This article first appeared in The Edge Malaysia Weekly on June 15, 2026 - June 21, 2026

In the last year, the European Union (EU) started revising its Waste Electrical and Electronic Equipment Directive on the required amount of collection of e-waste as a strategy for resource security, which is also known as “urban mining”.

This is because these electrical and electronic (E&E) items contain valuable materials needed to power the clean energy transition, such as to build batteries for electric vehicles (EV). Rather than mining these metals from nature, urban mining ensures valuable materials are reused instead of being disposed of.

Malaysia also has the desire to close the loop. However, e-waste recycling rates are low at less than 25%, according to the Department of Environment (DoE).

The government has said it plans to roll out an extended producer responsibility (EPR) scheme for the sector, putting manufacturers and retailers responsible for the collection of e-waste, but the timeline is unknown.

Regardless, industry players are taking action by setting up collection schemes for household e-waste and, in particular, lithium batteries, which include those used in EVs. For the latter, they see the opportunity to export black mass — the result of shredding and processing used lithium batteries — to countries like China, which refine and extract critical materials like lithium, nickel and cobalt.

However, the low awareness and collection of e-waste is a challenge. Some industry players have thus called for legal import of e-waste like EV batteries so that they have sufficient volume to make the recycling process viable.

When asked, DoE tells ESG that the government’s stance to forbid imports of e-waste is clear, as it does not want Malaysia to become a dumping ground.

“Therefore, the immediate priority is not importing e-waste but strengthening the collection of domestically generated e-waste and ensuring it is channelled into formal and environmentally sound recycling systems,” says the DoE.

“Improving local collection rates and strengthening the domestic recycling ecosystem should come first before considering any long-term industry expansion.”

It has developed a proposed legal framework to cover the collection of six types of household E&E equipment: TVs, refrigerators, air conditioners, washing machines, laptops and computers, and mobile phones.

But the framework is still undergoing further policy refinement, stakeholder engagement, regulatory impact assessment and alignment with related national policies, EPR mechanism and circular economy initiatives, says the DoE.

It adds that it is undertaking a detailed study on the implementation of an EPR, which would make manufacturers, distributors and retailers responsible for the collection of e-waste from consumers.

The government acknowledges the potential for urban mining. However, this can only be successful if enough e-waste is collected through formal channels.

The highest potential for urban mining may lie in rechargeable lithium batteries, which can be found in EVs, laptops and mobile phones, thanks to the global energy transition. These batteries are under the code SW103, which is different from other types of e-waste under the SW110 category.

The challenge is that the recycling value of some e-waste items is relatively low and, as a result, recyclers may prioritise collecting higher-value items to maintain profitability.

Bulky e-waste is another major challenge, points out Chew Chin Huat, founder of Riiicycle Tech Sdn Bhd, which has set up recycling collection points in Penang and the Klang Valley, including for e-waste.

“Items such as massage chairs, refrigerators, TVs and washing machines require transportation, manpower, storage space and longer collection time. This makes the logistics and operational costs significantly higher,” says Chew.

For those “low-value” items, an EPR is needed to incentivise collection. This will help address the fragmented e-waste collection landscape in Malaysia and ensure there is sufficient and consistent feedstock collection. Only with this condition can urban mining become commercially viable in Malaysia.

“Based on our experience, the collection ecosystem is actually one of the most critical parts of urban mining. Without an efficient collection network, even the best recycling technology cannot operate effectively because there is insufficient material flow into the system,” says Chew.

Lim Kim Heng, managing director of Senheng New Retail Bhd, concurs with this view. Collection rates can improve if the process is made easy, immediate and rewarding. The company runs a MyGreen Rewards campaign by rewarding consumers who drop off their e-waste with the S-Coin, which can be redeemed for products.

“This can be further strengthened if the government introduces clearer e-waste handling policies or regulations, such as mandatory collection and recycling targets, certified disposal requirements and EPR initiatives to help push up the national collection and recycling rate in a more sustainable and coordinated manner,” says Lim.

All e-waste collected by Senheng is managed by Metahub Industries. Digital devices collected that are still viable are refurbished through third-party partners, such as Remobie Malaysia and CompAsia Malaysia, before being resold.

“The biggest challenge is volume and consistency of feedstock. Refining and recovery require scale, clean input streams and reliable collection. Household e-waste is currently fragmented, and valuable materials may leak into informal channels before they ever reach licensed processors,” says Lim.

“What needs to be done is fairly clear: Malaysia needs stronger household e-waste collection infrastructure, wider public participation, better segregation at source, more retailer and producer involvement, and policy tools that create clearer end-of-life responsibility across the value chain.”

He supports the implementation of an EPR, which should be phased, practical and ecosystem-based with sufficient public education and participation incentives.

A good starting point, Lim suggests, could be to prioritise selected household categories where collection pathways already exist, such as smartphones, laptops, TVs and major appliances.

“It may also be worth considering hybrid mechanisms, for example return incentives or deposit-refund style features, especially in the early stages, so that consumer participation rises alongside regulatory obligations,” he says.

When there is sufficient volume of e-waste collected, Malaysian recyclers can then invest in technologies to extract valuable metals like cobalt, nickel and lithium to boost local manufacturing of products like EV batteries.

There must also be demand for these recycled metals from manufacturers. The EU and China are ahead in this by encouraging a certain percentage of recycled materials in manufactured goods.

“Why do people want to do recycling? It’s a business for the future, where to start mining is expensive, while recycling is not … We sell to China today; they are 85% of the global demand for materials because they are the global battery powerhouse,” says Jayden Goh, CEO and founder of EcoNiLi New Energy Sdn Bhd, which has a lithium battery recycling factory in Ipoh.

He suggests setting up a separate EPR stream for lithium batteries due to their value. But there should also be an EPR, much like B-cycle, Australia’s official battery recycling scheme, backed by the government.

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