Charting Malaysia’s circular economy journey

For decades, the word “economy” in Malaysia was synonymous with growth, industrialisation, and linear consumption – take, make, dispose.

This model has brought undeniable progress, but also left an indelible mark: mountains of waste choking our landfills and a growing environmental debt. Recognising this, Malaysia began a deliberate pivot. Our journey towards a circular economy is not a sudden leap, but a purposeful, multi-stage evolution gaining critical momentum.

It began with a change in vision. The 11th Malaysia Plan marked the crucial first step, planting the flag for a green economy. The focus was understandably narrow, starting with the energy sector. Transitioning to renewable electricity was the logical entry point – an attempt to decarbonise the bedrock of our development. This was us learning to walk.

The 12th Malaysia Plan saw the vocabulary evolve from “green” to “circular.” This was more than a semantic shift; it was a conceptual expansion. We began to understand that the solution wasn’t just cleaner energy, but a wholesale redesign of our systems to eliminate waste.

The initial driver was urgent and visible: our landfills were overflowing. The first foray into circularity was, therefore, one of necessity – a focus on waste management. While sometimes misconstrued as mere recycling, this stage was vital. It forced a national conversation about where our discarded materials end up. As these initiatives matured, it became clear that true circularity required intervention far earlier in the value chain.

A circular economy cannot be built on waste management alone. The recent National Industrial Master Plan (NIMP) 2030 marks the second, more profound, stage of our journey: moving “upstream” into manufacturing.

Here, the circular economy is reframed not as a cost, but as a core competitive strategy. It’s about designing products for disassembly, fostering industrial symbiosis where one factory’s waste becomes another’s raw material, and embracing servitisation models. This is where we learn to integrate circular principles into the very heart of our industrial production. This remains a work in progress. Getting companies to embrace extended producer responsibility is still a challenge.

Simultaneously, sector-specific initiatives like the National Biomass Action Plan demonstrate a tailored approach. The plan has not moved as envisaged. By focusing on the palm oil industry – a cornerstone of our economy – we are learning to close the loop in a context that is uniquely Malaysian. Converting agricultural waste into biofuel, fertiliser, and advanced materials is a powerful proof-of-concept, showing that circularity can enhance both sustainability and profitability in our key sectors.

Now, as we look to the 13th Malaysia Plan and the development of a comprehensive National Action Plan for Circular Economy, we stand at the threshold of the most ambitious stage: total integration.

This next phase must make circularity the default setting across all sectors, including the vast services industry – from retail and hospitality to finance and ICT. A bank can be circular by prioritising loans for businesses with demonstrably sustainable practices. A tech company can be circular by designing software that optimises resource use in logistics or agriculture. A hotel can be circular by eliminating single-use plastics and creating closed-loop systems for water and organic waste. This is the ecosystem we must build.

Envisaging the way forward, our focus must be on getting the policy mix right. The national action plan must be bold, combining clear regulations with smart incentives. Extended Producer Responsibility policies must make brands accountable for the entire lifecycle of their products, while tax breaks and green public procurement can stimulate the market for circular solutions.

Fostering collaboration is non-negotiable. The government cannot do this alone. Success hinges on a tripartite alliance between the public sector, private industry, and civil society. Platforms for knowledge sharing and collaborative R&D are essential.

Embracing the blue economy is in the pipeline. The Academy of Sciences Malaysia has submitted a blueprint. The exploration of the blue economy is a natural and critical extension of this journey. Applying circular principles to our marine resources – from sustainable fisheries to circular tourism – will be vital for a nation endowed with such rich coastal and oceanic assets.

Malaysia’s circular economy journey is a marathon, not a sprint. We have moved from addressing the symptom (waste) to redesigning the system (manufacturing), and we are now preparing for a society-wide transformation. The path is charted. The momentum is building.

By embracing this transition not as an obligation but as an unparalleled opportunity for innovation, resilience, and inclusive growth, Malaysia can become a lighthouse nation, guiding the region towards a prosperous and truly circular future.

The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.