KUALA LUMPUR (June 9): As Asean countries are at different stages of extended producer responsibility (EPR) implementation, Malaysia will need to build a holistic and inclusive EPR framework tailored to its local context, integrating data and new technologies, the informal sector and regional harmonisation.

This sentiment was shared by the speakers during the panel session of the European Union-Asean Business Council (EU-ABC) launch of its latest report “From waste to wealth: Advancing Asean’s circular economy through EPR alignment” late last month.

EPR is a piece of legislation closely linked to the circular economy and it makes manufacturers responsible for their products throughout their entire lifecycle, including after consumer use.

EPR has been noted as a key policy approach in the Circular Economy Policy Framework for the manufacturing sector launched by the Ministry of Investment, Trade and Industry (Miti) last September.

The implementation of the EPR framework is not a one size fits all solution. Roberto Benetello, the chief executive officer of Malaysian Recycling Alliance Bhd (MAREA), explained that the EPR collection system for Malaysia would need to be one that has a mix of different approaches. 

“Moving forward, the devil is really in the details and understanding how to do these different things is very important,” he stressed, saying that how each of these systems operates and how they are integrated is crucial.

For EPR to work in Malaysia, there is also a need to integrate the current waste management system, he said. Malaysia’s current waste collection management system is predominantly through concessionaires. 

These are large companies that have a concession from the government to collect waste at the household. Therefore, any EPR scheme must work with these concessionaires, not bypass them, said Benetello.

“For example, we don't have a lot of material recovery facilities (MRFs) in Malaysia. So, how do we leverage EPR in order to increase that infrastructure? Because if you don't have MRFs, you cannot actually sort recyclables from generic waste,” said Benetello.

Not all waste is generally accepted by recyclers. Some materials such as polyethylene terephthalate plastic bottles have market value and are hence, commonly collected. However, multilayer packaging has little to no value for most recyclers.

“Nobody would invest in recycling technology if there is no feedstock [and vice versa]. EPR is fundamental to break [the chicken and egg situation] to introduce new technologies that are viable, so that you have an investor that is willing to put money into it,” said Benetello.

At the present moment, Benetello urged that Malaysia address present issues involving the high volume of low value flexible packaging waste that aren’t being collected or recycled and plan for the future.

While Malaysia is at a static currently in terms of its EPR policy, starting from a blank slate can be an opportunity to learn from existing global models and build a holistic legislation, said Lutian Gafar, a general secretary and general counsel at Danone Southeast Asia and India. 

“There must be a very good legislative enactment that will guide moving forward. My challenge to Malaysia is perhaps to quickly learn from whatever is already happening, and to not try to reinvent the wheel,” said Gafar.

Secondly, Asean countries should focus on having an EPR model that is localised. Gafar said that EPR systems in countries such as the US, Europe and Australia are fragmented and they themselves are still learning and experimenting.

“Therefore, Asean should not take all the time to say what is the best thing to do for each of our countries and how to make it perfect,” said Gafar.

Furthermore, efficient and consistent systems must be put in place for EPR fee collection use. To make EPR financially sustainable, Gafar said that if rules are similar especially for exporters, companies will be able to afford to invest once in systems to comply with all the regulations. 

“Another challenge is when these EPR fees are paid and or collected, who manages the money?” said Gafar, especially when they come from the private sector or individuals. 

He said there needs to be clear accountability in fund management and the money collected should be invested in strengthening recycling infrastructure.

“I tell you, our infrastructure level is not as bad as we think it is. In the cities in South Asia, there is enough infrastructure to be able to collect and recycle,” said Gafar.

However, in remote areas, collection of recyclables is still hard.  

“So it's important to understand that if you want to do collection in the rural area, CEPA (communication, education and public awareness) is very important. We need to change the mindset of people because the citizens and the householders don't separate at source,” said Benetello.

In addition, the fragmentation of Malaysia's waste governance landscape leads to inconsistent enforcement of recycling practices, with logistics challenges further complicating matters, particularly in rural areas where the distance to the nearest MRFs and recyclers can make collection expensive and inefficient, he said.

“So the ecosystem is composed of recyclers, large aggregators, small aggregators, junk shops, organised collectors, non-organised collectors, pickers, scavengers and so on. All of them play a role. It's really, really important to understand which roles they play and also it's important to understand the market dynamics of recyclables,” said Benetello. 

Uplifting the livelihoods of the informal is not easy as there is no such regulation or policy supporting that framework, said Lucia Karina, the vice-president of public affairs, communications and sustainability at Coca Cola Europacific Partners Indonesia. “But we have to be the catalyst to create this capable initiative that can be modelled by everyone.” 

Moving forward, a missing element that should be thought about in regional policy discussions surrounding EPR is the integration of advanced technology in creating reliable data, said Jayaprakash Murulitharan, the principal assistant secretary of the Ministry of Housing and Local government. 

“Reliable waste data can reveal cost efficiencies and environmental benefits, such as reducing overall waste. We are still talking about traditional ways of implementing EPR and regulations but we need to shift towards using next-generation tools like artificial intelligence and digital solutions to tackle the complex challenges we face across Asean’s diverse demographics. That’s the real challenge we need to start addressing now,” said Jayaprakash.

EPR is not just about environmental regulation, it is key to industrial development for Malaysia as well, said Dr Tengku Zahaslam Tuan Hashim, a director of the new industrial master plan (NIMP) delivery management unit at Miti.

“We know that EPR is a clever way of ensuring that the recovery rate and the recycling rate can be increased. And because of that, we can ensure that the industry can have the second wave of the raw materials needed,” said Zahaslam.

Without change, Malaysia could extract up to one billion tons of natural resources by 2023. He said that EPR will be able to help secure more raw materials that are sustainable and promote resource efficiency. 

“And by having this resource efficiency, we can ensure that we can reduce the carbon footprint for the industry and minimise the raw materials consumption and enhance the recyclability,” he added.