Demand for palm oil in Thailand has increased as a result of Thai policies promoting the use of biodiesel. This increased demand results in negative effects on ecosystem services and increases environment pollution. Most existing studies focus on global warming impact alone, while other environmental impacts are being overlooked. Moreover, several mitigation options are widely studied but none of them has been investigated for cost-effectiveness. Such information is crucial for decision makers to explore possibilities for improving environmental performance towards sustainable palm oil production in Thailand. Therefore, this thesis aimed to analyse environmental impacts in the past and future, and to explore possibilities for improving environmental sustainability of the palm oil sector in Thailand. These objectives have been met through an integrated environmental assessment by coupling a landscape model and sectoral model which can be seen as the novelty of this thesis.