Crude palm oil contains free fatty acids, gums, pigments, metals, moisture, and odor compounds that must be removed during refining while preserving nutrients.

Chemical and physical refining are the primary methods used by the industry. Both produce RBD palm oil but differ in process, equipment, by-products, and cost.

Overview of Palm Oil Refining

Palm oil refining generally consists of four main stages:

• Degumming
• Neutralization or deacidification
• Bleaching
• Deodorization

The removal of free fatty acids (FFA) is the primary distinction between chemical and physical refining.

• An alkali solution is used to neutralize FFA during chemical refining.
• In physical refining, FFA are removed by high-temperature steam distillation during deodorization.

This distinction influences equipment configuration, operating cost, oil yield, and product quality.

Chemical Refining Process

Process Description

Chemical refining removes free fatty acids through an alkali neutralization step. The usual process flow consists of:

• Degumming is the process of removing phospholipids using acid or water.
• Neutralization – Caustic soda (NaOH) reacts with FFA to form soapstock.
• Washing and Drying – Removes residual soap and moisture.
• Bleaching: Adsorbent clay eliminates trace metals and colors.
• Deodorization—Variable chemicals are eliminated by steam distillation.

The reaction in the neutralization stage can be summarized as:

FFA + NaOH → Soap + Water

The soapstock must then be separated via centrifugation.

Key Characteristics

• Operates at lower deodorization temperatures compared to physical refining.
• Generates soapstock as a by-product.
• Requires wastewater treatment due to the washing steps.
• Better suited for oils that include a lot of phosphatides.

Physical Refining Process

Process Description

Physical refining eliminates the neutralization step. Instead of using alkali, it relies on steam distillation to remove FFA at high temperature and vacuum.

The typical process flow includes:

• Acid Degumming (or dry degumming) – Ensures minimal residual phosphorus.
• Bleaching – Removes pigments and trace impurities.
• High-Temperature Deodorization – Steam distillation removes FFA and odor compounds.
• Palm fatty acid distillate (PFAD) is the result of distilling the free fatty acids.

Key Characteristics

• No alkali neutralization.
• No soapstock generation.
• Higher deodorization temperature.
• Produces PFAD as a valuable by-product.
• Reduced production of wastewater.

Fundamental Distinctions Between Chemical and Physical Refining

Process Flow Comparison

Parameter	Chemical Refining	Physical Refining
FFA Removal Method	Alkali neutralization	Steam distillation
Neutralization Step	Required	Not required
Washing Stage	Required	Not required
Deodorization Temperature	Moderate	High
By-product	Soapstock	PFAD
Wastewater Generation	Higher	Lower

Free Fatty Acid Removal Mechanism

When refining chemicals:

• Soap is made chemically from FFA.
• Entrainment in soapstock causes oil losses.
• Additional separation equipment is needed.

In physical refining:

• High temperatures and vacuums cause FFA to evaporate.
• Distillation separates fatty acids from triglycerides.
• Higher energy demand but better oil yield.

Yield and Losses of Oil

Aspect	Chemical Refining	Physical Refining
Neutral Oil Loss	Higher (due to soapstock)	Lower
Overall Yield	Slightly lower	Higher
By-product Value	Moderate (acid oil)	Higher (PFAD)
Processing Efficiency	Moderate	High

Physical refining generally provides better oil recovery, especially for palm oil, which naturally has low phosphatide content.

Equipment and Investment Differences

Chemical Refining Equipment

• Neutralization tanks
• Caustic dosing system
• Washing centrifuges
• Soapstock handling system
• Wastewater treatment unit

Physical Refining Equipment

• Advanced degumming unit
• High-vacuum deodorizer
• Efficient heat recovery system
• Fatty acid distillate condenser

Because physical refining operates at higher temperatures and vacuum levels, it requires more robust stainless steel construction and vacuum systems.

Operational Conditions Comparison

Operating Parameter	Chemical Refining	Physical Refining
Temperature (Deodorization)	220–240°C	240–270°C
Vacuum Level	Moderate	High (2–4 mbar)
Chemical Usage	High (NaOH)	Low
Steam Consumption	Moderate	Higher
Effluent Volume	Higher	Lower

Physical refining typically requires greater thermal energy but fewer chemicals and less water.

