Environment & Water Technologies Malaysia Market Study
AUGUST 2020
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EU Business Avenues in South East Asia
Central Management Unit
Malaysia Market Study
August 2020
Submitted to the European Commission on 10 August 2020
Table of contents
LIST OF FIGURES ...... 6
LIST OF TABLES ...... 8
TABLE OF ABBREVIATIONS ...... 9
1. EXECUTIVE SUMMARY ...... 12
2. WHAT ARE THE CHARACTERISTICS OF MALAYSIA? ...... 18
2.1 POLITICAL OVERVIEW ...... 19 2.2 ECONOMIC OVERVIEW ...... 20 2.3 TRADE OVERVIEW ...... 22 2.4 MARKET ACCESS ...... 26 2.5 BUSINESS AND COMPETITIVE ENVIRONMENT ...... 27
3. MARKET OVERVIEW & EU ENTRY OPPORTUNITIES IN MALAYSIA ...... 29
3.1 THE ENVIRONMENT & WATER TECHNOLOGIES SECTOR ...... 29 3.1.1 Market Overview ...... 29 3.1.2 Key Associations ...... 39 3.1.3 Entry Strategies ...... 40 3.1.4 Challenges and Entry Barriers ...... 43 3.2 FRESH WATER SUPPLY ...... 45 3.2.1 Market Overview ...... 45 3.2.2 EU Entry Opportunities ...... 57 3.3 WASTE WATER ...... 64 3.3.1 Market Overview ...... 64 3.3.2 EU Entry Opportunities ...... 71 3.4 WATER SOLUTIONS ...... 76 3.4.1 Market Overview ...... 76 3.4.2 EU Entry Opportunities ...... 82 3.5 AIR POLLUTION CONTROL ...... 88 3.5.1 Market Overview ...... 88 3.5.2 EU Entry Opportunities ...... 98 3.6 WASTE MANAGEMENT ...... 105 3.6.1 Market Overview ...... 105 3.6.2 EU Entry Opportunities ...... 113 3.7 RECYCLING ...... 119 3.7.1 Market Overview ...... 119
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3.7.2 EU Entry Opportunities ...... 128 3.8 SOIL PREVENTION ...... 134 3.8.1 Market Overview ...... 134 3.8.2 EU Entry Opportunities ...... 140 3.9 NOISE PROTECTION ...... 143 3.9.1 Market Overview ...... 143 3.9.2 EU Entry Opportunities ...... 149
4. REGULATIONS ...... 152
5. ANNEX ...... 158
5.1 LIST OF USEFUL CONTACTS ...... 158 5.2 STARTING A BUSINESS IN MALAYSIA ...... 160 5.3 USEFUL STATISTICS ...... 170 5.4 BIBLIOGRAPHY ...... 177
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List of Figures
Figure 1: Map of Malaysia ...... 18 Figure 2: Malaysia's Economy in 2019 ...... 21 Figure 3: Malaysia’s Key Exports and Imports, 2019 ...... 22 Figure 4: EU Trade Flows and Balance with Malaysia, 2009 to 2019 ...... 24 Figure 5: EU-Malaysia FDI, Trade in Goods, Services ...... 25 Figure 6: Key Statistics - Water Supply; Sewerage, Waste Management and Remediation Activities ...... 30 Figure 7: Environmental Protection Expenditure, 2018 ...... 31 Figure 8: SIRIM R&D Areas ...... 38 Figure 9: Water Reserve Margin for Peninsula Malaysia and Labuan 2008 – 2019 ...... 48 Figure 10: Framework of Water Supply...... 53 Figure 11: The proposed abstraction area for the Sungai Perak Raw Water Transfer Scheme. 57 Figure 12: Pintu Geng Water Treatment Plant Uses Groundwater Resources ...... 59 Figure 13: Factories Pump Toxic Effluents into Malaysia’s Rivers ...... 64 Figure 14: The Langat Central Sewage Treatment Plant (CSTP) ...... 67 Figure 15: Centralised Sludge Treatment Facility in Malaysia ...... 68 Figure 16: Pakar Scieno’s River Monitoring System ...... 77 Figure 17: Smart Instrumentation Installed by ISME in Water and Wastewater Projects ...... 81 Figure 18: HYDRUS 2.0 ...... 85 Figure 19: AQtap solutions ...... 86 Figure 20: flowIQ® 2200 ...... 87 Figure 21: Air Quality in South East Asia ...... 88 Figure 22: Satellite Spectrometry Data showing Nitrogen Dioxide Levels in Malaysia’s Skies .. 90 Figure 23: Malaysia’s Green Targets for Transportation Sector ...... 91 Figure 24: Transboundary Haze in Malaysia in September 2019 ...... 92 Figure 25: Transboundary Haze Impact on Malaysia ...... 93 Figure 26: Composition of Municipal Solid Waste ...... 105 Figure 27: Transformation of Solid Waste Management in Malaysia ...... 106 Figure 28: Open Dumping in Malaysia ...... 108 Figure 29: A Small-scale Incinerator in Cameron Highlands ...... 109 Figure 30: Waste Treatment and Disposal in Malaysia ...... 111 Figure 31: the Jelutong Landfill ...... 116 Figure 32: Recycling Rate in Malaysia ...... 119 Figure 33: SWCorp Enforcement Officers checking on Waste Separation in Bangsar Baru .... 120 Figure 34: Plastic waste piled outside an illegal recycling factory in Jenjarom,Malaysia ...... 122 Figure 35: Major Market Segments for Plastics Products ...... 123 Figure 36: E-waste Management in Malaysia ...... 125 Figure 37: New Mechanism for Household E-waste Management ...... 126 Figure 38: Klean Malaysia’s Smart Reverse Vending Machine ...... 128 Figure 39: The Plastics Industry’s Value Chain from Upstream to Downstream ...... 129 Figure 40: The Interceptor 002 on the Klang River ...... 132
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Figure 41: A road located near the Putra World Trade Centre, Kuala Lumpur...... 135 Figure 42: Forest Clearing in Sg Mensun, Cameron Highlands ...... 136 Figure 43: Traffic in Malaysia ...... 143 Figure 44: The Ampang-Kuala Lumpur Elevated Highway ...... 146 Figure 45: Noise barriers Walls along Malaysian Highways...... 147 Figure 46: Noise Barriers for Mass Rail Transit in Malaysian Cities ...... 148
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List of Tables
Table 1: Ease of Doing Business in Malaysia ...... 27 Table 2: Water Resources in Malaysia ...... 45 Table 3: Raw Water Resources Ready for Supply in Malaysia, 2018 ...... 46 Table 4: Number of Scheduled and Unscheduled Water Cuts, 2017 and 2018 ...... 47 Table 5: Water Operators by State ...... 54 Table 6: Key institutions for water supply in Malaysia ...... 54 Table 7: Water Treatment Plants in Malaysia, 2016-2017 ...... 58 Table 8: Sewerage facilities 2017-2018 ...... 65 Table 9: Wastewater Treatment Systems in Malaysia, 2017 ...... 66 Table 10: Non-Revenue Water in Malaysia, 2016-2017 ...... 78 Table 11: Mapping Challenges to Solutions ...... 83 Table 12: Maximum Permissible Sound Levels (LAeq) ...... 144 Table 13: Fee Payable for Registration of a Foreign Company in Malaysia...... 164 Table 14: Estimated Timeline for Business Registration Procedures ...... 167 Table 15: Imports of Machinery and Apparatus for Filtering or Purifying Water ...... 170 Table 16: Exports of Machinery and Apparatus for Filtering or Purifying Water ...... 170 Table 17: Imports of Parts of Machinery and Apparatus for Filtering or Purifying Liquids or Gases ...... 171 Table 18: Exports of Parts of Machinery and Apparatus for Filtering or Purifying Liquids or Gases ...... 171 Table 19: Imports of Instruments and Apparatus for Measuring or Checking the Flow or Level of Liquids (excluding meters and regulators) ...... 172 Table 20: Exports of Instruments and Apparatus for Measuring or Checking the Flow or Level of Liquids (excluding meters and regulators) ...... 172 Table 21: Imports of Gas or Smoke Analysis Apparatus ...... 173 Table 22: Exports of Gas or Smoke Analysis Apparatus ...... 173 Table 23: Imports of Instruments and Apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases ...... 174 Table 24: Exports of Instruments and Apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases ...... 174 Table 25: Imports of Instruments and apparatus for measuring or checking pressure of liquids or gases (excluding regulators) ...... 175 Table 26: Exports of Instruments and apparatus for measuring or checking pressure of liquids or gases (excluding regulators) ...... 175 Table 27: Imports of Instruments or apparatus for measuring or checking variables of liquids or gases ...... 176 Table 28: Exports of Instruments or apparatus for measuring or checking variables of liquids or gases ...... 176
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Table of Abbreviations
AEMAS ASEAN Energy Manager Accreditation Scheme AFAS ASEAN Framework Agreement On Services AFTA ASEAN Free Trade Area AMC Airborne Molecular Contamination APAC Asia Pacific APC Air Pollution Control ASEAN Association of South East Asian Nations AWCS Automated Waste Collection Systems BLESS Business Licensing Electronic Support System BOD Biochemical Oxygen Demand C&E Consulting and Engineering CAQM Continuous Air Quality Monitoring CCM Companies Commission of Malaysia CO Carbon Monoxide CO2 Carbon Dioxide COVID 19 Coronavirus Disease CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership CSTP Central Sewage Treatment Plant ddBA Decibels DID Department of Irrigation and Drainage DoE Department Of Environment DoS Malaysian Department of Statistics DOSH Department of Occupational Safety and Health DSS Development of a Decision Support System EIA Environmental Impact Assessment EPC Engineering, Procurement and Construction EQA Environmental Quality Act EWS Early Warning Systems EWT Environmental And Water Technologies FDI Foreign Direct Investment FiT Feed In Tariff FTA Free Trade Agreement GHG Greenhouse Gas GIS Geographic Information System GNI Gross National Income GPS Global Positioning System GTFS Green Technology Financing Scheme HC Hydrocarbons HDPE High-Density Polyethylene IDC International Data Corporation
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IDEA Intermittently Decanted Extended Aeration IoT Internet of Things ISMP Integrated Shoreline Management Plan IWK Indah Water Konsortium JKR Jabatan Kerja Raya (Ministry’s Public Works Department) KAWMC Kualiti Alam Waste Management Centre KeTTHA Ministry Of Energy, Green Technology And Water LiDAR Light Detection and Ranging LRAL2 Loji Rawatan Air Langat 2 (Langat 2 Water Treatment Plant) LRT Light Rail Transit MBIC Malaysia Biomass Industries Confederation MENR Ministry of Energy and Natural Resources MESTECC Ministry of Energy, Science, Technology, Environment and Climate Change MEWA Ministry of Environment and Water MGTCCC Malaysian Green Technology and Climate Change Centre MIDA Malaysian Investment Development Authority MLD Million Litres per Day MoU Memorandum of Understanding MPOB Malaysian Palm Oil Board MRT Mass Rail Transit MSW Municipal Solid Waste MWA Malaysian Water Association NEA National Environmental Agency
NH3-N Ammoniacal Nitrogen
NO2 Nitrogen Dioxide NRE Ministry of National Resources and Environment NRW Non-Revenue Water NWQS National Water Quality Standards ODS Ozone Depleting Substances PAAB Pengurusan Aset Air Bhd (Water Asset Management Company) PE Polyethylene PET/PETE Polyethylene Terephthalate PM Particulate Matter POME Palm Oil Mill Effluent PP Polypropylene PWS Premier Water Services RE Renewable Energy SCADA Supervisory Control and Data Acquisition SIRIM Scientific And Industrial Research Institute of Malaysia
SO2 Sulphur dioxide SPAN National Water Services Commission SS Suspended Solids
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STP Sewage Treatment Plant SWCorp Malaysia Solid Waste and Public Cleansing Management Corporation SWM Solid Waste Management TNB Tenaga Nasional Berhad TRX Tun Razak Exchange VWT Veolia Water Technologies WMAM Waste Management Association of Malaysia WQI Water Quality Index WTE Waste-To-Energy WTO World Trade Organisation WTP Water Treatment Plant
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1. Executive Summary
Malaysia is pursuing comprehensive initiatives that aim to reduce barriers to the free flow of goods and services and provide national treatment to foreign investors. These initiatives, together with parallel developments in environmental activism and a more stringent regulatory framework, are expected to translate into increased opportunities for environmental sustainability and development.
The Malaysian market for environmental and water technologies (EWT) is large and growing. Although the country is considered to have a moderate to good environmental standard, the rising demand for sustainable development, clean water, soil, air and energy, and proper waste management are driving the market growth. Growing environmental awareness and increasingly stringent environmental standards and regulations are translating into abundant opportunities for both domestic and international EWT market players. The market for water supply, sewerage, waste management and remediation activities was valued at EUR 3 billion in 2017, with an estimated value added or EUR 1.5 billion. The private sector remains a significant contributor to the EWT market with international manufacturers, suppliers and solution providers occupying a large share of the Malaysian EWT market.
Fresh Water Supply
To meet the demand of clean water, supply of raw water directly from rivers and storage dams has shown an increase of 5.7 per cent and 28.0 per cent daily in 2018 as compared to 2014. While the country is blessed with abundant fresh water resources, rapid urbanisation, growth of the population, unsustainable water management, pollution and over-consumption are increasing the country’s levels of water stress. Consequently, the country urgently needs to upgrade its fresh water supply and management systems.
Waste Water
Malaysia’s waste water and sewage treatment segment lags behind its drinking water counterpart and the country still relies mostly on primary and secondary waste water treatment systems.
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The market is primarily focused on the food and beverage, power, automotive and palm oil industries. While applications of waste water treatment technologies are growing, the market is yet to reach its full potential. Limited connectivity to, and coverage of, sewerage networks and outdated technologies in waste water treatment have stymied growth in the sector in the past. Opportunities, however, are growing as large waste water infrastructure projects are expected to be realised soon.
Water Solutions
While Malaysia is a water-rich nation, adverse climate events are drawing attention to the need for smart water efficiency and conservation solutions. In particular, Malaysia has placed significant emphasis on managing losses in the distribution systems. The country does not have an official agenda for smart water solutions, but it has drawn its focus towards improving the quality and efficiency of the water services industry, integrated water management services, improved metering capabilities and reduction of non-revenue water. This shift is fuelling interest in water efficient consumer products, advance leak detection equipment, smart meters, and alternative water supply sources.
