Malaysia’s best shot at reducing its mammoth amount of plastic pollution may be to make polluters pay, according to industry players who discussed the possibility of introducing an extended producer responsibility (EPR) system within the nation at a roundtable last month.
Malaysia produces close to a million tonnes of post-consumer plastic waste each year. With the country’s plastic recycling rate at just over 35 per cent as of 2023, there are hopes that an EPR system will drastically minimise the amount of plastic entering its landfills and environment.
EPR requires producers to pay for the management and recycling of packaging waste created throughout a project’s lifecycle and is at various stages of adoption around the world.
“The EPR seems to be the best tool by the government to ensure that producers play a role in achieving sustainability,” said Malaysia’s minister for Natural Resources and Environmental Sustainability (NRES) Nik Nazmi Nik Ahmad at the recent Malaysia EPR Roundtable Series, “Enabling a Circular Economy via EPR”.
“Unfortunately, developing a new regulation is only worthwhile if it can be implemented and positively shake up the economic ecosystem,” he said.
With Malaysia’s federal government committed to an eventual phase-out of all single-use plastics, implementing an EPR system has become increasingly urgent.
The Malaysia Plastics Sustainability Roadmap, published in December 2021, is a strategic plan aimed at helping the country achieve plastics circularity and has set a deadline of 2026 for a mandatory EPR system to kick in, following the implementation of a voluntary system.
The minister’s comments reflect the challenges the government has faced in implementing EPR in Malaysia. His predecessor, Tuan Ibrahim Tuan Man, had described a mandatory EPR scheme as one of Malaysia’s core strategies towards plastics sustainability. In line with this objective, industry players established the Malaysian Recycling Alliance (Marea) in 2021 with the aim of tackling consumer packaging waste issues. Marea’s members included leading fast-moving consumer goods (FMCG) companies, such as the local branches of Coca-Cola, Nestlé, Unilever and Tetra Pak, among others.
Nik Nazmi Nik Ahmad, Malaysia’s minister for Natural Resources and Environmental Sustainability, said at the extended producer responsibility roundtable that it is important to provide a “soft landing” to consumers as stakeholders work to reduce plastic pollution. Image: Tomra
Marea has already launched several initiatives with local communities. In April, the alliance partnered with the municipal council of Ampang Jaya, a neighbourhood in Kuala Lumpur, to launch a waste collection programme that would include customised communication, education and public awareness about separating waste and recycling.
An industry player at the EPR roundtable told Eco-Business, however, that collection rates could be vastly improved if there was a regulatory push for its implementation.
Currently, Malaysia’s waste management landscape is largely shaped by the Solid Waste and Public Cleansing Management Act, known locally as Act 672. Although the Act promotes the reduction, reuse and recycling of solid waste materials, it “lacks teeth” as each state is free to decide on whether it should be adopted, pointed out a solutions provider at the roundtable. Only seven out of Malaysia’s 14 states – Perlis, Kedah, Pahang, Negeri Sembilan, Melaka, Johor and the federal territories of Kuala Lumpur and Putrajaya – have implemented it.
However, Malaysia’s National Circular Economy Council, which is chaired by the Housing and Local Government Ministry (KPKT) and comprises relevant federal ministries, state authorities, industry players and civil society stakeholders, recently said it would take a phased approach to mandatory EPR implementation in its National Circular Economy Blueprint, launched on 6 August. Following the council’s inaugural meeting in May, a study would be conducted ahead of drafting a circular economy bill that can be adopted by all states, the council said in a statement.
“EPR is a crucial mechanism to accelerate the comprehensive transition to a circular economy. In this regard, KPKT will engage with retailers and general merchandise companies soon to discuss proposals regarding the phasing out of single-use plastic bags,” the council added.
Getting polluters to pay
The lack of national regulations has not stopped various federal and state authorities from discouraging the use of single-use plastics within their own jurisdictions. On 1 August, NRES issued a circular barring the use of single-use plastics at all government meetings and functions. Meanwhile, the local government of Kota Kinabalu, the capital city of Sabah, announced in June that it would be banning single-use plastic bags effective 1 August. The state of Penang is also preparing to intensify efforts to educate residents on segregating waste at its source, having long discouraged the use of plastic bags by banning its sale on selected days of the week.
However, based on the principles of EPR, the producers of single-use plastics and packaging are responsible for the operational costs of managing and recycling their waste. This includes operating solutions such as deposit return systems (DRS), which offer consumers a financial incentive to return beverage containers, separation of waste at its source, and mixed waste sorting technology.
Like many other countries that have implemented EPR policies, Malaysia’s plastics sustainability roadmap calls for an independent non-profit organisation comprising industry representatives to be the main entity operating the waste management solutions, also known as a producer responsibility organisation (PRO). The roadmap highlighted that Marea has served as a voluntary PRO so far.
