Malaysia is one of the largest palm oil producers in the world. In 2022, 5.67 million hectares of oil palm plantations in Malaysia produced 18.4 million tons of crude palm oil (CPO). Empty fruit bunches (EFB), palm kernel shells (PKS), mesocarp fibers (MF), boiler ash, and palm oil mill effluent (POME) are examples of solid and liquid biomass waste produced by the palm oil mill sector in vast amount. These biomass wastes can be used not only as a nutrient-rich resource for the production of organic fertilizer for plantations but also as a feedstock for renewable energy in alternative management. In this study, input–output management for sustainable waste production of two different palm oil mills production capacity in Terengganu is evaluated and tracked using material flow analysis. The results showed that the empty fruit bunches (EFB) were the largest potential solid biomass in terms of quantity and energy generated compared to other waste, which is generated from fresh fruit bunches (FFB) around 22% (3300 ton/month) for mill 1 and 20% (1583 ton/month) for mill 2, respectively The empty fruit bunches were returned to the plantation as additional fertilizer to reduce input costs under conventional management, but there are several alternative management options for empty fruit bunches that provide additional benefits to oil mills. The results also showed that palm oil mills have already self-managed their energy consumption derived from palm kernel shells and mesocarp fiber. All production of 750 ton/month PKS and 2190 ton/month MF from mill 1 and 474 ton/month PKS and 1187 ton/month MF from mill 2 were used for boiler steam generator. Meanwhile, POME is treated before it is applied to land as fertilizer or discharged into rivers. As more and more of the palm oil mill biomass is utilized, a symbiotic relationship develops where “waste” becomes an input to other industries known as by-products. This leads to a zero-waste route for the palm oil industry, especially toward achieving sustainable biomass waste management. In conclusion, this study recommends various options for alternative biomass wastes utilization to contribute to the sustainable palm oil production, which is important to the economic growth and sustainable development of Malaysia.