Air Pollution Control
Although Malaysia enjoys good to moderate levels of air quality overall, air pollution continues to be a problem in some of Malaysia’s cities and industrial zones. Land transportation, industrial production and open burning activities are the major sources of air pollution. The air pollution control (APC) market is still nascent, but environmental concerns, including strict regulatory enforcement and public concern, point to significant entry and growth opportunities. A case in point is offered by the Malaysian National Transport Policy (NTP) 2019-2030, which sets action items to reduce emission of greenhouse gas, black smoke and other pollutants from the transport sector.
Waste Management
Solid Waste Management (SWM) is one of Malaysia’s most significant infrastructure and environmental challenges. In 2018, Malaysians generated 38,142 tonnes of waste per day,
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an increase from 19,000 tonnes of waste a day in 2005. Solid waste generation is projected to grow to 49,670 tonnes a day by 2030. However, the country largely relies on landfilling as main way of waste disposal. Municipal waste dominates SWM in Malaysia, accounting for 64% of the total collected waste. The generation of municipal solid waste has increased over the last decade by 95%, primarily due to rapid urban developments. The government is seeking innovative solutions for its SWM sector and it is prepared to offer a favourable environment for foreign industry players.
Recycling
The increasing volume of solid waste and limited space for storage have led the Government of Malaysia towards setting its ambition of achieving a 30% recycling rate by 2020. Initiatives in e-waste, household, municipal and industrial waste recycling have been initiated over the years. Stringent enforcement of regulations has led to some successes, but the recycling market is still relatively nascent in Malaysia. Technology for waste separation, sorting, processing and recycling is limited domestically and the majority of recycling solutions are imported from abroad.
Soil Prevention
Malaysia’s economic development has brought challenges of soil degradation, soil erosion, and sedimentation, which have led to growing incidences of landslides and flash floods across the country. Tellingly, Malaysia is among the top 10 countries in the world with the highest number of landslides in the past decade. Moreover, the country’s waterways suffer from excessive sedimentations, causing flash floods, and new challenges are arising because of increased coastal erosion and soil pollution. The government is not actively pursuing integrated soil prevention strategies yet. Despite the lacking integrated framework for soil prevention technologies, domestic and international players are slowly increasing their business opportunities in Malaysia.
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Noise Pollution
Noise pollution in Malaysia has become synonymous with the urban settlements, industrialisation, rapid housing expansions, population growth and concentration as well as technological advancements. Noise pollution in Malaysia comes from a variety of sources, but road transportation and industrial construction represent the major contributors to environmental violations. The government has initiated some policies to deal with noise pollution, most notably in Kuala Lumpur, but more could be done to develop smarter, more advanced noise abatement systems in the country.
Opportunities
Export of Advanced Environment & Water Technologies
Considering Malaysia’s recent emphasis on environmental sustainability, potential opportunities exist for European companies with expertise and technological solutions in environmental protection, clean-up and remediation. The Government of Malaysia has shown interest to acquire more advanced technologies in all EWT sub-sectors. Experienced European companies with turnkey solutions for infrastructure projects in water management and treatment, environmental solutions for air, noise, soil and water pollution abatement, recycling and smart monitoring equipment, and waste disposal and re-utilisation will find significant opportunities in Malaysia. These opportunities lie either in the sale and implementation of turnkey systems in existing infrastructure, or in project development for the expanding Malaysian environmental and water network.
Replacement, Upgrading and Retrofitting Market Opportunities
The replacement market in Malaysia is also growing, as there is a constant requirement for replacement parts and services for the ageing Malaysian environmental and water infrastructure. The continuous maintenance, upgrading and expansion of existing water supply systems to improve treatment efficiency, the optimisation of waste water management and treatment
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network, and the efforts to abate air, water and soil pollution via more optimal solutions are driving the growth of opportunities.
EWT Service provision
Environmental auditing, management systems and impact assessments, risk analysis, and environmental technology optimisation are also growing fields. Regulations pertaining to environmental and water sectors are likely to translate into more stringent and efficient monitoring requirements. With the existing domestic skills gap, potential opportunities exist for European companies to support the development of more efficient market regulation via consulting and service provision capabilities. Such activities are likely to translate into opportunities for implementation of impact assessment and environmental technology optimisation solutions.
Waste-to-Energy projects
Opportunities for European companies are lucrative in the waste-to-energy sector. The energy sector has a strategic importance for Malaysia’s economy and it makes up almost 20% of the country’s total GDP. The Malaysian government is currently promoting the shift away from the country’s heavy reliance on natural gas and oil for electric power generation, and towards the greater use of renewable resources. In particular, the government has put a strong emphasis on waste as a resource for power generation and is increasingly seeking to incentivise local and international companies to assist the sector to develop waste-to-energy programmes. With abundant biomass, biogas and waste supplies in the country, and the increasing government support for the use of these resources for energy generation, there are significant opportunities to enter the Malaysian market via new waste-to-energy projects.
Skills, Technology and Expertise Transfer
Additional avenues for entry are available via technology licensing and training of local skillset. The government’s Domestic Investment Strategic Fund (DISF) aims to accelerate the shift of Malaysian-owned companies in targeted industries to high value-added, high-technology, knowledge-intensive, innovation-based industries. The fund offers grants for projects, which
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involve collaboration between multinational and local companies for modernisation and upgrading of facilities, joint manufacturing activities and services as well as training and R&D activities. European companies willing to tap into the Malaysian EWT market may find success in entering this market via collaborative projects with knowledge and technology transfer and local skillset training in mind.
Regulations
Like in many other countries in the region, Malaysia has a number of regulations related to Environment & Water technologies. While some regulations are designated to protect and uphold the national interest, others are more pertinent to investors and companies that are in the sector, or looking to enter the sector in Malaysia. The Environmental Quality Act, 1974 (EQA) is the main act related to environmental protection in Malaysia and it specifies a number of regulations that have been introduced and enforced, pertaining to the prevention, abatement, control of pollution and enhancement of the environment in the country. Sub-sector specific regulations have been also introduced over the years. It is important for companies to understand and adhere to these regulations in order to successfully enter the Malaysian market.
The Department of Environment has published a comprehensive Investor Guide, which covers environmental regulations and processes involved for obtaining licenses, and helps companies navigate the Malaysian regulatory environment. Various incentives, import duty and sales tax exemption schemes are available to encourage proper waste management control.
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2. What are the characteristics of Malaysia?
Malaysia is a country divided into two distinct geographical regions separated by a vast body of water that is the South China Sea. Peninsular Malaysia (which is also referred to as West Malaysia) consists of eleven states and is home to 80% of the country’s multicultural population. East Malaysia, which consists of the states of Sabah and Sarawak, occupies the northern part of the island of Borneo. The country borders Singapore and Indonesia at its south, and Thailand and the Philippines at the north of Peninsular Malaysia and East Malaysia, respectively. Malaysia has a land area spanning 328,657 square kilometres and 1,190 square kilometres of water. Its capital city is Kuala Lumpur.
Figure 1: Map of Malaysia Source: CIA Factbook
As of the first quarter of 2020, the country is home to a total population (including foreigners) of 32.74 million1, of which around 26 million reside in Peninsular Malaysia. Close to 1.7 million dwell in its capital, Kuala Lumpur, with another 6.6 million in its metropolitan area. The population of
1 www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=430&bul_id=aFYzVjJ3anNyQytHZGxzcUZxTG9Ydz09&menu_ id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09
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Malaysia consists of many ethnic groups. The Malays and other indigenous ethnic groups, who are accorded the ‘Bumiputra’ status, make up 69.3% of the population, have special privileges and play a dominant role politically. Other ethnic groups in Malaysia include the Chinese, Indians and Eurasians.
Malaysia's official national language is Bahasa Malaysia. On the other hand, the English language, while generally being used, serves as a business language. Chinese and Indian dialects are also spoken in Malaysia.
2.1 Political Overview
Malaysia is a stable, multiracial constitutional monarchy with a parliamentary system of government, based on the Westminster system. The country’s dominant political party was the United Malays National Organisation (UMNO), which led a broad coalition of 13 ethnically- oriented political parties called the Barisan Nasional – the country’s ruling coalition until its first ever defeat during the 14th General Election in 2018 to the newly formed Coalition of Hope comprising four political parties. However, the Coalition of Hope’s government was short-lived when in February 2020 its prime minister unexpectedly resigned. Currently Malaysia is governed by Perikatan Nasional, which is a mix of political parties from fractions of Coalition of Hope and Barisan Nasional. The party is led by Prime Minister Tan Sri Muhyiddin Yassin, who was appointed by the King on the basis that he had the backing of the majority of the House of Representatives.
The Malaysian government has three branches: the executive, legislature and judiciary.
Executive: A head of state – the king – is elected for a five-year term by the nine hereditary rulers (called Raja, Yang di-Pertuan Besar and Sultans) of the nine states in West Malaysia. Meanwhile, the king appoints the governors of the four states (Melaka, Pulau Pinang, Sabah and Sarawak) that do not have hereditary rulers, as well as the prime minister to head the federal government. The incumbent king is Sultan Abdullah of Pahang.
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Legislature: The legislative body of the Malaysian government is divided into two factions: The Senate (Upper House) with 70 members and the House of Representatives (Lower House) with 222 members.
Judiciary: Malaysia’s judiciary system is divided into three branches: the Superior Courts, the Subordinate Courts, and Syariah Courts. The Superior Courts include the Federal Court, Court of Appeal, and High Courts. The Subordinate Courts include Session Courts, Magistrate Courts and other courts.
2.2 Economic Overview
The Malaysian government has long adopted a business-friendly environment to attract businesses and investments from abroad. There are over 5,000 foreign companies from over 60 countries currently operating in Malaysia, which use the country as a base to serve the region. The country is gearing into becoming a high-end manufacturing base, and focusing on the services sector as the next engine of growth. The World Bank predicts that the country’s economy will shift from an upper middle-income economy to a high-income economy by 2024.2
Malaysia’s economy expanded by 4.3% in 2019, compared to 4.7% in 2018, the slowest pace recorded in a decade owing to the lower output of palm oil, crude oil and natural gas, as well as a fall in exports amid the US-China trade war.3 GDP at current price was recorded at MYR 1.51 trillion (EUR 307 billion), while GNI per capita was MYR 45,131 (EUR 9,246) in 2019.
The economy is well-diversified in terms of sources of growth and revenue owing to the economic, financial and fiscal reforms undertaken thus far by the government. The World Bank has however forecasted that the economy will contract by 3.15% due to the Covid-19 pandemic, before rebounding by 6.9% in 2021.4
2 www.worldbank.org/en/country/malaysia/overview#:~:text=After%20the%20Asian%20financial%20crisis,high%2Dincome%20economy %20by%202024. 3 www.nst.com.my/business/2020/02/564829/malaysias-gdp-grows-43-pct-2019 4 www.theedgemarkets.com/article/world-bank-projects-malaysias-economy-contract-31-2020
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Figure 2: Malaysia's Economy in 2019 Source: Malaysian Department of Statistics
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The services sector accounts for an estimated 57.7% of the 2019 GDP, dominated by wholesale and retail trade; finance and insurance; information and communication; and food and beverages and accommodation sub-sectors. This is followed by the manufacturing sector, which contributed 22.3% to GDP in 2019, and dominated by electrical, electronics and optical products, and motor vehicles and transport equipment. Meanwhile, the agriculture; construction; and mining and quarrying sectors contributed 7.1%, 4.7% and 7.1% respectively.
Malaysia aims to become an advanced economy with a high-income status. The Twelfth Malaysia Plan 2021-2025 has been planned with emphasis on shared prosperity and focuses on economic empowerment, environmental sustainability and social re-engineering.5 Due to the recent change of government as well as the impact of the COVID-19 pandemic, the plan is still being reviewed, with the government currently revisiting several economic targets and implementation plans.6
2.3 Trade Overview
Figure 3: Malaysia’s Key Exports and Imports, 2019 Source: Matrade
Malaysia’s total trade in 2019 contracted by 2.5% to MYR 1.835 trillion (EUR 376 billion) compared to the previous year. Exports decreased by 1.7% to MYR 986.4 billion
5 http://rmke12.epu.gov.my/about-us 6 https://www.nst.com.my/news/nation/2020/06/600367/govt-needs-more-time-review-12th-malaysia-plan
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(EUR 202 billion) and imports declined by 3.5% to MYR 849.01 billion (EUR 173.9 billion). This is attributed to softer global demand due to unfavourable external economic conditions and trade tensions in the global market.
China remained the largest trading partner to Malaysia for the eleventh consecutive year, making up 17.2% of the total trade in 2019. The country is also Malaysia’s largest import source, accounting for 20.7% share of total imports in 2019. Other key trading partners are Singapore, the EU27, US, Japan and Taiwan.
Malaysia is party to ASEAN Free Trade Area (AFTA), which includes Brunei, Indonesia, Philippines, Singapore, Thailand, Myanmar, Cambodia, Laos and Vietnam. As part of ASEAN, it has jointly signed trade agreements with China (2003), Korea (2006), Japan (2009), Australia and New Zealand (2010), Hong Kong (2019), and India (2020).
Malaysia has also entered into bilateral trade agreements with Japan (2005), Pakistan (2007), New Zealand (2009), India (2011), Chile (2012), Australia (2013) and Turkey (2015).7 It is party to the Preferential Tariff Arrangement-Group of Eight Developing Countries (PTA-D8) between Bangladesh, Indonesia, Malaysia, Pakistan, Egypt, Iran, Nigeria and Turkey (2006).
It has signed FTAs with the Trans-Pacific Partnership Agreement (TPPA) (2016) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (2018), but these are awaiting ratification. It is currently in the negotiation phase for various FTAs, namely the Regional Comprehensive Economic Partnership (RCEP), the Malaysia-Iran Preferential Trade Agreement (MIPTA), and the Malaysia-European Free Trade Area Economic Partnership Agreement (MEEPA).
Negotiations for an FTA between the EU and Malaysia were launched in 2010, and were put on hold after seven rounds in 2012. A stocktaking exercise took place in 2016-17 to assess the prospect of resuming negotiations. However, following the change in government in 2018,
7 https://fta.miti.gov.my/index.php/pages/view/4?mid=23#:~:text=Malaysia%20is%20currently%20undertaking%20four,Area%20Economic %20Partnership%20Agreement%20(MEEPA)
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the status of the FTA is still unknown, as Malaysia’s new government has yet to take a position on resuming discussions with the EU.8
Bilateral trade between EU and Malaysia
Bilateral trade between the EU and Malaysia equalled EUR 36,57 billion in 2019. EU imports from Malaysia have gradually increased since 2006 and stood at EUR 23.6 billion in 2019, while EU exports have also increased to reach EUR 13 billion last year.
