CIRCULAR ECONOMY: Protect Consumers from Implications of Mandatory EPR

Malaysia has a longstanding issue of ballooning amounts of plastic waste. Extended producer responsibility (EPR) – making polluters responsible – is a key policy approach in the Circular Economy Policy Framework for the manufacturing sector launched by the Ministry of Investment, Trade and Industry (Miti) in September 2024. A circular economy blueprint for the waste sector, advocating zero waste, was also introduced in August the same year.

With the country’s recycling rate at just over 35% as at 2023, there are hopes that an EPR system will drastically minimise the amount of plastic and other recyclable waste entering its landfills and environment.

The following are Consumers Association of Penang’s comments on the matter in a recent interview by The Edge Malaysia.

EPR Costs Must Not be Passed On to Consumers, CAP Says

From the consumers’ perspective, the implementation of EPR may affect the prices of goods and services. Since EPR shifts the financial burden of waste management from the public sector to producers, companies may pass some of these costs on to consumers.

This could lead to higher prices for goods as costs related to redesigning products, sustainable packaging, recycling and compliance with EPR policies could be reflected in product prices, says Mohideen Abdul Kader, president of the Consumers Association of Penang.

While the EPR is currently voluntary and recycling costs are absorbed by manufacturers or producers, the long-term implications of a mandatory EPR system might allow costs to trickle down to consumers as well.

“Price increases for everyday goods, especially FMCGs (fast moving consumer goods) like food and household items, disproportionately affect low-income groups who spend a larger share of their income on basic needs,” he says.

“Companies might limit the production of low-margin goods or reduce offerings in cost-sensitive markets, limiting options for low-income consumers. We are worried that taxes or fees associated with EPR, such as those funding recycling programmes, might indirectly affect all consumers equally, regardless of income, amplifying regressive financial impacts.”

While introducing mandatory EPR poses benefits, Mohideen notes that EPR should be aligned with zero waste principles, promoting product longevity, reusability, repairability and recyclability from the design stage itself.

Additionally, he says, an ideal circular economy can only be achieved by shifting focus away from harmful projects like WTE (waste-to-energy) incineration and instead emphasising core strategies like waste reduction, composting, recycling, reusing, refilling and repairing.

“Strengthening green finance mechanisms and supporting research and development in safe, non-toxic recycling technologies also can drive innovation and make circular economy practices more accessible and scalable.”

This article first appeared in The Edge Malaysia Weekly on December 30, 2024 – January 12, 2025

Read the original article here:
https://theedgemalaysia.com/node/739062…