Malaysia’s Plastics Industry Takes Charge: Driving Local Recycling and Voluntary EPR from the Ground Up

Industry representatives from ACCCIM, FMM, MAREA, MPMA and MPRA at a joint meeting to finalise their Budget 2027 submission to the Ministry of Finance, proposing measures to strengthen Malaysia's recycling ecosystem ahead of mandatory EPR by 2030

PETALING JAYA, Selangor, July 21 (Bernama) -- Malaysia’s plastics industry is not waiting for 2030. Driven by accelerating environmental concerns, while the transition to a circular economy is already well underway, our efforts must be scaled up. As the country prepares for mandatory Extended Producer Responsibility (EPR) under the Circular Economy Blueprint for Solid Waste in Malaysia (2025-2035), leading industry players are already taking concrete steps on the ground. From collecting recyclables, educating communities, to building the foundations of a local circular economy, these efforts help to reduce Malaysia’s reliance on imported petrochemical feedstock and crude oil-derived raw materials from the Middle East, whilst developing domestic circular production and consumption practices.

Five industry associations: The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), Federation of Malaysian Manufacturing (FMM), Malaysian Recycling Alliance (MAREA), Malaysian Plastics Manufacturers Association (MPMA) and Malaysian Plastics Recyclers Association (MPRA), have come together to drive this agenda collectively, combining on-the-ground action with coordinated industry advocacy.
 
Industry Action on the Ground
MAREA, Malaysia’s first voluntary industry-led EPR initiative, was established in 2021 by ten major FMCG companies committed to improving domestic collection and recycling rates for packaging waste. Since then, MAREA has tested practical approaches to EPR implementation by supporting collection, sorting and recycling partners across Peninsular Malaysia, Sabah and Sarawak, involving multiple actors across the recycling value chain. Through these projects, MAREA has generated practical insights into local collection systems while supporting community-based communication, education and public awareness initiatives to encourage waste separation and recycling. These on-the-ground experiences contribute to the Government’s data-informed development of Malaysia’s EPR Policy Framework and support the transition from voluntary to mandatory EPR.
 
Since October 2020, Nestlé Malaysia has been running Project SAVE (Segregate, Avoid, Value, Educate), its flagship voluntary EPR programme and Malaysia’s largest corporate-led household recycling collection initiative, implemented in partnership with seven local municipal councils across nine cities in Selangor, Kuala Lumpur, Penang and Kedah. The programme is reaching over 270,000 households on a weekly and bi-weekly basis and has collected approximately 49,000 tonnes of dry mixed recyclables and recoverables to date (of which 32,000 tonnes are plastics). Through these efforts, Project SAVE is helping to strengthen recycling habits among communities through comprehensive CEPA (Communication, Education & Public Awareness) and support Malaysia’s transition towards a more circular economy.
 
On the education front, MPMA runs The Green Truck, a mobile recycling education programme that visits schools across Malaysia to bring the 3Rs (Reduce, Reuse and Recycle) to life for students since 2022. To date, The Green Truck has reached more than 40,000 primary and secondary students nationwide, helping to build recycling awareness and habits from a young age.
 
MPRA has launched the Education Next Generation Programme, aiming to reach 24 primary schools across Peninsular Malaysia by 2027. Since 2024, MPRA and its members have collectively supported over 1,000 education, community engagement and recycling campaign programmes nationwide. Beyond schools, MPRA works with residential communities, commercial premises and public events to promote recycling through education, public awareness and collection campaigns across Penang and the Klang Valley. MPRA also serves as an industry connector, linking consumers, collectors and plastic recyclers to strengthen collection networks, improve plastic recovery and accelerate Malaysia's transition towards a circular economy.
 
A Shared Opportunity
Waste management and recycling is a shared responsibility between governments, businesses and individuals. These efforts gained fresh momentum following a luncheon dialogue on 11 May 2026, organised by ACCCIM and attended by YB Liew Chin Tong, Deputy Minister of Finance, and YB Sim Tze Tzin, Deputy Minister of Investment, Trade and Industry. The dialogue brought together recyclers, manufacturers and major plastic product users to explore how local recyclers could be better matched with large-scale plastic consumers to close the circular loop domestically. The conversation was particularly timely given the ongoing geopolitical disruptions in the Middle East that have affected global petrochemical feedstock supply. The government expressed strong support for this direction.
 
Building on this momentum, the five associations convened a series of industry roundtables to take stock of where the recycling value chain stands today, identify areas for improvement and map out a way forward together. Discussions covered the practical realities facing recyclers and manufacturers on the ground, from tax considerations under the Sales and Service Tax (SST) framework to gaps in collection infrastructure and opportunities to enhance existing government incentives.
 
Supporting the Voluntary EPR Phase
As part of this coordinated effort, the five associations have jointly submitted a policy position paper to the Ministry of Finance ahead of Budget 2027, titled “Budget 2027: Accelerating Plastics Circularity and EPR Adoption in Malaysia.” The submission outlines how targeted fiscal measures could help complement industry’s voluntary action and strengthen Malaysia’s recycling ecosystem ahead of mandatory EPR in 2030. Key proposals include:
 
• Expanding the Green Investment Tax Allowance (GITA) with a dedicated Circular Economy and EPR category to support investment in collection, sorting and material recovery infrastructure;
• Targeted SST relief for plastic traders, stockists, collectors, sorters and EPR compliance fees, to ease structural cost pressures across the recycling value chain;
• Extending diesel subsidy (SKDS) eligibility to recycling collection and logistics fleets, including RORO (Roll-On Roll-Off) trucks widely used for recyclables collection, on par with existing landfill logistics support;
• Tax deductions to support circular economy certifications and consumer education campaigns on waste separation at source; and
• An early adopter incentive to reward companies that begin EPR implementation during the voluntary phase from 2026 to 2029, encouraging early action across the supply chain.
 
The voluntary EPR stage commencing in 2026 is a valuable window for industry to prepare. Getting collection infrastructure in place, raising consumer awareness and aligning the supply chain now will ensure Malaysia is well-positioned when mandatory EPR takes effect in 2030. The five associations remain committed to working closely with the government to make this transition a success, and look forward to continued engagement with the Ministry of Finance and relevant agencies as the proposals are considered. 

About the Signatory Associations
• ACCCIM – Associated Chinese Chambers of Commerce and Industry of Malaysia is the largest Chinese business organisation in Malaysia, championing the interests of the business community.
• FMM – Federation of Malaysian Manufacturing is the premier organisation representing the manufacturing and manufacturing-related services sectors in Malaysia.
• MAREA – Malaysian Recycling Alliance is Malaysia’s first voluntary industry-led EPR initiative, established in 2021 by ten major FMCG companies committed to driving plastic packaging recycling and circular economy in Malaysia.
• MPMA – Malaysian Plastics Manufacturers Association, established in 1967, is the official voice of Malaysia’s plastics industry, representing 800 members accounting for 60% of the nation’s plastics manufacturers and 80% of plastics production.
• MPRA – Malaysian Plastics Recyclers Association represents Malaysia’s plastics recycling industry, advocating for a stronger domestic recycling sector and circular economy.
 
SOURCE: Malaysian Plastics Manufacturers Association (MPMA)

FOR MORE INFORMATION, PLEASE CONTACT:
Name: Crystal Cheah
Malaysian Plastics Manufacturers Association (MPMA)
Tel: 03-7876 3027
Email: crystal@mpma.org.my 

--BERNAMA