The importance of energy demands that have increased exponentially over the past century has led to the sourcing of other ideal power solutions as the potential replacement alternative to the conventional fossil fuel. However, the utilisation of fossil fuel has created severe environmental issues. The identification of other renewable sources is beneficial to replace the energy utilisation globally. Biomass is a highly favourable sustainable alternative to renewable resources that can produce cleaner, cheaper, and readily available energy sources in the future. The palm oil industry is essentially ideal for the availability of abundant biomass resources, where the multifaceted residues are vital for energy production through the conversion of biomass waste into value-added products simultaneously. This article discusses the utilisation of palm oil and its residues in the energy and transportation sector. Assessment and evaluation on the feasibility of palm oil and its residues were made on the current valorisation methods such as thermochemical and biochemical techniques. Their potential as transportation fuels were concurrently reviewed. This is followed by a discussion on future challenges of palm oil industries that will take place globally, including the prospects from government and nongovernment organisations for the development of palm oil as a sustainable alternative replacement to fossil fuel. Hence, this review aims to provide further insight into the possibilities of palm oil and its residues towards sustainable development with reduced environmental-related issues. © 2021 by the authors. Licensee MDPI, Basel, Switzerland.