Figure 4: EU Trade Flows and Balance with Malaysia, 2009 to 2019 Source: Directorate General for Trade, European Commission
The EU is the third largest trading partner of Malaysia (after China and Singapore), accounting for 8.4% of the country’s total trade. In 2018, Malaysia became the EU's 23rd largest trading partner.
Bilateral trade between the EU and Malaysia is dominated by industrial products. The EU mainly imports machinery and appliances and mainly exports electrical equipment and machinery (both
8 https://ec.europa.eu/trade/policy/countries-and-regions/countries/malaysia/
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ways industrial products account for more than 90% of trade). Other sectors of relevance in terms of EU imports from Malaysia are plastics and rubber, and fats and oils, and in terms of exports, mechanical products.9
In terms of services, EU exports of services to Malaysia were valued at EUR 3.2 billion in 2018, while imports of services from Malaysia stood at EUR 2.9 billion. The total value of FDI from EU27 to Malaysia was recorded at EUR 23.4 billion in 2018.
Figure 5: EU-Malaysia FDI, Trade in Goods, Services Source: European Commission The latest Malaysia Investment Performance Report has identified two EU states, namely the Netherlands and Spain, as part of the major Foreign Direct Investment sources of Malaysia, at the eighth and tenth spot respectively.10 This makes the EU a key strategic partner for Malaysia and critical to the country's development plans.
9 https://ec.europa.eu/trade/policy/countries-and-regions/countries/malaysia/ 10 www.mida.gov.my/home/administrator/system_files/modules/photo/uploads/20200421094018_REV_Final%20Slides%20AMC%202020.pdf
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2.4 Market Access
As one of the emerging economies in South East Asia, Malaysia offers a strategic and competitive location for business for foreign enterprises. Its well-performing economy, pro-business policies, liberalised investment policies and tax incentives are the main factors that encourage foreign enterprises to operate in the country.11
Using a local distributor or agent is recommended when entering the Malaysian market, as a local partner would take on the responsibility for handling customs clearance, dealing with established wholesalers/retailers, marketing the product directly to major corporations or the government, and handling after-sales service. A local distributor or agent with the right connections and relationships will be able to influence the final outcome.
European companies that are targeting the government sector should consider partnering with local agents and/or setting up a joint venture entity with a Bumiputra (Malay) company. The Malaysian government prefers to work with foreign companies that have a long-term presence in the local market and those that demonstrate commitment by establishing a local office, undertake local assembly or production, or come to the market regularly to maintain relationships and presence.
Strategically located in the middle of the region with excellent transportation infrastructure, Malaysia represents a prime position for regional market expansion. It has a good relationship with the other South East Asian countries, and also shares close cultural links with China, India and the Middle East. It offers a qualified and skilled workforce, and it is relatively cheaper to do business in the country than in neighbouring Singapore. Its openness to the global market is also a key reason for foreign companies to consider operating from Malaysia.
11 www.state.gov/reports/2019-investment-climate-statements/malaysia/
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2.5 Business and Competitive Environment
Malaysia is ranked at the 12th spot in the World Bank’s Doing Business Rank for 2020, three spots higher than its previous ranking in 2019. (see Table 1). The rise is attributed to its reforms in dealing with construction permits, which makes it easier to do business in the country. However it still ranked poorly in starting a business at the 126th spot.
Ease of Doing Business in Malaysia 2020 Rank 2019 Rank Change in Rank
Overall Rank 12 15 3
Starting a business 126 122 -4
Dealing with Construction Permits 2 3 1
Getting Electricity 4 4 No change
Registering Property 33 29 -4
Getting Credit 37 32 -5
Protecting Minority Investors 2 2 No Change
Paying Taxes 80 72 -8
Trading Across Borders 49 48 -1
Enforcing Contracts 35 33 -2
Resolving Insolvency 40 41 1 Table 1: Ease of Doing Business in Malaysia Source: World Bank
In 2019, Malaysia was one of the top 35 ship-owning countries recognised by the United Nations Conference on Trade and Development (UNCTAD).12 It was ranked at the 21st spot based on the value of all commercial ships of 1,000 gross tons and above, and at the 31st spot based on dead- weight tonnage, with 599 propelled seagoing vessels of 1,000 gross tons and above managed, combining both the national flag- and foreign flag-registered vessels. These vessels are capable of managing a total of 8 732 293 dead-weight tonnage.
12 https://unctad.org/en/PublicationsLibrary/rmt2019_en.pdf
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Two of its international ports, namely the Port of Klang in Selangor and Port of Tanjung Pelepas in Johor, consistently ranked as the top 20 busiest ports in the world, while its international ports countrywide manage over 500 million tons of cargo every year. The Straits of Malacca, which is recognised as one of the busiest shipping routes in the world, transmitted more than 80,000 vessels annually with over 25% of global trade transported.
In the 2020 Agility Emerging Markets Logistic Index, Malaysia was ranked in fifth place behind only China (1), India (2), UAE (3) and Indonesia (4), ahead of Saudi Arabia, Qatar, Mexico, Thailand and Turkey.13 The index measures the attractiveness of an emerging market to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors based on a number of factors including the market size, infrastructure and business conditions. It assesses a total of 50 leading emerging markets worldwide. In the index, Malaysia was in second position behind the UAE for business fundamentals, a category that ranks countries based on regulatory environment, credit and debt dynamics, contract enforcement, anti-corruption safeguards, price stability and market access. It was also positioned at the 9th spot as the most promising market for domestic logistics opportunities, and 7th spot for its international logistics opportunities.
Malaysia was also ranked 27th in the Global Competitiveness Report 2019 by the World Economic Forum.14 The rank put Malaysia as the highest ranked country among the developing economies in Asia, and in the 6th spot of the most competitive economies in the region after Singapore, Hong Kong, Japan, Taiwan, China and South Korea. Based on the report, its competitive strength lies in macroeconomic stability, reliable financial system, strong business dynamism, fair product market, flexible labour market, and good market size for companies to access domestically and internationally. Notable improvements were also recorded in infrastructure and ICT adoption.
13 www.agility.com/insights/emerging-markets-logistics-index/rankings/ 14 http://reports.weforum.org/global-competitiveness-report-2019/competitiveness-rankings/
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3. Market Overview & EU Entry Opportunities in Malaysia
3.1 The Environment & Water Technologies Sector
3.1.1 Market Overview
The Malaysian market for Environmental and Water Technologies (EWT) is large and growing. Although the country has been considered to have a moderate to good environmental standard – the country has been ranked 68th out of 180 countries in the 2020 Environmental Performance Index15 - the rising demand for sustainable transportation, clean water, soil, air and energy, and proper waste management infrastructure, as well as widespread concern over the environmental sustainability continue to drive the market growth. Growing environmental awareness and increasingly stringent environmental standards and regulations are also helping the sector to develop.
According to the 2018 Annual Economic Statistics16 published by the Department of Statistics (DOS):
◼ The performance of the water supply, sewerage, waste management and remediation activities sector was valued at MYR 14.4 billion (EUR 3 billion) in 2017.
◼ The value added for this sector increased to MYR 7 billion (EUR 1.4 billion) in 2017 as compared to MYR 5.9 billion (EUR 1.2 billion) in 2015. In addition, the value of intermediate input also increased from MYR 6.4 billion to MYR 7.4 billion (EUR 6.4 billion to EUR 1.5 billion) over the same period.
◼ The water collection, treatment and supply subsector was the greatest contributor to the value of gross output, at MYR 6.8 billion (EUR 1.4 billion), followed by the waste collection subsector, at MYR 3.7 billion (EUR 758 million).
15 https://epi.yale.edu/epi-results/2020/country/mys 16 www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=469&bul_id=anovTlRTWVJuWHFUUXQ5d0UwWjVMZz09&menu_ id=NWVEZGhEVlNMeitaMHNzK2htRU05dz09
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Figure 6: Key Statistics - Water Supply; Sewerage, Waste Management and Remediation Activities Source: Annual Economic Statistics 2018, Department of Statistics
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According to the DOS, expenditure on environment protection grew by 4% to MYR 2.7 billion (EUR 553 million) in 2018, with the 68.1% of spending going to pollution management (MYR 1.8 billion or EUR 369 million), followed by 26.9% to waste management (MYR 726.1 million or EUR 149 million) and 3.4% to environmental assessment and charges (MYR 91.6 million or EUR 18.7 million).17
Operating expenditure accounted for 73%, whereas 27% was spent on capital expenditure.
The manufacturing sector dominated the overall expenditure on environmental protection in 2018, at MYR 1.8 billion (EUR 369 million) or 67.5% contribution, followed by the mining and quarrying sector at MYR 305.5 million (EUR 62.6 million) (11.3%), and the services sector at MYR 293.9 million (10.9%) (EUR 60.2 million).
According to the DOS, the value of fixed assets rose from MYR 7.974 billion (EUR 1.6 billion) in 2015 to MYR 8.39 billion (EUR 1.7 billion) in 2017. Figure 7: Environmental Protection Expenditure, 2018 Source: Department of Statistics of Malaysia
17 www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=154&bul_id=MzU3ajJQUTE2V25sQUxPb0pyM0pCZz09&menu_ id=NWVEZGhEVlNMeitaMHNzK2htRU05dz09
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The Malaysian environment and water equipment and services market is price driven and import intensive, with a high degree of price sensitivity impacting profit margins. As a result, product quality versus pricing is an important challenge in the market.
In general, foreign original equipment manufacturers (OEMs) are the major suppliers of Environment & Water Technologies in Malaysia. However, the effective transfer and assimilation of technology as well as the strengthening of domestic infrastructure is helping to promote local manufacturing. Local participation, domestic distributors, suppliers, contractors and locally produced equipment and technologies are often receiving preferential treatment by the local government.
However, the small size of the Malaysian firms restricts their ability to invest heavily in R&D, placing them at a disadvantage in competing with mature multinationals, or in winning contracts for large projects without international partnerships. On the other hand, local manufacturers of environment and water solutions are often able to offer equipment at lower prices thanks to drastic cuts in terms of overheads, meaning that their added-value of fast product delivery, onsite maintenance, inventory management and after-sales support is often considered as an advantage for cooperation by international companies.
In addition to new project developments, the replacement market for environment and water infrastructure is growing, as there is a constant requirement for upgrading and replacing parts and services of existing sector settlements.
The environmental consulting and engineering (C&E) solutions figure prominently in Environment & Water Technologies as well. Environmental C&E firms are involved in virtually every client sector and media type (air, water, waste, etc.) as front-end providers, designers, providers of solutions and technology, and often as project managers of construction and civil engineering projects. While international companies occupy a significant share of the market, Malaysian environmental C&E firms have also evolved rapidly over the last decade, giving rise to the domestic MYR 300- 400 million (EUR 62-82 million) environmental consulting and engineering solutions industry.18
18 Belgian Foreign Trade Agency (June 2014). Malaysia: Clean Technology Sector
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Drivers of the Environmental & Water Technologies market are principally the federal laws and regulations, self-imposed international standards, budget increases of federal, state and local governments, and the demand for basic environmental infrastructure services.
Institutional framework for Environment & Water Technologies
The key legislation governing environmental developments in Malaysia are the National Environmental Policy, Climate Change Policy and National Environmental Quality Act. Together, they form the basis for environmental management in the country.
The Department of Environment (DOE) is responsible for enforcing the Environmental Quality Act while the Ministry of Environment and Water (MEWA) and the Ministry of Energy and Natural Resources (MENR) are responsible for policies related to water, wastewater, solid waste management, environment and climate change.
It should be noted that prior to the establishment of MEWA and MENR in March 2020 under the current government, water supply and management subjects were under the responsibility of three different ministries, namely the Ministry Water, Land and Natural Resources, the Ministry of Primary Industries and the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC). Before these ministries were set up in May 2018, water supply and management was under the purview of the Ministry of Energy, Green Technology and Water (KeTTHA).
Malaysia has formulated and enacted various policies to strengthen the institutional framework, including the National Environmental Policy and the National Climate Change Policy. In the Malaysian government’s Intended Nationally Determined Contribution (INDC) to the United Nations Framework Convention on Climate Change (UNFCC) in 2015, the country has pledged to an unconditional reduction of emission intensity of 35% by 2030 from its 2005 baseline, with a further 10% reduction upon receipt of climate finance, technology transfer, and capacity building from developed countries.19
19 https://th.boell.org/en/2019/02/27/winds-change-malaysia-government-and-climate
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The Environment & Water Technologies sector has been identified as one of the drivers of the future economy for the nation, which would contribute to the overall green growth and sustainable development. To lead green technology initiatives in Malaysia, the Malaysian Green Technology Corporation was established, which was rebranded to the Malaysian Green Technology and Climate Change Centre (MGTCCC) in December 2019 to highlight the focus on climate change issues as well.20
The centre is a high-level coordination forum for government ministries, agencies, and the private sector mandated to undertake specific tasks in the promotion and development of green technology, including Environment & Water Technologies. It formulates and identifies strategic issues in the National Green Technology Policy and Green Technology Programmes, including the strengthening of the institutional framework, provision of a conducive environment for green technology development, intensification of human capital development in green technology, promotion of research and innovations, as well as public awareness. The government intends that the dedicated central agency can serve as a platform to attract international industry players into the country, thus facilitating collaborative efforts and funding processes.
Policy initiatives for the Environment & Water Technologies Sector
The Malaysian government has recognised the importance of green technologies for its sustainable national development. Various policies have been put in place to accelerate the market development.
The centrality of green technology has been further emphasised by the release of the National Green Technology Policy, which oversees technological developments and regulations in four sectors, namely energy, buildings, water and waste management, and transportation:
◼ Energy: Application of green technology in power generation and in the energy supply management by the industrial and commercial sectors & application of green technology in all energy utilisation sectors and in demand side management.
20 www.nst.com.my/news/nation/2019/10/528617/climate-change-action-council-be-set-year-end-says-yeo
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◼ Buildings: Adoption of green technology in the construction, management, maintenance and demolition of buildings.
◼ Water and waste management: Adoption of green technology in the management and utilisation of water resources, waste water treatment, solid waste and sanitary landfills.
◼ Transport: Incorporation of green technology in the transportation infrastructure and vehicles, in particular biofuels and public road transport.
