In electrical discharge machining, the material removal phenomenon is heavily influenced by the breakdown strength of the dielectric fluid and the inter-electrode gap monitoring. This innovative research addresses a comparative performance evaluation and sustainability assessment between biodegradable palm oil and conventional EDM oil during machining of stainless steel (SS-316) using copper electrode. The cutting performance is investigated by comprehensive result analysis of various machinability aspects including material removal rate, surface integrity, tool wear rate, radial overcut of machined components. According to the findings, machining with palm oil dielectric outperformed the usual EDM oil with regards to improved material removal, surface morphology and finish, increased machined surface hardness with minimum surface crack density and hole overcut. Pyrolysis of conventional EDM dielectric oil leads to deposition of thin film carbon on bottom surface of the copper electrode which prevents the quick tool wear due to its higher breakdown voltage. The total machining cost expenditure per component under palm oil (INR383) is reduced by 11% than expenditure in traditional EDM oil (INR426). Compared to EDM oil, machining under biodegradable palm oil as dielectric fluid is better socio-economical viable and environmental conscious to enhance sustainability.