivalences (CE) associated with palm oil milling and to evaluate sustainability alternatives for energy consumption. Appropriate ways to reduce carbon emissions were also evaluated. A field survey was carried out to quantify the input and output of energy and materials following the conceptual framework of a carbon-balanced model (CBM), which exclude other non-CO2 greenhouse gases. Survey results indicate that the electrical energy consumption for daily mill start-up averaged 18.7 +/- 5.4 kWh/ton Fresh Fruit Bunches (FFBs). This energy is equivalent to 114.4 +/- 33.2 kWh/ton Crude Palm Oil (CPO) which was found to be offset by that generated in the mills using palm fiber as a solid fuel. Currently, organic residues contained in the wastewater are anaerobically converted to methane. The methane is used as fuel to generate electricity and sold to an outside grid network at a generation rate of 8.1 +/- 2.1 kWh/ton FFB. Based on the CBM approach, carbon emissions observed from the use of fossil energy in palm oil milling were very small; however, total carbon emission from oil palm plantation and palm oil milling were found to be 12.3 kg CE/ton FFB, resulting in the net carbon reduction in CPO production of 2.8 kg CE/ton FFB or 53.7 kg CE/ha-y. Overall, the sum of C-reduction was found 1.2 times greater than that of C-emission. This figure can be increased up to 5.5, if all biomass by-products are used as fuel to generate electricity only. The full potential for carbon reduction from palm oil milling is estimated at 0.94 kW of electric power for every hectare of plantation. This equates to a quantity of 68 kg CE reduced per ton of FFB. Thus, utilization of palm oil biomass can have a significantly high potential as a resource to be used for climate change mitigation by reducing carbon emissions. The findings of this work can be used as a template for policy makers to use in assessing and planning their energy programs. (c) 2012 Elsevier Ltd. All rights reserved.