The National Green Technology Policy has further included:
◼ Strengthening of the institutional framework for green technology
◼ Provision of conductive environment for green technology development
◼ Intensification of human capital development in green technology
◼ Intensification of green technology research and innovations
◼ Promotion of public awareness about green technology
To achieve greater application of Environment & Water Technologies, the government has initiated numerous liberalisation initiatives, such as the 100% foreign equity for incineration services and 51% for other sectors, such as wastewater management and solid waste disposal services.
Research and Development (R&D) in the Environment & Water Technologies Sector
Research & Development (R&D) efforts in Environment & Water Technologies in Malaysia are driven primarily by foreign multinational corporations. The low commercialisation rate of Malaysian research has been attributed largely to the lack of university-industry collaboration, and problems with coordinating policies. However, Malaysia has taken some measures to develop endogenous research in order to reduce the country’s reliance on industrial research undertaken by foreign multinational firms.
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Support for promoting innovation and R&D in Environment & Water Technologies is coming through a number of new establishments, policies and incentives. The National Action Plan for Industrial Technology Development, the National Innovation Model, the Green Technology Policy and the National Transformation Policy have set the focus on commercialisation of environmental technologies in Malaysia.
In particular, the National Green Technology Policy is generating growth in domestic R&D. The Policy mandates strategic green technology hubs to be built across the country under the direction of MGTCCC. The National Green Technology Policy also calls for the design and enhancement of green skills training and education programmes, including the expansion of local research institutes and institutions, research and development of innovation activities on green technology and commercialisation of domestic R&D.
MGTCCC aims to spearhead domestic development of green technologies, such as environmental and water solutions. It aims to position the country as a hub for green technology and transform Malaysia into a Green Community by 2030. As the focal point for green technology, including Environment & Water Technologies, it provides facilities and services in consulting, research and training to spearhead the realisation of the national green technology agenda with strategic goals of: promoting awareness of green technologies, enhancing human competency and capacity in technology applications, developing a widespread and sustainable green technology market, strengthening the industry, and formulating financing frameworks to promote green technology research and development.
Under MGTCCC, various efforts have been made to lead the nation’s green technology landscape through impactful projects, primarily under its four flagship priorities: The Green Malaysia Plan, Green Procurement, Electric Mobility, and Sustainable Living. These initiatives include the National Green Technology and Climate Change Council, ASEAN Energy Manager Accreditation Scheme (AEMAS), Green Technology Roadmap, Green Technology Financing Scheme (GTFS), and Green Township and Green Labelling (GreenTAG).
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Notably, the Green Technology Financing Scheme (GTFS) aims to improve the supply and utilisation of green technologies. The scheme is intended to benefit primarily the domestic producers of green technology, but it is also open for international stakeholders. GTFS 2.0 was launched in March 2018 with a bigger allocation of MYR 5 billion (EUR 1.024 billion) but was discontinued following the change of government in May 2018. It was reinstated in March 2019 with an allocation of MYR 2 billion (EUR 410 million), for the period of two years until the end of 2020, or when the allocation has been exhausted. The scheme continues to support six main sectors in green technologies namely energy, waste, water, building, transport and manufacturing.21
In addition, the Scientific and Industrial Research Institute of Malaysia (also known as SIRIM Berhad), a state-owned research institution operated under the Ministry of Science, Technology and Innovation (MOSTI) has traditionally assisted Malaysia to develop standards for technologies with environmental implications, and to improve the R&D environment in the country. Via its Environmental Technology Research Centre (ETRC), SIRIM Berhad has been driving the domestic development of environmental research and technologies. Its R&D activities span the full range of technologies and solutions with commercial potential in energy and environmental technologies, plant and machinery expertise. In its Green Technologies for Malaysian Businesses programme, SIRIM Berhad has conducted strategic research and development on innovative technologies for climate change and clean environment. Its renewable energy and environmental protection services are accepted globally, and are divided into four priority areas, namely, energy generation, energy storage, eco-product development and environmental technologies.
21 www.malaysiakini.com/news/478155
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Figure 8: SIRIM R&D Areas Source: SIRIM Berhad
In Environmental Technologies, it has worked in sectors of cleaner production, pollution abatement and treatment, waste management, performance monitoring of anaerobic digesters and environmental technology verification. SIRIM’s current research themes are: climate change mitigation / carbon sequestration, climate change adaptation, water management, ecosystem management, resource management (resource recovery and reuse), eco-design, eco-materials and eco-friendly development, bioenergy generation, energy materials and solar thermal technologies.
Finally, domestic R&D efforts on biomass waste bi-products, including biogas, have been largely driven by the Malaysian Palm Oil Board (MPOB). Through a tax levied on every tonne of oil and palm kernel oil produced in the country, the oil palm industry has been funding many of MPOB’s research grants. The MPOB has also been actively looking for collaborations with international partners in various sectors related to palm oil industry, for example, R&D to develop a palm-based jet fuel, a project currently in discussion phase with Chinese partners.22
MPOB has focused its support on innovations in biodiesel and alternative uses of palm biomass and organic waste. Its research has led to the development of wood and paper products,
22 www.reuters.com/article/malaysia-palmoil/malaysia-in-talks-with-several-partners-to-produce-palm-oil-based-biojet-fuel-industry-body- idUSL3N2802W5
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fertilisers, bio-energy resources, and other biomass products to cater to the domestic and international markets.
3.1.2 Key Associations
There are several key associations in Malaysia, which address the Environment & Water Technologies market:
The Malaysian Water Association (MWA) is a platform, which unites individuals and organisations in the water industry in Malaysia. Its membership consists of both individuals and organisations. The strength of the association is derived from the mix of members coming from water supply and sewerage utilities, manufacturing sector, consultancies, contracting agencies, suppliers, regulators and academia. In essence, MWA was established to promote sustainable management of water services in Malaysia. The association puts forward views of its members to the authorities and represents them on strategic issues affecting the sector. Internationally, MWA also maintains linkages with relevant organisations in water sectors in order to provide networking and business opportunities to its members and to develop knowledge exchange programmes.
Waste Management Association of Malaysia (WMAM) represents professionals and practitioners from many disciplines including environment, engineering, law as well as management and service providers. WMAM works to promote and encourage the development of high standards of waste management services in Malaysia including solid and liquid waste, hazardous, and all other types of waste. It also encourages collaboration and cooperation between all those involved and interested in waste management. It is a non-profit, technical and educational organisation that provides a platform for all stakeholders to contribute their views and expertise on matters relating to waste management. Founded in March 2005, it aims to establish and maintain contacts with local as well as international waste management organisations through organising meetings, trainings, workshops and seminars pertaining to waste
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management, including study trips to promote the transfer of practical information and ideas on waste management. It is affiliated with International Solid Waste Association (ISWA) as a National Member since 2007.
Malaysia Biomass Industries Confederation (MBIC) is a leading national biomass industry association. MBIC was formed by the members of the EU-Malaysia Biomass Entrepreneurs Nurturing Programme (EUM- BENP), a flagship project of the EU-Malaysia Biomass Sustainable Production Initiative. The founding members include biotechnology and new green products manufacturing companies, producers of biomass solid fuel and biomass energy project developers, established manufacturers in the pulp and paper industry, bio-composite, green building materials and bio-fertilisers as well as green chemical companies and commercialisation entrepreneurs. MBIC was officially launched in 2012 as a non-profit organisation to develop the biomass industries in Malaysia via strategic partnerships among biomass SMEs, major feedstock owners, research institutes and other local and international biomass stakeholders. In the long term, MBIC aims to be the strategic platform where various biomass sectors are able to synergise their needs and interests for the development of biomass industry as a whole. MBIC is also planning to act as a platform to commercialise, market and utilise the applications of high value biomass products, whilst promoting the principle of sustainable consumption and production. It is expected that MBIC will become a key stakeholder in fostering dialogue with the government agencies, research institutions, civil societies, and local and international bodies, to create and foster awareness of biomass industry.
3.1.3 Entry Strategies
There are multiple strategies that European companies may wish to consider when thinking about entering the Malaysian EWT market. These include the establishment of direct presence, partnerships and joint ventures, tendering opportunities and tradeshows.
The normal path of entry into the EWT market in Malaysia, however, is through the appointment of a sole distributor or agent, or partnerships with local companies. International tenders are
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generally open to all pre-qualified, registered suppliers, but preference tends to be given to foreign suppliers with local distributors or agents.
For foreign companies wishing to enter the market in strategic projects, it is often essential to work with a local partner with relevant industry knowledge as well as marketing and technical support capabilities. Strategic alliances with local companies often involve the form of technology or skills transfer, or a joint venture with equity participation. Transfer of technology by a foreign company to its local partner is considered very important, especially when seeking to secure major government projects.23
Sales to the government also require a local agent and/or joint venture partner, and generally necessitate a local partner to be Bumiputra (ethnic Malay). Direct involvement and demonstrations of long-term commitment to the local market are essential for contracts of significant scale too (for more information on finding a distributor, see Annex 5.2 Starting a Business in Malaysia – Finding a Distributor in Malaysia).
This is particularly relevant given the fact that parts of Malaysia’s Environment & Water Technologies sub-sectors fall under the regulations on foreign equity limits. Although Malaysia practices an open economy market policy, there is a proviso set by the Malaysian Foreign Investment Committee which states that “companies, which activities involve national interests, such as water and energy supply, broadcasting, defence and security, and any activities which are of national interest as determined by the Government from time to time, the participation of foreign interest is limited to 30%.”24
In certain circumstances, the Government may also impose other conditions, such as the issuance of the golden share: allowing foreign equity participation of up to 30% while Malaysian counterpart owns the remaining balance of 70%, of which 30% must be allocated to Bumiputras (ethnic Malay).
23 www.kleanindustries.com/s/environmental_market_industry_news.asp?ReportID=322810 24 Foreign Investment Committee (2008). Guideline on the acquisition of interests, mergers and take-overs by local and foreign interests, page 7, VI Equity Conditions, Para 11.3
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This includes services in the environmental impact assessment consultancy, scheduled waste management services and energy services. Exemptions from foreign equity restrictions are allowed in certain strategic services like recovery of wastes through recycling and incineration. New project investments or expansion in water supply, however, are still limited to 30% foreign equity participation.
Since 1 January 2012, 100% foreign equity is allowed for incineration services under the autonomous liberalisation initiative. Under the ASEAN Framework Agreement on Services (AFAS), Malaysia has made commitments in several environmental service sub-sectors not to exceed the foreign equity of 51%. These sub-sectors include:
◼ Waste water management services;
◼ Protection of ambient air;
◼ Noise and vibration abatement;
◼ Nature and landscape protection;
◼ Solid waste disposal services; and
◼ Private industrial waste management services.
As a result, distribution and cooperation partnerships as well as joint ventures offer the best entry options for European companies.
Specialised tradeshows often serve as a springboard for interested international companies to find relevant local partners. There are several upcoming events, which can offer opportunities to develop business-to-business collaborations:
Asia Water 2020 is the largest and most comprehensive water and waste water event in the ASEAN region, which draws together more than 1,000 exhibitors, allowing participants and visitors to make new business partnerships, exchange knowledge and innovations, and to keep in touch with the business
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contacts. The event will be held on 30 November to 2 December 2020 at the Kuala Lumpur Convention Centre in Malaysia. This is the primary, high value-added event to strongly support the development and sustainability in the water and waste water industries, especially in the South East Asian market. The event offers business-to-business opportunities with over 5,000 international water professionals, decision-makers, potential buyers and partners. Asia Water is supported by the Ministry of Energy and Natural Resources, the Malaysia Water Association (MWA), National Water Commission (SPAN), and several foreign water associations, including from Singapore, Vietnam, the Philippines, Taiwan and South Korea.
The 11th International Greentech & Eco Products Exhibition and Conference Malaysia is a 3-day event, which will be held at the Kuala Lumpur City Centre on 7-9 October 2020. The event showcases products, like Green Energy, Green Transport, Green Building, Solid Waste Technology & Management, Clean Water Technology & Management and others in the Environment and Waste Management industry. Over the years, IGEM has successfully generated over MYR 30 billion (EUR 6.1 billion) in business leads since its initiation in 2010. To date, IGEM has attracted attendance of over 490,000 visitors including delegates, dignitaries and companies from over 60 countries.
3.1.4 Challenges and Entry Barriers
The Malaysian government has a generally favourable attitude towards foreign investment, especially regarding projects that facilitate technology transfers, create high-skilled jobs and contribute capital to the economy. There appears to be no significant barriers to the import of environmental equipment, although certain classes of environmental equipment can attract taxes and duties of 5-10%.
Some of the new ventures in the manufacturing sector may be 100% foreign-owned and the services sector is being liberalised. However, the government’s commitment to opening the economy is applied unevenly. Any FDI that seeks to acquire assets in Malaysia, including ownership of businesses, without giving clear benefit to Malaysians will be actively discouraged.
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In the World Bank’s global Doing Business 2020 report, Malaysia had risen to the 12th position among the 190 economies covered in the survey. The report, however, stated that it is now more difficult to start business in Malaysia and the difficulty level is a significant drop warranting a downgrade from the 59th position in 2016 to 126th position in 2020. It is also challenging to do business in areas outside of the more popular and developed cities such as Kuala Lumpur, with the report suggesting that reform efforts focus on strengthening the business environment and removing obstacles to conduct business at the local level.25
Malaysia is not party to the WTO Government Procurement Agreement, and as a result foreign companies do not have the same opportunity as some local companies to compete for contracts, and, in most cases, are required to take on a local partner before their bids will be considered. In domestic tenders, preferences are provided to Bumiputra (ethnic Malay) suppliers over other domestic suppliers. In most procurement, it is imperative for foreign companies to take on a local partner, often a Malay-owned Bumiputra company, to effectively compete in the market. Procurement often goes through middlemen rather than being conducted directly by the government, which means it can be negotiated rather than tendered. International tenders are invited only where domestic goods and services are not available.
In addition, Malaysia is ranked in the top third of countries in the Corruption Perceptions Index.26 The lack of transparency in business acquisitions can lead to obstacles for successful business entry.
25 www.doingbusiness.org/en/reports/subnational-reports/malaysia 26 https://www.transparency.org/en/cpi/2019/results/mys
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3.2 Fresh Water Supply
3.2.1 Market Overview
Malaysia is blessed with abundant water resources. But the growing industrialisation and urbanisation, over-consumption, adverse weather effects, water pollution and the unsustainable water management are increasing the country’s levels of water stress. As a consequence of this, investments in the fresh water supply and management are becoming a priority for Malaysia. This need is reflected in the growing value of the country’s imports of machinery for water purification, which reached over USD 290 million (EUR 253 million) in 2019 from USD 180 million (EUR 157 million) in 2015. Leading EU exporters include Germany, ranking as the 7th largest exporter in 2019, and France, the 9th largest exporter on the same year.
