The desiccated coconut (DC) industry is one of the major export oriented food processing industries in Sri Lanka. This paper discusses the production processes, types of fuel used, energy use pattern and the overall specific thermal and electrical energy consumption in the DC sector. An analysis of the energy use highlights the inefficient processes and the key energy loss areas. Options for energy conservation in the DC mills have been discussed, and carbon dioxide emissions from this sector and its mitigation potential are estimated. Other options to improve efficiency and reduce other, pollution and policy aspects have been presented.