PETALING JAYA: An estimated 70% of plastic recycled in the country are imported scrap, says a World Bank report on plastic recycling in Malaysia.
“Plastic recyclers rely on such imports because imported material is often cheaper, ” said the World Bank in the recently released report titled “Malaysia: Plastics Circularity Opportunities and Barriers”.
For example, local HDPE (high density polyethylene) material is 17% costlier compared to imported material while local PET (polyethylene terephthalate) material costs 20% more.
The report also said local material is of poorer quality due to a lack of “design-for-recycling” and it has higher amounts of contamination such as dirt and waste.
It added that countries that export plastic scrap have typically a good source separation or bottle deposit system in place, which often enables very clean material.
Imports are also said to provide a steady guaranteed tonnage, whereas in the local market, a steady flow is not guaranteed, said the report.
The report also found that almost 75% of plastic in the country do not end up being recycled, which meant that Malaysia lost about US$1bil (RM4.12bil) a year.
Malaysia recycled just 24% of key plastic resins in 2019, while about 1.07 million tonnes of plastic were discarded entirely.
“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 is not on track to meet the National Solid Waste Management Department’s recycling target of 40% by 2025.
It pointed out that several structural challenges resulted in a low rate of plastic recycling, including a lack of local demand for recycled plastic, gaps in recycling capacities and reliance on higher quality import.
The other challenges include a lack of market data, low investments in the plastic recycling industry, falling and inconsistent supply from the informal sector, and low quality recyclables.
The report said many of these challenges are amplified by the 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 plastic resins assessed in the report were PET, low density polyethylene (LDPE), HDPE and polypropylene (PP).
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 also said the plastic recycling industry could potentially raise its contributions to the Malaysian economy by three to four times, from RM4.5bil in 2019 to RM15bil to RM20bil annually.