Fresh Water Resources and Supply
Groundwater accounts for 90% of the freshwater resources in Malaysia while the renewable water sources reach 630 billion m3 – the summation of surface runoff and groundwater recharge. This translates into an annual average water availability of around 28,400 m3 per capita, characterising Malaysia as a country blessed with abundant water supplies.
Water resources in Malaysia Annual rainfall 937 billion m3 Surface runoff 496 billion m3
Evapo-transpiration 414 billion m3 Groundwater recharge 63 billion m3 Table 2: Water Resources in Malaysia Source: Academy of Sciences Malaysia 2016
The country currently derives around 97% of the drinking water supply for agricultural, domestic and industrial needs from surface water sources stored in reservoirs.27 The remainder is acquired via conventional groundwater sources. The main reasons for the lack of groundwater use are the
27 www.wwf.org.my/about_wwf/what_we_do/freshwater_main/
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country’s easy access to, and availability of, surface water resources as well as high exploitation and construction costs of efficient groundwater extraction and treatment plants. Thus, groundwater resources are traditionally used only in certain coastal regions, such as Kelantan (the state with the greatest levels of groundwater utilisation). In general, groundwater is exploited by rural communities to supplement their piped water supplies, as a source of potable water, and is extracted via rudimentary means, such as low technology wells.
In 2018, Selangor had the largest raw fresh water reserves ready for supply, while Labuan, Perlis and Kelantan had the lowest levels of supplies.
Direct Extraction Storage Dams State Ground Water TOTAL (MLD) From River (MLD) (Direct) Johor 1.085 758 n.a. 1,842 Kedah 1,543 20 n.a. 1,563 Kelantan 289 n.a. 212 501 Labuan 69 9 0. 78 Melaka 331 322 n.a. 652 Negeri Sembilan 402 431 n.a. 833 Pulau Pinang 1,010 95 n.a. 1,105 Pahang 1,271 44. 2 1,317 Perak 985 412 n.a. 1,397 Perlis 185 70 3 258 Selangor 4,666 393 n.a. 5,059 Terengganu 451 202 n.a. 653 Peninsular Malaysia & 12,987 2,755 217 15,259 Labuan Table 3: Raw Water Resources Ready for Supply in Malaysia, 2018 Source: National Water Services Commission (SPAN)
Severe weather events have particularly exposed poor infrastructure and old distribution systems to high non-revenue water (NRW), which was estimated to be at around 33.9% in Peninsular Malaysia and Labuan in 2018.28 Water losses have to a large extent contributed to low levels of
28 www.thestar.com.my/news/nation/2020/05/15/water-consumption-goes-up
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fresh water supply. According to data from the National Water Services Commission (SPAN), there were 59,625 unplanned water cuts in Peninsular Malaysia in 2018, far exceeding scheduled water cuts at 2,210. The key state of Selangor experienced 767 scheduled water cuts in 2018, but the number of unplanned disruptions to the water supply was more than 15 times higher, at around 11,781 cases.
2017 2018 State Scheduled Unscheduled Scheduled Unscheduled Johor 691 5,032 621 5,271 Kedah 262 4,355 162 3,003 Kelantan 136 384 137 472 Labuan 0 403 0 266 Melaka 21 117 21 23 Negri Sembilan 26 4,545 18 4,701 Penang 10 4,127 1 4,838 Pahang 281 2,342 325 2,311 Perak 186 13,131 149 26,289 Perlis 5 12 4 7 Selangor 798 19,061 767 11,781 Terengganu 26 1,019 5 663 Table 4: Number of Scheduled and Unscheduled Water Cuts, 2017 and 2018 Source: National Water Services Commission (SPAN)
Malaysia is at risk of water shortages due to growing water consumption and leaks. In 2018, the reserve margin (the difference between the production capacity of water treatment plants and usage) was at 12.7%. The low reserve margin was mainly due to increased demand for water, and the delay in upgrading works for water sources and the supply system, and the building of new water treatment plants (WTPs). Presently, the National Water Services Commission (SPAN) has set a target for WTPs to maintaining a minimum reserve margin of 15%, and for those unable to meet this target, SPAN is encouraging them to increase their reserve margins over the next five years.
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Figure 9: Water Reserve Margin for Peninsula Malaysia and Labuan 2008 – 2019 Source: National Water Services Commission (SPAN) (2019)
Meanwhile, the overall consumption of water in Malaysia has risen from 222 litres per person per day in 2017 to 230 litres per person per day in 2019, surpassing water usage of advanced countries like Hong Kong and the United Kingdom. The level of water consumed in Malaysia is around 30% higher than the set daily water requirement by the United Nations, at 165 litres per person per day.29
In general, the supply side is limited by a number of factors. River pollution is one of the key factors affecting freshwater supply. The three main causes of river pollution are domestic waste, agricultural and manufacturing industrial waste, and farming activities. With the exception of Penang, water catchment areas have not been specifically gazetted and protected. This has placed a huge burden on water supply operators in Malaysia to ensure raw and clean water sufficiency. Freshwater ecosystems are also affected by unsustainable hydropower development, degradation of highland catchment areas and climate change. Together with rapid population growth and over-consumption, these factors are creating a shortage of freshwater supply. At the
29 www.thestar.com.my/news/nation/2020/05/15/water-consumption-goes-up
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same time, the country has not been managing its water resources efficiently. Poor infrastructure has led to major water loses.
Current Status of Fresh Water Supply Management
Approximately 96.7% of Malaysia’s population had access to safe drinking water in 2018.30 Given that almost all of the urban population have access to fresh water supply, the government has focused its attention on water supply in rural areas, aiming to achieve 98% coverage by 2025. In July 2020, the country’s Minister of Environment announced that it is setting up a national-level committee for rural water supply projects to coordinate and regulate the implementation of the projects nationwide, including in Sabah and Sarawak. In addition to improving the quality of services through infrastructure development and water supply systems, the new committee would also focus on improving the operation and system of alternative rural water supply projects.31
Traditionally, Malaysia has employed a water supply management approach to its utilities sector to provide for fresh water demand, as opposed to demand management. As demand for water increased, the government has prioritised investments in more water infrastructure, rather than focusing on efficiency and curtailing excessive demand and water loss. As a result, over the past several years, it has invested heavily to expand the number of operational WTPs, but very little in the optimisation of existing WTPs. As of end 2018, there were 336 WTPs in Peninsular Malaysia and Labuan, producing 14,357 million litres of treated water per day (MLD).32
Adoption of new technologies is low, with mostly conventional treatment systems still dominant in Malaysia. These systems are often not adequate enough to properly treat raw water. The problems of coloured water, algal blossom, high iron and manganese, high ammonia and peat water are still happening in several conventional water treatment plants.33 SPAN reported that in 2019, the water treatment plants were closed more than 300 times mainly in Peninsular
30 www.span.gov.my/document/upload/jLIiaYIqUdYiXDYBKJins6A7iW52LcOe.pdf 31 www.malaymail.com/news/malaysia/2020/07/02/environment-minister-says-setting-up-national-committee-on-rural-water-supp/1880898 32 https://www.span.gov.my/document/upload/jLIiaYIqUdYiXDYBKJins6A7iW52LcOe.pdf 33 Akademi Sains Malaysia (2015). Study on the current issues and needs for water supply and wastewater management in Malaysia
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Malaysia due to pollution. The shutdowns amount to a loss of more than 2,700 hours of treated water production time.34
On the other hand, as water scarcity is expected to be a major problem in large cities throughout Malaysia in the upcoming years, the country is now steadily expanding its focus on rehabilitation and expansion of existing municipal treatment plants. This presages a shift from water supply management to water demand management.
Initiatives in Fresh Water Supply
Through investment by Pengurusan Aset Air Bhd (PAAB), the Malaysian government has committed to improving Malaysia’s water treatment systems and building new plants in order to ensure reliability and adequacy of water supply. PAAB is a national water asset-holding company, responsible for financing capital expenditure. As part of an extensive restructuring of the water sector (which is still ongoing), each state has transferred assets to PAAB with a value equivalent to the outstanding debts owed to the federal government; the assets are then leased back to state-level operators. Capital investment is financed by PAAB, which is able to take advantage of a federal government guarantee to raise low-cost finance on the capital markets and pass on low rates of interest and long pay-back periods (30-45 years) to the state water operators.
To address the freshwater demand and the water stress levels across the country, the Malaysian government has already developed an integrated water management action plan with measures, such as the mandatory use of labelling of water efficient products; intensive enforcement to overcome water theft; the promotion and use of alternative water resources; water efficient audit of big consumers; efficient use of raw water resources in all economic sectors; and supervision of all water operators to achieve their KPIs, including the reduction of their non-revenue water (NRW).35
Various water treatment and supply projects are ongoing. One initiative is the construction of the Langat 2 WTP and Water Reticulation (LRAL2) in Selangor, which started in May 2014 and is expected to be completed by end of 2022. As of December 2019, the LRAL2 project stood
34 www.awer.org.my/?pgid=home&cid=460 35 www.thestar.com.my/news/education/2014/10/05/plugging-the-leaks
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at 80.33% completion. When completed, it will be the largest water supply scheme in Malaysia, supplying 2260 MLD of treated water to the targeted demand centres of Selangor, Kuala Lumpur and Putrajaya.
Similarly, the federal government has approved an allocation of about MYR 200 million (EUR 41 million) for the construction of Jernih Dam in the state of Melaka. The project includes construction of a dam, control tower, spillway, utility station, water catchment pond and access road. The dam has a capacity of 13 billion litres and is expected to be completed by 2022-2023.36
In the state of Kedah, there are plans to upgrade the existing and develop new water infrastructure. Some of the works include the upgrading of four WTPs, namely Bukit Selambau, Sungai Limau, Jenun Baru and Lubuk Buntar Lama, which are expected to be completed in 2022. Meanwhile, upgrading work for the Pelubang WTP is in progress and will be completed in 2023.
Utilisation of Alternative Water Resources
In addition to seeking improvements for water supply via new WTP projects and the optimisation of old WTPs, the government is also seeking to utilise other water resources for supply. Among the current initiatives are:
Groundwater supply: While rationing has been employed as a short-term mechanism to cope with El Nino effects, the government is exploring alternative options to ensure uninterrupted water supply. Currently, groundwater is exploited mainly in the states of Kelantan, Selangor and some parts of Sabah and Sarawak, as most of the water requirements come directly from surface water or river sources. Based on the data from the Malaysia Water Industry Guide, groundwater usage is low, contributing only 250 MLD or 1.3% of total water supply per year.
Pilot studies have been utilised to explore groundwater utilisation, especially in areas where the surface water resources have been developed to their limits. In the resort island of Langkawi, the government has decided to implement underground water extraction as well as the construction of a below surface water dam project worth MYR 310 million (EUR 63.5 million).
36 www.malaymail.com/news/malaysia/2020/03/11/govt-approves-rm200m-for-jernih-dam-project-in-melaka/1845525
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The proposed project will offer alternative water resources for the island, given the longer dry seasons, the high level of NRW and the increased demand.37
The Malaysian government has recently approved a Climate Change Mitigation Programme to improve water supply, which includes a possibility of using groundwater. This programme includes research on possible climate change and natural disaster effects on water supply. The programme also includes the exploration of alternative water resources.
Rainwater harvesting: In addition, rainfall harvesting has recently gained interest in both private and public circles, and its implementation has started for irrigation and domestic uses. According to the Malaysia Consumer Sentiment Study H1 2020, rainwater harvesting is among the sustainability features in demand among home seekers at 37%, followed by water recycling (31%) and food waste composter systems (22%).38
The government has also implemented regulations, which now mandate housing estates to implement rainwater harvesting in six of the states in Malaysia: Perak, Selangor, Melaka, Johor, Kelantan and Perlis as well as the Federal Territory of Kuala Lumpur. Local authorities are also said to not approve buildings plans from developers who do not include a rainwater harvesting system for residential buildings, such as bungalows, detached and semi-detached houses with a roof area exceeding 100 m2.39 In certain states, income tax deductions are given to building owners that implement sustainable measures, including harvesting and recycling of rainwater.
Water desalination: Seawater is considered a potential source for water in Malaysia, given its strategic location with easy access to the South China Sea and Melaka Straits. Having desalination plants along the coast may also help to alleviate water stress. In January 2020, Melaka Smart City Council stated that it is considering desalination and recycling wastewater methods to improve efficiency in its effort to address water woes. The Council is working on an affirmative water action plan by 2021 to avoid any rationing in the future.40
37 www.thesundaily.my/local/underground-water-extraction-to-meet-langkawi-s-needs-EX1909125 38 www.dailyexpress.com.my/interest/347/home-buyers-keen-on-solar-solutions-and-smart-cooling/ 39 www.thesundaily.my/archive/1017731-IRARCH248402 40 www.nst.com.my/opinion/letters/2019/07/507010/2-water-cuts-show-we-must-plan-water-security
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Institutional Framework and Regulation
From the regulatory and institutional standpoint, the water industry in Malaysia is covered under the jurisdiction of several institutions. Water is placed under the purview of MEWA. The Federal government oversees policy-making and the advancement of water policies at the national level, whereas the state governments handle the management and monitoring of water sources, catchment areas and research on alternative sources for water supply. The National Water Services Commission (SPAN) regulates the water industry. Meanwhile, abstraction and treatment functions, as well as water distribution, are handled by either State Departments or private companies. Since 2006, all water assets in Malaysia are owned by the Pengurusan Aset Air Bhd (PAAB), which then leased back to public and private operators. In addition, the Ministry of Health oversees regulations under the National Water Quality Surveillance Programme for all water companies to comply with the water quality monitoring and testing.
