The present reality is that we have to deal with environmental deterioration. Mitigation using the life cycle assessment (LCA) concept must be viewed as an investment for our future generations, if not for ourselves, because efforts in mitigation of environmental degradation will translate into a concerted effort to combat the many environmental impacts resulting from mismanagement of natural resources and energy. The oil palm fresh fruit bunches (FFB) are a unique crop product. Two types of oil can be obtained from this raw material. Crude palm oil (CPO) is obtained from the mesocarp while palm kernel oil is obtained from the kernel within the nut. CPO is processed at palm oil mills, and the kernels which are removed from the cracked nuts is a by-product at the palm oil mills as has been discussed in the Part 3 article. These kernels are then transported by trucks to kernel-crushing plants that process the kernels into crude palm kernel oil (CPKO). The objective of this study is to identify the potential environmental impacts associated with the production of CPKO, and to evaluate opportunities to overcome the potential impacts. This study has a cradle-to-gate system boundary. This resulting article is part of LCA of the whole palm oil supply chain which is linked to the upstream LCA for nursery (Part 1), plantation (Part 2) and palm oil mill (Part 3). The article examines the life cycle impact assessment (LCIA) of the production of 1 t of CPKO at the kernel-crushing plant. For this study, six kernelcrushing plants were chosen for their locations which were well-distributed all over Peninsular Malaysia. Five kernel-crushing plants were located near the ports, while the remaining plant was located right beside a palm oil mill. This selection strategy was carried out to examine the different scenarios that exist in Malaysia, and also to ensure that they were representative of the scenarios of all kernel-crushing plants in Malaysia. Inventory data collection consisted of inputs and outputs of materials and energy. LCIA was carried out using the Simapro software version 7.1, and the Eco-indicator 99 methodology was selected. Based on the results, the main impacts from upstream activities were from fertilizer production and application, and biogas emissions. The impacts directly associated with the production of CPKO were mainly from the transportation of palm kernels from the palm oil mills to the kernel-crushing plants and from the electricity consumption from the grid for the processing of the CPKO. The best scenario for the production of CPKO with the least environmental impact was when the kernel-crushing plant was integrated with a palm oil mill which captured the biogas. * Malaysian Palm Oil Board, P. O. Box 10620, 50720 Kuala Lumpur, Malaysia. E-mail: vijaya@mpob.gov.my