Mapping Malaysia’s Journey Towards Becoming a Circular Economy

15 November 2023

The Covid-19 pandemic revealed the extent to which food and resource ecosystems rely global supply chains. At the same time, customers emerged with increased awareness and demand for products that were kinder on the environment, more efficient with energy use, and with a smaller carbon footprint. This has led to conversations in Southeast Asia – and by extension, Malaysia – about creating circular economies.

A circular economy promotes responsible consumption and production practices by adopting principles such as reducing by design and value retention (e.g., recycling, reusing, repurposing) as well as extending products’ lifecycles. Its benefits include lowering emissions, reducing waste generation and pollution, lessening the need for natural resource extraction, increasing employment opportunities, and contributing to several United Nations Sustainable Development Goals (UN SDGs).

The circular economy holds particular promise for achieving SDGs 6 on clean water and sanitation, 8 on decent work and economic growth, 11 on sustainable cities and communities, 12 on responsible consumption and production, 13 on climate action, 14 on life below later, and 15 on life on land.

Transforming the Waste Hierarchy

Source: Malaysia’s green and circular economy (EY, 2021)

Four key areas where circular economy efficiencies can create a significant impact for Malaysia are in manufacturing (e-waste), plastics, biomass, and solid waste management. Malaysia is one of the top producers of fossil fuel plastic products, with a sales turnover of RM61.8 billion in 2022, according to the Malaysian Plastics Manufacturers Association.

Source: MIDA, 2021

Reducing single-use plastics

Image by Reuters & MalaysiaKini

The recycling rate in Malaysia was at 33.2% in 2022 and is expected to achieve 40% in 2025. However, not all plastic products can be recycled. Some of it is disregarded by the waste collectors due to hazardous or economic reasons . Most plastic packaging is produced from seven grades of plastic that are largely incompatible with each other, and are costly to sort for recycling.

Apart from PET, or Polyethylene terephthalate, and high-density Polyethylene (HDPE), five other plastic types might be collected but are rarely recycled.

About 75% of global plastics produced are thermoplastics that can be melted and molded over and over to produce new plastics. The remaining 25% of plastics are thermoset plastics that do not soften when exposed to heat, making them near-impossible to recycle, such as plastic used in electrical insulation, ropes, belts, and pipes.

To address these challenges and simplify awareness about single-use plastics, the Government in 2018 launched Malaysia’s Roadmap Towards Zero-Single Use Plastics 2018-2030. One key method to reduce the amount of plastic sent to landfills is to improve the recycling process for difficult-to-recycle plastics – such as laminates often used in packaging – to be more energy efficient or less hazardous.

Nuclear Technology to Manage Plastic Waste

The International Atomic Energy Agency (IAEA) is spearheading a novel approach to reduce plastic pollution volumes using nuclear technologies as part of the IAEA NUclear TEChnology for Controlling Plastic Pollution (NUTEC Plastics) initiative. An ongoing NUTEC Plastics project aims to tackle plastic pollution in Southeast Asia by upcycling plastic waste—transforming it into value-added products—using radiation technology. Malaysia is one of four pilot countries for the NUTEC Plastics initiative.

NUTEC Plastics uses nuclear technologies to monitor and conduct impact assessments on marine microplastics, while reducing plastic waste volumes through upcycling and recycling.

Malaysia is collaborating with private partners to incorporate radiation technology into advanced plastic waste recycling of difficult-to-recycle plastics. This combined advanced recycling approach, radiation-assisted pyrolysis, provides cost savings; it can lower the required process temperature, in some cases by more than 100 degrees Celsius, thereby saving energy, and does not require additional chemicals.

Asia’s Largest Advanced Chemical Recycling Plant

Image by Petronas

In October 2023, Petronas Chemicals Group Berhad (PCG) announced plans to construct Asia’s largest advanced chemical recycling plant with a capacity of 33 kilotonnes per annum (ktpa). The plant, which will be located in Pengerang, Johor, is targeted to be operational by the first half of 2026.

The project involves Plastic Energy Limited, a global leader in chemical recycling, as the technology partner. Plastic Energy will be providing the chemical recycling technology for the plant through its patented TAC™ process, which heats mixed post-consumer plastic waste in the absence of oxygen. This process then produces hydrocarbon vapours that are condensed into pyrolysis oil or TACOIL™ which can be used as a substitute for hydrocarbon feedstock in the production of food-grade recycled plastics.

This project is part of PCG’s New Plastics Economy agenda to support the transition towards a circular economy and contribute to a sustainable plastics ecosystem.

RM15b Investment into Waste-to-Energy Projects

In September 2023, Malaysian energy and construction company Citaglobal signed a memorandum of understanding (MoU) with Shanghai SUS Environment Co Ltd (SUS), with a RM15 billion investment commitment from SUS for a joint collaboration and development of waste-to-energy (WTE) projects in Malaysia.

Citaglobal plans to divert all waste from unsustainable landfills to WTE plants and holistically resolve waste disposal problems in Malaysia. This collaboration, if it materialises, will be in line with boosting Malaysia’s renewable energy capacity target from 40% in 2035 to 70% by 2050, as announced in the National Energy Transition Roadmap in July 2023.

Malaysia’s Largest RE Power Plant Commences Operation

Image by The Malaysian Reserve

Malaysia’s largest renewable energy (RE) power plant at the Bukit Tagar Enviro Park (BTEP) in Hulu Selangor, Selangor with a capacity of 12 megawatts (MW) commenced operations in September 2023. The WTE plant is one of the methods for treating solid waste while generating new renewable energy. BTEP can convert methane gas from solid waste at the landfill into renewable energy, channelling approximately 339 million kilowatt-hours (kWh) of electricity to the national grid.

BTEP is an initiative by the Ministry of Local Government Development via the National Solid Waste Management Department and Berjaya Enviro Parks Sdn Bhd, to ensure a more sustainable solid waste management system in Malaysia. The 12MW PE power plant is also in line with the government’s policy to develop at least one WTE-concept solid waste management facility in each state in Malaysia.

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