Figure 10: Framework of Water Supply
State Water Operator Johor Ranhill SAJ Sdn Bhd, Melaka Syarikat Air Melaka Berhad (SAMB) Negeri Sembilan Syarikat Air Negeri Sembilan Sdn Bhd (SAINS) Selangor Pengurusan Air Selangor Sdn Bhd
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State Water Operator Perak Perak Water Board, Pulau Pinang Perbadanan Bekalan Air Pulau Pinang Sdn Bhd Kedah Syarikat Air Darul Aman Sdn Bhd (SADA) Perlis Syarikat Air Perlis (SAP) Pahang Pengurusan Air Pahang Berhad (PAIP) Terengganu Syarikat Air Terengganu Sdn Bhd (SATU) Kelantan Air Kelantan Sdn Bhd (AKSB) Sabah Sabah Water Department Sarawak Rural Water Supply Department (JBALB) LAKU Management Sdn Bhd Sarawak Kuching Water Board (KWB), Sibu Water Board (SWB) Labuan FT Labuan Water Supply Division Table 5: Water Operators by State Source: National Water Service Commission
The following table provides details on the key institutions and actors, and their areas of responsibility in the fresh water supply sector:
Body Area of responsibility Description
Development of a holistic water policy for the Ministry of Environment and Policy Water. country by setting policy directions
Manage existing water basins with the view of State Government (13 States and Water Resources protecting the quality of raw water and identifying 3 Federal Territories) new water basins when required
National Water Services Regulate the whole water industry based on the Regulatory Matters Commission (SPAN) policy direction set out by the Federal Government
Pengurusan Aset Air Bhd (PAAB), Acquire and manage all state-owned water related also known as the Water Asset Asset Management assets Management Company
Abstraction, Treatment and Handles abstraction, treatment and distribution Public and private operators Distribution services in water supply industry
Table 6: Key institutions for water supply in Malaysia Source: National Water Services Commission (SPAN)
The government is using the Water Quality Index (WQI) and the National Water Quality Standards for Malaysia (NWQS) to evaluate the status of the river water quality. The WQI, utilised for over
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25 years, serves as the basis for the assessment of water quality, while the NWQS classifies the beneficial uses of watercourse on WQI.
According to the National Quality Standards, surface water quality can be gradually improved and upgraded. Effective, equal and sustainable water provision is possible but this depends largely on the commitment of all relevant parties to adhere to the effective water management policies.
Local Companies
Salcon Berhad is one of the leading water and waste water engineering companies in Malaysia as well as the wider ASEAN region. While headquartered in Selangor, Salcon operates its water and waste water divisions in Hong Kong, Indonesia, Sri Lanka, Thailand and Vietnam. Apart from its water and wastewater engineering services, Salcon is also engaged in property development, technology services (smart city technologies), solar power and transport services. Some of its recent projects in Malaysia include the construction of a water treatment plant in Tamparuli, Sabah state worth MYR 124.7 million (EUR 25.5 million) to be completed in 2021, and a works package worth MYR 39.8 million (EUR 8 million) to supply and install mild steel pipes for the Langat 2 Water Treatment Plant and Water Reticulation System, which was completed in May 2020.
Since its establishment in 1974, the company has undertaken over 1,000 projects related to water supply and wastewater treatment, and more than 5,000 MLD of total water treatment capacity. Via its water division, Salcon Engineering Berhad, the company offers a wide spectrum of total water solutions, including raw water management, design, procurement, construction, installation, testing, commissioning, operation and maintenance of water treatment facilities, as well as transmission and distribution of treated water; and downstream activities, such as non-revenue water reduction, customer service, billings and collection.
Among the water treatment technologies, Salcon adopts the Dissolved Air Floatation (DAF), Lamella Clarifier and membrane systems. It is also known to partner with a number of leading global water and waste water engineering solution providers to develop its solutions for clients. The partner list includes companies from Asia and North America.
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Ranhill Water Services Sdn Bhd (RWS) is a leading water services company in Malaysia. As a subsidiary of Ranhill Berhad, a dominant player in water supply, water and waste water treatment, non-revenue water and clean energy services, RWS specialises in operational, management, construction and consulting services for water and waste water service providers across Asia. The company was set up in 2005 with 11 employees and has expanded since then to a 400- strong team of specialists.
The company is currently the leading water operator in Malaysia. With its own water utility company, SAJ Ranhill Sdn Bhd, it supplies water to Malaysia’s southern state of Johor, the second most populous state in the country. RWS has a portfolio of national and international projects with geographical footprint in Indonesia, Thailand, Vietnam, Sri Lanka, Nepal, India and the Middle East. In 2012, the company also set up its own subsidiary, Premier Water Services Sdn Bhd (PWS), in order to expand its focus on Non-Revenue Water (NRW) Management and Network Modelling services. The subsidiary entity is focused on the provision of non-revenue water technology solutions for a wide range of clients. PWS also cooperates with the UK-based environmental solutions provider, Technolog Co. Ltd., as its main distributor in Malaysia, and receives consultancy support services from the Utilitec Services UK, a consulting company under the Technolog Group umbrella.
HSS Engineers Berhad (HEB) is an investment holding company specialising in the provision of engineering and project management services including engineering design, construction supervision, project management, environmental services and building information modelling services. Established in 2015, HEB now operates from four main offices, three in Malaysia and one in India. HEB’s workforce grew to approximately 1,000, of which more than half are engineers. It possesses longstanding experience in a wide array of sectors including urban infrastructure, transportation planning, roads and highways, railways and metro systems, water resources and supply, waste management, building and structures, as well as power generation.
In 2018, HEB acquired SMHB Engineering Sdn Bhd, an engineering consultancy specialising in the water sector infrastructure, with more than 35 years of experience in the sectors of water resources and water supply schemes, dams and off-river storages, wastewater and solid waste
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collection and treatment, drainage and irrigation, flood mitigation, rail, roads, highways, bridges, infrastructure, district cooling systems, building services and hydropower in Malaysia and abroad.
Water-related projects in its pipeline include the Sungai Perak Raw Water Transfer Scheme, Upgrade Works for Water Resource and Supply in Johor, Langkawi Water Supply, Development of the Rasau Water Supply Scheme, Sarawak Grid Study, as well as various NRW and Off River Storage projects.
Figure 11: The proposed abstraction area for the Sungai Perak Raw Water Transfer Scheme Source: PBAPP (2019)
3.2.2 EU Entry Opportunities
Opportunities in freshwater supply exist for EU players across several areas, such as:
◼ Provision of technologies for new WTPs and upgrading of existing WTPs
◼ Water supply diversification
◼ Water and waste water reuse in irrigation sector
◼ Water efficiency and conservation systems
◼ Seawater desalination project development
◼ Water supply testing, analysis, inspection and training
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Provision of Technologies for New WTPs and Upgrading of Existing WTPs
A major initiative by the government to address the water shortage problem is to increase distributable capacity and existing reserve by building new, and upgrading existing, WTPs. In 2019, the Ministry of Environment and Water (MEWA) announced plans to build more WTPs in order to further improve the water supply system in the country. The plans are expected to be included in the 12th Malaysia Plan (2021-2025), and would be fully realised within the next 10 to 15 years.41
In the upcoming years, focus will also be given to states which have water supply reserve margins of less than 10%, such as Kedah, Kelantan, Perlis, Sabah, and Selangor.
2016 2017 WTPs Reserve WTPs STATE No. Of Design Production No. Of Margin Design Reserve WTPS Capacity WTPS Capacity Production Margin (MLD) (%) (MLD) (%) Johor 44 1,986 1,661 16.4 45.0 1,9862,009 1,752619 12.8 Kedah 36 1,308 1,361 0 38.0 1,494 1,370 8.3 Kelantan 35 500 471 5.8 35.0 500 475 5 Labuan 6 101 72 29.2 6.0 101 71 30.1 Melaka 9 639 510 20.1 9.0 639 513 19.7 N.Sembilan 23 1,000 779 21.1 23.0 1000 771 22.8 Pulau Pinang 9 1,599 1054r 34.1. 9.0 1,599 1,058 33,8 Pahang 76 1,414 1,111 21.4 72.0 1,480 1,109 25.1 Perak 46 1,846 1,317 28.7 46.0 1,846 1,314 28.8 Perlis 4 233 230 1 5.0 261 241 7.4 Sabah 73 1,304 1,221 6.4 80.0 1,478 1,261 14.7 Sarawak 93 1,675 1,328 20.7 94.0 1,803 1,466 18.7 Selangor 34 4,606 4,807 0 34.0 4,606 4,842 0 Terengganu 12 846 616 27.2 13.0 891 641 28.1 MALAYSIA 500 19,056 16,536 13.2 509 19706 16,884 14.3 Table 7: Water Treatment Plants in Malaysia, 2016-2017 Source: National Water Service Commission
41 www.thestar.com.my/news/nation/2019/05/26/xavier-more-water-treatment-plants-planned-under-12th-malaysia-plan/
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Additionally, the Malaysian Environment and Water Ministry has put forward a proposal to raise the water tariff to upgrade the water industry’s infrastructure nationwide. The proposal aims to address water disruption, reduce non-revenue water (NRW) rate and other supply issues. The tariff increase will enable water concessionaires to inject more capital into maintenance works, as well as change and upgrade the piping system and distribute clean treated water more efficiently.42
These developments provide opportunities for European companies to export their solutions and provide EPC service to the Malaysian government for new WTP projects and the upgrade of existing WTPs. Newer technologies, which can optimise the plant efficiency and reduce the NRW are particularly in demand.
Water Supply Diversification
Figure 12: Pintu Geng Water Treatment Plant Uses Groundwater Resources
Malaysia is now almost entirely reliant (97%) on one source, namely, surface waters, for its raw water supply – an undesirable dependency over the long term from the standpoint of water security. Recent water stress events affecting a number of states have further underlined the
42 www.nst.com.my/news/nation/2020/02/562532/higher-water-tariff-necessary-upgrade-infrastructure
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pressing need to ensure assured water supply, more so for a nation that has ample rainfall and alternative water reserves.
In 2019, MEWA announced that it has been working with local and foreign partners to conduct a study on alternative water sources, particularly technology for 4D mapping of underground water resources. In collaboration with the Ministry of Mineral and Geoscience Department, it aims to uncover the potential five trillion cubic millimetres of underground water in the country.43
Diversification of supply sources is expected to be actively pursued by the Malaysian government in the medium-term period to address the water shortage in the country. Given the low technological capacities of local companies, European companies with cost effective solutions are likely to find increasing opportunities in Malaysia.
Rainwater harvesting is another emerging trend in Malaysia, where the backyard system, frontage system, and underground system of rainwater harvesting have been implemented. The backyard system is the most utilised in the country, given its low cost and ease of installation, compared to other systems that require the installation of plumbing systems. Rainwater harvesting has already been implemented in many developments, including commercial buildings, complexes and mixed projects to harvest rain water for watering plants and flushing toilets.
The government has issued regulations which make it mandatory for rainwater harvesting systems to be installed in housing estates in six of the states in Malaysia: Perak, Selangor, Melaka, Johor, Kelantan and Perlis as well as the Federal Territory of Kuala Lumpur. Local authorities will not approve building plans from developers who do not include a rainwater harvesting system for residential buildings. The types of residential buildings affected are bungalows, detached and semi-detached houses with roof area, larger than 100 m2. As a result, this sector segment has the potential for expansion with plenty of opportunities for European companies. Rainwater collection systems should be designed to suit a country like Malaysia, where rainfall is intense, averaging at 3,000 mm per year.
43 www.nst.com.my/news/nation/2019/07/507220/xavier-govt-mapping-underground-water-resources
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Water and Waste Water Reuse in Irrigation Sector
There are further opportunities for companies to provide technical and service expertise for improving water quality as well as water and waste water reuse in the irrigation sector. The agricultural sector has shown interest in acquiring systems that help counter the effects of dry seasons efficiently. European companies are well positioned to provide technical skills, technology and know-how to improve irrigation systems and they are likely to find demand for their services in Malaysia.
Water Efficiency and Conservation Systems
Malaysia has expressed desire to invest more in efficient use of water and water conservation systems. Although there are challenges to be overcome, the Malaysian government is starting to focus on proactive measures in water management. The target is for water supply to become more stable during drought seasons, and for infrastructure to effectively prevent flooding during wet seasons. This creates business opportunities for European companies with expertise in water resource information systems, efficient water management infrastructures, and/or efficiency optimisation services.
Seawater Desalination Project Development
Although seawater desalination plants do have their drawbacks, such as high energy costs, advances in membrane technology over the last decade have significantly reduced the energy and capital costs of seawater desalination plants, making them an attractive option to be considered. Recent interest from the Melaka City Council and other stakeholders across Malaysia point to potential opportunities for European companies to engage in seawater desalination projects. Officials are reported to be especially looking for solutions that are cost-effective.
Water Supply Testing, Analysis, Inspection and Training
In September 2019, the Water, Land and Natural Resources Ministry launched the Integrity and Anti-Corruption Framework for Licence Holders and Certified Agencies to curb offences on
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governance in the water services industry involving audit, risk assessment, monitoring, training and communications. This resulted in operators and suppliers in the water supply and sewerage services industry being required to allocate 1% of their annual operation budget for integrity programmes starting 2020. Under this framework, compliance to the framework would be one of the special conditions imposed by the National Water Services Commission (SPAN) when awarding or renewing water supply and sewerage operator licences.44
European Companies
KRW Water Research Institute
KRW is a research institute based in the Netherlands. It was established in 1948 and was known as Kiwa, a certification institute for water pipe articles, which later became an independent entity in 2006 with the Dutch water companies as its shareholders. KWR’s clients are mainly water companies, water boards, governments, industry and SMEs both domestically and internationally. The firm offers its services based on three key functions: Water Quality and Health, Water Systems and Technology, and Knowledge Management.
In November 2019, KWR collaborated with Penang Water Supply Corporation (PBAPP) and the Malaysian Water Association (MWA) to explore the best ways to manage water treatment plant residual. The collaboration also seeks to address recycling sludge and turning it into economic products, which include construction materials and cosmetic products.45
Degrémont
French Degrémont operates under the parent company, SUEZ Environnement. The company is involved in providing water and waste water treatment solutions to municipal and industrial clients. With offices in Kuala Lumpur, it offers expertise in designing, building, equipping, operating and financing facilities for water source and process water.
44 www.mwa.org.my/news?pagedetail=310 45 www.buletinmutiara.com/tapping-on-dutch-expertise-in-water-management/
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While the company has not been involved in major, large scale water treatment projects in Malaysia yet, it supplies its equipment and technologies to other engineering companies with projects in water supply Engineering, Procurement, Construction and Commissioning (EPCC). The company is also known as a member of industrial associations of water and waste water treatment, including the Malaysian Oil & Gas Services Council (MOGSC). inge GmbH inge was founded in Germany in 2000 and in 2011 it became part of the chemical giant BASF. It is a leading provider of ultrafiltration technology used in the treatment of drinking water, process water, sea water and waste water. Its products include Multibore membranes, dizzer modules and T-Rack® rack solutions. Its German headquarters coordinates the company’s major processes, including research and development, production, marketing and sales.
The company ventured into Malaysian market when it became involved in the Kelantan water treatment plant development in March 2013.46 The Wakaf Bunut Water Treatment Plant was the country’s largest riverbank filtration (RBF) and ultrafiltration (UF) facility, developed to produce drinking water for municipalities. The plant is capable of producing up to 14 million litres of drinking water per day to be supplied to the Tok Bali region.
