With a million tonnes of plastic thrown away each year, Malaysia loses RM4bil in recycling revenue

PETALING JAYA: The country's economy loses an estimated US$1bil (RM4.12bil) a year because about 75% of plastic waste does not end up being recycled, according to a report by the World Bank.

The report said Malaysia recycled just 24% of key plastic resins in 2019, while about 1.07mil tonnes of plastics are discarded instead of being recycled into valuable materials.

“Because of various systemic and market challenges, only 19% of the total material value or US$234mil (RM964.7mil) per year is currently unlocked, ” said the report.

The report said Malaysia was also not on track to meet the National Solid Waste Management Department's recycling target of 40% by 2025.

It said several structural challenges resulted in a low rate of plastics recycling including the lack of local demand requirements for recycled plastics, gaps in recycling capacities, and reliance on higher-quality imports.

The other challenges included lack of market data, investments in the plastic recycling industry remaining low, falling and inconsistent supply from the informal sector, and low-quality recyclables.

The report said many of these challenges were amplified by the ongoing Covid-19 pandemic.

“Changes in consumption patterns and low waste collection rates have led to supply reductions for recyclers, while low oil prices have made it cheaper to use virgin rather than recycled plastic, ” said the report.

The most widely produced and recycled plastics resins assessed in the report were polyethylene terephthalate (PET), low density polyethylene (LDPE), high density polyethylene (HDPE) and polypropylene (PP).

Among others, PET is widely used in plastic bottles, PP is used for rigid and flexible packaging, HDPE is used for shampoo bottles, while LDPE is used for dairy products.

The report said fully addressing the market opportunity requires public and private sector investments to improve waste collection and sorting, an enabling environment to improve recycling economics, and other systemic interventions.

The report said the plastics industry contributed RM30.98bil to the national economy, representing 4.7% of Malaysia’s GDP, in 2018.

"Mismanaged plastic waste across Malaysia, the Philippines, and Thailand is threatening key economic sectors such as tourism and fisheries, and impacting livelihoods and infrastructure.

"But there is strong government momentum in these countries to identify critical policies and craft roadmaps to strengthen demand for all recycled plastic resins; level the playing field for global and domestic companies; and help drive a circular economy for plastics, ” Ndiamé Diop, World Bank country director for Brunei, Malaysia, the Philippines and Thailand, said in a press release.