AbstractThe disposal of whey and whey permeate derived from the cheese industry is a serious economic and environmental problem. Lactose in whey permeate was used to synthesise polyether polyols from which rigid, low‐density polyurethane foams were prepared. Resultant foams were comparable to those made from commercially available sucrose‐based polyether polyols. Brown‐coloured lactose polyether polyols are characterised by low viscosity and high carbonyl content. Urea incorporated into these polyether polyols yields flame retardant (self‐extinguishing) foams. Urea also reduced the amount of phosphorus and/or halogen based fire retardants needed to make the foams non‐burning. A preliminary economic analysis indicates that whey‐based polyether polyols can be prepared at a cost savings of up to 36% compared to the sucrose c