46 www.inge.basf.com/ev/internet/inge/en/content/inge/News/2015_05_04_Malaysia_river_bank_and_ultrafiltration
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3.3 Waste Water
3.3.1 Market Overview
In Malaysia, waste water originates from a combination of domestic, industrial, commercial and agricultural activities as well as sewer inflow and infiltration. The industrial waste water market in Malaysia is primarily focused on food and beverage, power, automotive and palm oil industries, with the latter contributing most to the industrial waste water due to its sheer industrial size.
Water quality has become an important concern in Malaysia as a direct consequence of accelerated economic development, rapid urbanisation, and population growth. Given that 97% of the total water use originates from rivers, the increasing pollution in rivers and lakes has made it necessary for water providers to take measures towards providing sustainable solutions to waste water.
Figure 13: Factories Pump Toxic Effluents into Malaysia’s Rivers Source: Emaze
Major pollutants in Malaysia’s rivers and lakes are Biochemical Oxygen Demand (BOD), Ammoniacal Nitrogen (NH3-N) and Suspended Solids (SS). High BOD is attributed largely to untreated, or partially treated, sewage from manufacturing and agro-based industries. The main sources of NH3-N are domestic sewage, livestock farming and other liquid waste products whereas the main sources of SS are earthworks and land clearing activities.
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Although the applications of waste water treatment technologies and solutions are growing, the Malaysian market has not reached its full potential yet. While progressing, the country’s waste water and sewerage systems remain largely underdeveloped and outdated, with some treatment facilities operating since 1900 without upgrades. The progress on updating the systems has been moving slow, especially due to high capital costs for operations and maintenance. As a result, tertiary water treatment processes are not yet widely available in Malaysia and its implementation has not set pace.
Currently, sewage is only processed and treated up to removal of suspended and organic solid substances. In general, waste water remains treated primarily up to preliminary, primary and, to some extent, secondary treatment levels. Some facilities with tertiary treatment exist, but they are not widespread. Stricter implementation of regulatory norms and scarcity of water is however leading to a growing use of reclaimed water by industries. Opportunities are growing in tertiary treatment systems as removal of agricultural run-off has presented itself as a treatment challenge.
As of 2019, the national operator of sewerage services, Indah Water Konsortium (IWK) Sdn Bhd is operating and maintaining more than 6,800 sewage treatment plants across more than 19,400 km of sewer pipelines. IWK provides sewerage services to approximately 26 million people. Additionally, unconnected systems in the form of septic tanks amount to around 1.2 million tanks, as well as an equal number of the pour-flush system, mostly used in rural areas.
2017 2018 Sewerage facilities Population Population Quantity Quantity Equivalent (PE) Equivalent (PE) Public Sewage Treatment Plant (a+b) 6,871 25,237,725 6,932 26,127,046 a. Multipoint Plant 6,770 17,105,465 6,830 17,511,383 b. Regional Plant 101 5 8,132,260 102 8,615,663. Private Sewage Treatment Plant 3,603 3,373,471 3,841 4,010,610 Communal Septic Tank 4,359 531,127 4,231 515,527 Individual Septic Tank 1,354,986 6,934,008 1,357,553 6,998,919 Traditional System 1,171,555 5,857,775 1,185,032 5,925,160 Network Pumping Station 1,183 n.a. 1,237 n.a. Length of Sewer Network (km) 20,100 n.a. 20,225 n.a. Table 8: Sewerage facilities 2017-2018 Source: National Water Service Commission (SPAN)
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Sewage treatment plants (STPs) operated by Indah Water Konsortium (IWK) generate about 4billion litres per day of treated effluent, which is discharged into receiving waters. This corresponds to approximately 25% of the total water supply production available for non-potable use. IWK operates and maintains all public STPs and sewer networks within the service area covering the whole country except 3 states: Kelantan, Johor Bahru and Pasir Gudang.
Centralised wastewater Middle scale or cluster type Decentralised wastewater Type of system treatment wastewater treatment treatment Definition Sewage Treatment Plants Multipoint Sewage Treatment On-site treatment systems Catering to a sewerage Plants which cater to scattered designed to treat and dispose of catchment area development by different effluent from single premise developers and/or single ownership development Number of installations 101 10,373 2,530,900
Population served by the wastewater 8,132,260 20,487,766 12,935,943 treatment system Table 9: Wastewater Treatment Systems in Malaysia, 2017 Source: Malaysia Water Industry Guide 2018 (exclude Sabah & Sarawak)
Limited connectivity to, and coverage of, sewerage networks, however, has stymied growth in the sector. Yet, there are strong indications that this may change in the upcoming years as large waste water infrastructure projects are introduced and come in production.47 For example, in 2019 the government announced its plans to build several sewage treatment plants worth MYR 2 billion (EUR 409.8 million) in states such as Kelantan, Pahang and Johor, under the 12th Malaysia Plan (12MP). The government has also launched the Langat Central Sewage Treatment Plant (CSTP) to replace the existing 232 small sewage treatment plants in Cheras and Kajang that were outdated and inefficient. CSTP is expected to be fully completed by 2023 and will be able to handle sewage inflows of up 207,000 m3 per day, or 920,000 PE, over the next 20 to 30 years.
47 www.export.gov/article?id=Malaysia-Water-Industry
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Figure 14: The Langat Central Sewage Treatment Plant (CSTP) Source: Star Online
Similarly, in Forest City, a new smart city project in the state of Johor, the developer plans to build eight waste water treatment plants, which will use advanced biotechnologies to convert waste water into recycled water available for reuse.
Specific to smart city projects in Malaysia, in 2019 the Housing and Local Government Ministry launched the Malaysia Smart City Framework to serve as a guideline for local governments to develop cities into smart cities. The smart city is envisioned to be integrated with various sustainable technologies, including smart treatment of water and waste water. Five pilot cities, namely Kulim, Kuala Lumpur, Johor Bahru, Kota Kinabalu and Kuching, will undergo identified projects to be upgraded into smart cities. For instance, the ministry is working with South Korea’s government to implement a smart water management system in Kota Kinabalu.48 49 Notably, in 2020, Malaysia has developed a pioneering waste water treatment model called Advanced Moving Bed Bio-Rector, which can effectively cleanse and remove sediments, as well as reuse some of the sediments for other purposes. Led by Felda Water and Kyto Water Sdn Bhd,
48 www.thesundaily.my/local/ministry-launches-malaysia-smart-city-framework-BN1395377 49 https://molit.go.kr/english/USR/BORD0201/m_28286/DTL.jsp?id=eng_mltm_new&mode=view&idx=2899
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the treatment model is being applied in a pilot project at the Felda Waste Water Treatment plant at Pantai Tengah on the resort island of Langkawi. The federal government is planning to expand the model to other similar plants nationwide and to export such technology depending on the pilot project result.50
While waste water has been traditionally managed via large, centralised treatment facilities in urban areas and septic tanks in rural areas, today, the market of innovative, decentralised waste water systems is also growing. The number of private sewage treatment plants has increased from 3,158 in 2015 to 3,603 in 2018.
Figure 15: Centralised Sludge Treatment Facility in Malaysia
In 2019, Malaysia imported half of its water technology from abroad, with imports of equipment for water treatment amounting to US$ 486 million. East Asian, European, Japanese and North American markets remain the leading exporters of water treatment products to Malaysia. The leading products in the waste water sub-sector revolve around various types of pumps, such as reciprocating positive displacement pumps, rotary positive displacement pumps, centrifugal
50 www.thesundaily.my/local/underground-water-extraction-to-meet-langkawi-s-needs-EX1909125
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pumps, and liquid elevators. In addition, the suit of treatment technologies, such as extended aeration (a method of sewage treatment), oxidation ditch, rotating biological contractors, sequenced batch reactors and trickling filters are also gaining traction.
While imports account for significant proportion of water technology in Malaysia, the government has been actively pushing the acceleration of domestic market growth via preferential status for local distributors, suppliers, contractors, and locally produced water treatment equipment and technology.
Waste water and sewage treatment activities in Malaysia are regulated by the main waste water concessionaire, Indah Water Konsortium Sdn Bhd (IWK). Since its establishment, IWK has been handling sewerage treatment and waste water services throughout Malaysia, except in Johor Bahru, Kelantan, Sabah and Sarawak. Additional agencies, namely, the National Water Services Commission (SPAN) and the Ministry of Environment and Water, regulate the sewerage services and monitor effluent discharge across the country.
Three acts at the Federal level, namely, the Sewerage Services Act 1993 (Act 508), the National Water Services Commission Act (Act 654) and the Water Services Industry Act 2006 (Act 655), currently regulate the waste water sub-sector.
The Malaysian Water Association (MWA), an industry association has also pushed forward several suggestions to the Department of Environment (DoE) to build a complete database on waste generation in line with the development of Water 4.0 and enhancing the Internet of Things and Big Data. MWA also requested the authorities to ensure stricter pollution control laws to prevent water pollution and prevent frequent water supply disruptions, such as the introduction of an environmental tax based on pollution load discharged into rivers. MWA further believed that illegal factories should be eradicated and urged the authorities to adopt the use of digital technology, such as GIS Aerial Mapping, to better monitor and locate illegal structures.
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Local Companies
Techkem Water Sdn Bhd is a Malaysian company specialising in water treatment programmes. It provides an array of products and services as well as systems and equipment for waste water treatment. Since its incorporation in 2002, the company offers water and waste water solutions to public and private clients across Asia. It has extended its business presence to Indonesia, Thailand, Myanmar, Vietnam and Philippines. Its current focus is on the municipal, commercial and industrial markets.
Some of its recent projects in Malaysia include treatment of waste water discharged from glove processing lines in Selangor, a paper mill waste water treatment plant in Penang, and water treatment projects using reverse osmosis and ultrafiltration technologies.
Ranhill Water Technologies Sdn Bhd (RWS) is waste water treatment company working under the umbrella of the Ranhill Water Technologies (Cayman) Limited. It is focusing on the treatment of potable water and industrial effluent. RWS’s clients comprise state-owned water companies and industrial plants in Malaysia, and in the wider ASEAN region. To date, its water and waste water treatment capacity has reached 2,378 million litres per day (MLD), with water and waste water treatment concessions in China and Thailand contributing 290 MLD and 114 MLD, respectively.
The company has completed over 100 water and waste water treatment projects in Malaysia, Thailand and China. In 2020 alone, Ranhill secured three contracts worth MYR 1.07 billion (EUR 219 million). Its services include primary water treatment, biological and potable water treatment, fine clarification and polishing, sludge clarification and thickening, process water clarification, water recycling and membrane treatment systems. Apart from Sequencing Batch Reactor (SBR) technology, RWS also adopts Dissolved Air Floatation (DAF) and other systems for its integrated solutions.
Envitech Sdn Bhd is Salcon’s waste water division. As a leading player in waste water treatment sector in Malaysia, the company has completed over 400 projects related to sewerage treatment systems and sewerage treatment networks across the country. Envitech offers turnkey and specialist engineering services, including the design, procurement, construction, installation and
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commissioning of waste water treatment projects. Waste water treatment technologies adopted by the company include membrane and vacuum systems, and the Intermittently Decanted Extended Aeration (IDEA) activated sludge system. Out of the three systems, its IDEA is the most popular technology used by its specialists.
3.3.2 EU Entry Opportunities
Opportunities exist for EU players across various areas, such as:
◼ Waste water treatment solutions for the palm oil industry
◼ Tertiary waste water treatment systems and new, optimised technical solutions
◼ Efficiency and reliability optimisation
◼ Decentralised waste water systems
◼ Secondary waste water services
◼ Training services in sewerage treatment sector
Waste water Treatment Solutions for the Palm Oil Industry
As the world’s second largest palm oil producer, the Malaysia palm oil industry, in particular, requires vast resources and capabilities to manage solids and palm oil effluent (POME). Most palm oil mills in Malaysia have adopted the ponding system for the treatment of POME. In general, there are four types of treatment systems adopted by the palm oil industry, which include the use of waste stabilisation ponds, activated sludge systems, closed anaerobic digesters and land application systems. There is a shift in interest from treatment of waste to resource recovery, with various commercial trials and applications underway to convert the solid residual materials into saleable value-added products. With the expected growth of the palm oil sector, industrial waste water technologies will remain in high demand.
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Tertiary Waste Water Treatment Systems and New, Optimised Technical Solutions
Although still largely underdeveloped, the sector for tertiary treatment systems seems promising. Opportunities are growing in tertiary systems as removal of agricultural run-off has presented itself as a treatment challenge. Companies with technological capabilities to deliver these technologies under lower costs may be particularly welcomed in the Malaysian market.
Despite its slow progress in the adoption of new waste water technologies, Malaysia is piquing interest in newer waste water treatment methods. Extended Aeration, Oxidation Ditch, Rotating Biological Contractors, Sequenced Batch Reactors, Trickling Filters, zero discharge and energy efficient treatment systems are being explored for wider application across the country. Other technologies in demand include advanced filtration, anaerobic digestion nitrification, and biological denitrification systems. In addition, waste water reclamation is an attractive option for applications involving non-potable use, such as in agriculture; in industries for cooling systems, boiler feed water, site irrigation, and fire protection; and in municipal use for clearing purposes. This offers opportunities for European companies with technological solutions to export their products into a lucrative, yet still nascent, market.
Efficiency and Reliability Optimisation
Malaysia is keen to improve the efficiency and reliability of waste water treatment. It is actively seeking to improve waste water treatment efficiency and savings via integrated water management solutions, monitoring of water usage, reduction of losses and non-revenue consumption. European companies with expertise in efficiency and productivity optimisation in water and sewage services are particularly welcomed to offer their services in the growing Malaysian market. This shift towards efficiency is also fuelling interest in water efficient consumer products, such as rainwater harvesting systems, smart monitoring and metering equipment, advanced leak detection equipment, non-revenue water control software, low-loss distribution and storage equipment.
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Decentralised Waste Water Systems
Although centralised treatment facilities in urban areas and septic tanks in rural areas remain the primary systems for waste water treatment, there is a growing interest in new, decentralised waste water solutions. These systems sometimes offer benefits over conventional treatment facilities because they reduce the need for energy and large infrastructure, and provide recycled water for use on site.
There is a strong indication that various industry players are eager to implement new, decentralised systems with sustainability concept (resource recovery and re-utilisation on site) at heart. These systems provide opportunities to tap into an emerging market of decentralised waste water treatment solutions, especially for those companies with experience in small-to- medium scale technology implementation.
