This study highlights an innovative piece of hybrid technology, whereby the combination of anaerobic and aerobic processes into a single reactor, namely, the integrated anaerobic�aerobic bioreactor (IAAB) can surpass the limits of conventional methods treating palm oil mill effluent (POME). Optimisation of IAAB using SuperPro Designer V9 simulator for maximum biogas yield while addressing its economic and environmental trade-offs was conducted for the first time. Pa-rameters such as hydraulic retention time (HRT) and organic loading rate (OLR) were optimised in the anaerobic compartment from 10 days and 6.2 g COD/L day to 9 days and 6.9 g COD/L day, respectively. Furthermore, sludge recycle ratio was optimised from 20 to 50 in the aerobic compartment. The optimisation was successful where the biogas yield increased from 0.24 to 0.29 L CH4 /g CODremoved with excellent Chemical Oxygen Demand (COD), and Biological Oxygen Demand (BOD) removal efficiencies up to 99 with 5.8 lower net expenditure. This simulation results were comparable against the pre-commercialized IAAB with 11.4 increase in methane yield after optimisation. Economic analysis had proven the optimised process to be feasible, resulting in return on investment (ROI), payback time, and internal rate of return (IRR) of 24.5, 4.1 years, and 17.9, respectively. © 2021 by the authors. Licensee MDPI, Basel, Switzerland.