Environmental Considerations

Chemical refining generates:

• Soapstock
• High wastewater load
• Chemical sludge
• Higher effluent treatment costs

Physical refining:

• Minimizes wastewater
• Avoids alkali discharge
• Produces PFAD, which can be used in biodiesel, soap, and oleochemical production
• More environmentally sustainable

In modern palm oil mills that prioritize sustainability and environmental compliance, physical refining is often preferred.

Suitability for Different Oil Types

Oil Type	Preferred Method
Palm Oil	Physical Refining
Soybean Oil	Chemical Refining
Rapeseed Oil	Chemical Refining
Coconut Oil	Physical Refining

Palm oil has:

• Low phosphatide content
• High free fatty acid levels
• Stable triglyceride structure

These characteristics make it ideal for physical refining.

Quality and Nutritional Impact

Both methods aim to produce high-quality RBD palm oil. However:

Chemical refining:

• Milder deodorization
• Slightly better retention of some minor nutrients
• More stable color control

Physical refining:

• Some heat-sensitive chemicals may be reduced by higher temperatures.
• Better removal of odor and FFA
• Lower residual phosphorus

Modern physical refining systems use optimized temperature profiles to preserve tocopherols while ensuring FFA removal.

Cost Comparison

Capital Expenditure (CAPEX)

Cost Element	Chemical Refining	Physical Refining
Equipment Cost	Moderate	Higher
Installation Complexity	Moderate	High
Utility Infrastructure	Moderate	High

Physical refining generally requires more sophisticated vacuum and heat recovery systems.

Operating Cost (OPEX)

Cost Category	Chemical Refining	Physical Refining
Chemicals	High	Low
Steam	Moderate	High
Water	High	Low
Waste Treatment	High	Low
Oil Loss	Higher	Lower

Over time, physical refining may offer better profitability due to higher oil yield and lower chemical cost.

By-Product Utilization

Chemical Refining:

• Produces soapstock
• Soapstock can be acidulated to produce acid oil
• Lower market value

Physical Refining:

• Produces PFAD (Palm Fatty Acid Distillate)
• Valuable feedstock for biodiesel
• Used in soap and oleochemical industries
• Higher commercial value

The market demand for PFAD significantly enhances the economics of physical refining.

Process Control Complexity

Chemical refining:

• Easier to control
• Less sensitive to phosphorus level
• More forgiving with variable crude oil quality

Physical refining:

• Requires strict control of degumming
• Residual phosphorus must be below 5 ppm
• Highly dependent on crude oil pretreatment

Therefore, feedstock quality plays a critical role in selecting the refining method.

Why Physical Refining Dominates in the Palm Oil Industry

Most modern palm oil refineries adopt physical refining because:

• Palm oil has naturally low phosphatide levels
• Higher oil yield improves profit margin
• Lower wastewater generation meets environmental regulations
• PFAD has strong downstream demand
• Reduced chemical dependency lowers operational complexity

However, chemical refining remains relevant in certain regions and applications where crude oil quality fluctuates significantly.

Concluding Comparative Analysis

Aspect	Chemical Refining	Physical Refining
FFA Removal	Neutralization	Steam Distillation
Oil Yield	Lower	Higher
Environmental Impact	Higher	Lower
Chemical Usage	High	Minimal
By-product Value	Moderate	High
Process Complexity	Moderate	Higher
Suitability for Palm Oil	Acceptable	Ideal

The key difference between physical and chemical refining in palm oil processing is how free fatty acids are removed. Chemical refining uses alkali neutralization, producing soapstock and wastewater, while physical refining applies high-temperature steam distillation to generate palm fatty acid distillate.

Physical refining is now preferred due to higher oil yield, lower environmental impact, and better economic returns. However, chemical refining remains suitable for variable crude oil quality and requires lower initial investment.

The best method depends on crude oil characteristics, plant capacity, regulations, energy costs, and market strategy. For most modern operations, physical refining offers greater long-term efficiency and sustainability.