At the EPR roundtable, challenges in getting producers to pay for such a system were raised. In neighbouring Singapore, where the government legislated a beverage container return scheme in 2022 as part of its broader EPR policy, the planned start date for the scheme was delayed twice – first from mid-2024 to April 2025 and recently, to 2026. The delays were made at the request of a consortium of beverage producers including Coca-Cola Singapore, F&N Foods and Pokka, which, according to the city-state’s National Environment Agency, will require additional time to implement.
Gintaras Varnas, head of Lithuanian producer responsibility organisation Užstato Sistemos Administratorius said that the deposit amount for beverage containers should be set at a rate that incentivises consumers but disincentivises fraud. Image: Tomra
EPR schemes must be carefully enforced, noted Gintaras Varnas, head of Lithuanian PRO Užstato Sistemos Administratorius (USAD), at the EPR roundtable, adding that it is when producers have the choice of opting out of such schemes that leads to implementation delays and resultant low collection rates. “It is normal for producers to resist any waste management system because it just adds to their costs…but in Europe [they are not given] a choice,” Varnas said. Member states of the European Union are required to adopt EPR principles but can decide what national regulations would best facilitate implementation.
Although Lithuania boasts one of the most successful implementations of a DRS in the world today – capturing nine out of every 10 single-use beverage containers in the market – industry players were initially resistant to the system, Varnas pointed out. However, the government realised in 2013 that relying on a voluntary system yielded low collection rates and implemented a law requiring producers to design and implement a workable system within a year and a half.
“The system is not rocket science, it’s quite easy – all you need is to invest in the machines [to sort the containers], build the collection centre and sign agreements with recyclers,” said Varnas. “[But a] DRS is not a profitable business. It requires three things to work: the first is political will, the second is political will, the third is also political will.”
At the EPR roundtable, Nik Nazmi emphasised the Malaysian government’s commitment to strengthening legislation and policies, promoting plastic waste reduction, and encouraging recycling.
“Through regulatory measures, we aim to create an enabling environment that drives the transition towards a circular economy,” he said.
Ensuring accountability
Investing in solutions should be the responsibility of the PRO, which can help to minimise costs for the government, assist in policymaking and consumer education, and ensure compliance, said Annupa Ahi, vice president and head of Public Affairs in Asia at Tomra. PROs must also account for the costs of early investments required to design and implement the necessary technological systems that will help ensure traceability of beverage containers.
This includes promoting barcodes on every piece of packaging and having the necessary front and back-end systems to register and track those barcodes. The data from this system should be regularly reported and made available to the public to prevent fraud, added Ahi. “On top of that, [the law can also require] specific audits to check that retail systems are up to date, and to audit the data from manufacturers and brand owners,” she said.
Meanwhile, the refund must be must be high enough to incentivise consumers to return beverage containers, but also at an amount that will deter fraud and stop counterfeit bottles from being produced and deposited, said Varnas.
Lithuania’s PRO recommended a 10-euro cent deposit to be returned to consumers after having studied the practices of neighbouring countries, Varnas added. Closer to Malaysia, Singapore also set a deposit of 10 Singaporean cents for its DRS after a public consultation found more than 80 per cent of respondents believed that was a suitable rate.
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A deposit return system is not a profitable business. It requires three things to work: the first is political will, the second is political will, the third is also political will.
Gintaras Varnas, head of Užstato Sistemos Administratorius (USAD)
While no widespread study has been done on consumer receptiveness to DRS in Malaysia, private sector efforts to introduce a DRS have been underway since 2022. Reverse vending machine operator Klean, for instance, has set up 60 machines so far across urban areas in Malaysia to reward consumers for returning clean and intact beverage containers, according to its website.
Klean’s machines use a point system, awarding consumers 10 points for every beverage container deposited. These points, once collected, can be converted into vouchers to be used at selected retailers. Klean says it has collected some 1.2 million containers so far and paid out 500,000 Malaysian ringgit (about US$112,000) to consumers.
In preparing for EPR implementation, Malaysia can reference how such solutions have been enforced in countries such as Lithuania, noted Ahi. “We can make it cost-effective and smart. We don’t need to burden the industry.”
While there is a clear urgency to address plastic waste, the nation’s EPR framework must ultimately be both effective and inclusive, and benefit all segments of society for the system to be successful in the long term, Nik Nazmi said.
“Recall again how convenient plastic is to an ordinary consumer. Our work therefore must not only be underpinned by urgency but also an understanding of the realities on the ground, including in rural, remote and underprivileged areas. We must provide a soft landing for people even as we work to reduce plastic pollution. Finding this balance will be the key to sustainable, deep-rooted success.”