Secondary Waste Water Services
Because Malaysia utilities favour build-and-transfer (BT) models for project development over alternative ownership models, opportunities for owning water treatment plants are limited. However, provision of expertise in project management, project development, and Engineering, Procurement and Construction (EPC) services offer additional avenues for entry. Further opportunities exist in water accounting, auditing and reporting, and monitoring and testing systems as well as infrastructure solutions, including diversion works, reticulation systems and treatment plant designs.
Training Services in the Sewerage Treatment Sector
In sewerage treatment, the skilled manpower ratio of Indah Water Konsortium (IWK) is approximately 1 per 1,000 connected accounts. The ratio falls below required standards.51 Given the government’s focus on improving the quality of domestic waste water market, companies willing to close the domestic skillset gap are particularly welcomed to offer their services. It also
51 The ideal range is envisaged to be in the order of 1 per 500 to 600 customers for now and this ration should be decreasing over time to get better customer care. Source: Academy of Sciences Malaysia (2015). Water supply and waste water management services in Malaysia
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offers opportunities to gradually expand the service and product offering by building on the expanding network of domestic sector experts.
European Companies
Veolia Water technologies Deutschland GmbH
Headquartered in Bremen, Germany, Veolia Water Technologies (VWT) operates under its parent company, Veolia Water Group. VWT is leading the water supply and treatment technology provision globally. The company specialises in providing the complete range of services to water and waste water treatment facilities and systems, including the design, building, operation, maintenance, upgrading and management services.
Today, Veolia’s Asia Pacific regional headquarters is in Kuala Lumpur. It first ventured into the Malaysian market in 1985. Its offices in Selangor, Johor, Penang and Melaka employ approximately 300 people. While its offices are located in West Malaysia, VWT has also ventured into East Malaysia in late 2011 when the company was commissioned to design, supply and install a Reverse Osmosis/Deionisation (RODI) system for an end user via its project collaboration with Frontken Malaysia Sdn Bhd.
VWT has been engaged in a number of major waste water treatment projects in Malaysia. In January 2017, the company has also been appointed to provide waste water treatment and reclamation plant for the Tun Razak Exchange (TRX) Project in Kuala Lumpur, which is set to be the first fully integrated commercial water reclaim programme in South East Asia. The project will also be one of the company’s most significant global reference points for sustainable development.
It was also awarded a contract to support PETRONAS’ Pengerang Integrated Complex (PIC) in Johor. The contract, which requires the company to provide its expertise in the operations and maintenance of the Refinery and Petrochemical Integrated Development (RAPID) project’s raw water supply project, was signed together with Permodalan Darul Ta’zim (PDT), a Johor state government entity, as its joint venture partner
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Symbiona S.A.
Symbiona is a Polish multinational company with operations in Europe and Asia. The company is headquartered in Warsaw, Poland, and it has offices in the UK, Portugal and Malaysia (Kuala Lumpur). It is a solution provider for biogas, water, waste water and water recycling. To date, the company has completed over 120 projects for municipalities and industries across two continents, focusing on anaerobic and membrane technologies.
It has successfully entered the Malaysian market in 2012 when it participated in the annual trade show, International Greentech & Eco Products Exhibition and Conference (IGEM) in Kuala Lumpur. Its office has been later opened in 2015 and it serves as the regional hub for the company.
EnviDan A.S.
EnviDan is a Danish specialist in waste water treatment. Founded in 1995, the company offers expertise in groundwater studies, water distribution, advanced waste water treatment processes, energy optimisation, biogas, carbon footprint reduction, and water and waste water management technologies. It has offices in Denmark, Sweden and Norway.
With limited opportunities for expansion in Denmark, the company moved into the Malaysian market in 2007 via joint venture with Malaysia-based Darco Water Systems Sdn Bhd, named Darco-EnviDan Sdn Bhd. Darco Water Systems is a subsidiary of Singaporean Darco Water Technologies Limited, which employs over 500 people throughout its regional offices. Aside from Singapore and Malaysia, Darco is also present in China, Taiwan and Vietnam. The purpose of the joint venture is to transfer the Danish waste water technologies to Darco’s operations across Asia. The company is also engaged in surveying for new water sources in order to increase water supply and revenue generated from related infrastructure investments. In Perak, EnviDan located a potential source of 500 million litres of groundwater per day following a survey of 3,000 km2.
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3.4 Water Solutions
3.4.1 Market Overview
Although Malaysia is a water-rich nation, its water sector faces a number of challenges. Among other issues, the country has a number of water-stressed or water-deficit states, deteriorating quality of its water sources, high non-revenue water (NRW), and increasing effects from droughts and floods on its water reservoirs.
Malaysia has placed significant emphasis on managing losses in the distribution systems, through the establishment of district metering areas (DMAs), targeted leak detection, pressure management, systematic pipe replacement and permanent monitoring. However very little has been done on the transmission / trunk main networks. Many local water utilities are now beginning to realise that the lack of upstream pipework has resulted in their condition deteriorating, and to high levels of water loss. Replacement of these large pipes would incur huge costs, therefore management of their leakage levels, system pressures and future condition are imperative.
While the long term strategy to address its issues involves replacing or upgrading ageing infrastructure, Malaysia is increasingly leveraging and benefitting from digital or smart technology. While it does not have an official agenda or framework for smart water solutions, the previous 11th Malaysia Plan for 2016-2020 did spell out projects to be implemented, which included the introduction of new technologies and smart solutions to address inefficiency and insufficiency in capacity, coverage and water resource management.
Water Supply Solutions
The most dynamic players in the water supply sector are seeking to leverage on modern technologies such as cloud, Industrial IoT, artificial intelligence, and augmented and virtual reality to rejuvenate water facilities. Additionally, more academia, experts and industry associations are urging the government to create an integrated water research framework to seek sustainable solutions to Malaysia’s water resources development and management programmes.
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For example, to better manage its fast-growing portfolio of water assets and operators, Pengurusan Aset Air Bhd (PAAB) began exploring the use of Geographic Information System (GIS) technology to develop a web dashboard providing a high-level view of the organisation's operations and asset handling. This includes an inventory of water reservoirs in the country, top and bottom water levels, the year they were built, maintenance updates and other relevant information required for forecasting and decision-making.
Meanwhile, the Natural Resources and Environment Ministry has launched the Environment Quality Monitoring Programme, which is aimed at improving the monitoring of air and water quality. The programme, implemented by Pakar Scieno TW for a period of 14 and half years, involves a cost of MYR 855 million (EUR 175 million).
Figure 16: Pakar Scieno’s River Monitoring System Source: Pakar Scieno Pakar Scieno’s system gathers data on river and sea conditions in real time and stores them in the Data Centre within the Department of Environment headquarters within 10 minutes instead of
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the previous 45-minute transmission speed. Thus equipped, the data centre can carry out forecasting, geospatial mapping and live video streaming, serving as a warning system allowing pro-active action against illegal dumping of toxic wastes, industrial disasters and oil spills.
Water Distribution Services
The area of distribution of drinking water is also facing challenges of inefficiency and insufficiency. The issues revolve particularly around the low quality of the network together with high levels of Non-Revenue Water (NRW), and frequent pipe breakdowns. The distribution network still generally uses old pipes, which often leak, burst and break, thus releasing large amounts of NRW.
2016 2017
System Billed System Billed State Input Authorised NRW Input Authorised NRW Volume Consumption NRW (%) Volume Consumption NRW (%)
(MLD) (MLD) Johor 1,753 1,320 433 24.7 1,826 1,374 452 24.8 Kedah 1,370 719 651 47.5 1,446 745 701 48.5 Kelantan 475 240 234 49.3 491 249 242 49.3 Labuan 71 48 23 32.0 74 51 23 31.6 Melaka 513 413 101 19.6 527 415 112 21.219.6 N.Sembilan 770 519 245 32.6 780 531 249 31.932.6 Pulau Pinang 1,058 826 231 21.9 1,073 840 233 21.721.9 Pahang 1,109 582 528 47.5 1,158 589 569 49.147.5 Perak 1,314 907 406 30.9 1,339 932 407 30.430.9 Perlis 242 89 152 63.1 249 90 159 63.863.1 Selangor 4,842 3,316 1,526 31.5 4,856 3,316 1,540 31.7 Terengganu 613 427 186 30.4 650 425 225 34.6 PENINSULAR MALAYSIA & 16,625 10,77 5,846 35.2 14,469 9,557 4,912 33.933.9 LABUAN Table 10: Non-Revenue Water in Malaysia, 2016-2017 Source: National Water Service Commission (2018) According to the latest data in 2018, Malaysia’s NRW stood at 33.9% (only Peninsular Malaysia and Labuan), although significant regional differences exist. For example, Melaka had an NRW rate of only 19.6% compared to 63.1% in Perlis in 2017. The NRW in Perlis resulted in more than
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89,000 litres of water loss per km of pipeline every day. Seven states such as Johor, Kedah, Kelantan, Melaka, Terengganu, Perlis and Selangor also recorded an increase in NRW. The quality and maintenance of the network is also affected by the usage of old meters, which often result in inaccurate results and NRW.
Air Selangor, the sole water distribution company supplying water to industrial and domestic users in the state of Selangor and the federal territories of Kuala Lumpur and Putrajaya, has adopted digital solutions. It relies heavily on a network of remote telemetry units (RTU) relaying information to their SCADA system to provide real-time monitoring and control of their water distribution network that delivers water to over 2 million customers.
It reduced water loss rates through the installation of sensors on main pipes to enable water pressure monitoring and pressure transient detection. The data obtained by its Intelligent Command Centre (ICC) ensures that pipe repair works are more proactively carried out. Additionally, the SCADA System and Data Logger are also used to monitor the overflow by controlling water levels in 1,601 reservoirs and 731 pump houses. In 2019, the replacement of 318,839 old meters and damaged meters to new meters have succeeded in overcoming the commercial loss caused by inaccurate meter readings.
Air Selangor has allocated MYR 171.63 million (EUR 35 million) in 2020 to carry out programmes for NRW rate reduction and meter replacement works. In addition, it has set aside MYR 144.5 million (EUR 30 million) for replacement of old and burst pipes. The state has managed to reduce NRW from 30.52% in 2018 to 28.73% in 2019.
Sewerage & Waste Water Treatment Solutions
Primary treatment systems such as communal septic tanks and Imhoff tanks and unreliable low- cost secondary systems such as oxidation ponds are used extensively in Malaysia. In addition, large urban areas utilise Individual Septic Tanks (ISTs). It is estimated that there are over a million individual septic tanks in Malaysia. According to SPAN, in 2018, the public and private sewage systems in Malaysia spanned over 20,225 km, and served 30 million people.
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Although the country has evolved over 50 years from the sole use of flush systems and septic tanks to oxidation ditches, biological filter systems and fully mechanised plants, the pour flush systems are still widely used. The Contained Treatment Plants, which are often used as complete treatment systems in Malaysia, can be upgraded with modern technologies. However, the current existing systems are often described as conventional and outdated. The tertiary water treatment process is not widely available and the waste water remains treated primarily up to preliminary, primary and, to some extent, secondary treatment levels.
Nevertheless, there is growing interest in new software-based solutions in waste water treatment, which is key to the digitalisation and automation of water facilities’ operations and management, as well as monitoring of performance and efficiency of plant equipment.
Malaysia has set up the Sewerage Capital Contribution Fund, collecting over MYR 2.18 billion (EUR 446.6 billion) as of December 2018. Between 2011 and 2016, around 45 projects worth MYR 607.9 million (EUR 124.5 million) were approved to improve the sewerage infrastructure.52
In general, Malaysia’s progress in implementing new water solutions has been slow. However, recent policy and some industry developments indicate that new technologies may be on the rise. While the government has shown signs of commitment towards finding efficient and effective solutions for water management, the innovation and implementation of sustainable technologies has been largely driven by the private sector.
This is in line with the relative immaturity of domestic market for water solutions. Malaysia currently imports about 50% of its water technology from abroad with European, Japanese and North American markets occupying the largest market share.
Local Companies
ISME Sdn Bhd is a Malaysian company specialising in measuring instruments for process control applications. Products and services offered by the company include: REMOX® - Remote Monitoring Systems, as well as water and waste water treatment process measuring instruments,
52 www.cprindia.org/sites/default/files/events/M%27sia_FSM_RF_PNN_2019.pdf
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such as flowmeters, sensors, level transmitters and switches, pressure gauges, temperature transmitters and valves; industrial control systems and integrations, among others.
Figure 17: Smart Instrumentation Installed by ISME in Water and Wastewater Projects Source: ISME Sdn Bhd
Cosmos Technology International Berhad (CTIB) is an integrated water technology solutions provider specialising in distributing and servicing Siemens electronic flowmeters, and manufacturing fabricated metal parts for industrial applications used in the water, waste water, and oil and gas industries. In 2018, the company had a market share of 17.7% in Malaysia.
Cosmos currently targets to expand its market reach by introducing water digitalisation solutions to include Siemens Malaysia’s energy-saving solutions which are designed to reduce electricity cost and optimise operations of water and wastewater treatment plants. In particular, the company has started to distribute LACROIX Sofrel’s data loggers to record and store data on water flow. The data loggers also allow operators and authorities to monitor water flow at water treatment plants in real-time, and in industrial and commercial applications. It is installing data logging systems in several test sites, namely Selangor, Perak, Negri Sembilan and Sabah.
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Jalur Cahaya Sdn Bhd (JC) is based in Selangor, and it is one of the few domestic water engineering companies with exclusive focus on NRW management. Among its service scope are the pipe leakages and bursts, under-recording of meters, water thefts, illegal water connections and legal non-metered supply. The company is actively engaged in NRW management in the states of Selangor, Terengganu, Perak, Kuala Lumpur and Putrajaya in West Malaysia, and Labuan and Sarawak in East Malaysia. Most of its clients are water utility companies in the affected states.
Among its services, JC offers solutions in NRW management, audit and consulting The company also partners with a number of other international technology providers to deliver integrated and efficient solutions in NRW management.
3.4.2 EU Entry Opportunities
Opportunities exist for EU players across various areas, such as:
◼ Smart, efficient and sustainable turnkey solutions
◼ Digital solutions in water and waste water services
Smart, Efficient and Sustainable Turnkey Solutions
Whilst the level of Malaysia’s water and waste water treatment technologies remains somewhat low, plenty opportunities are available to export smart, efficient and sustainable turnkey solutions. Water scarcity along with ageing infrastructure and increasing urbanisation are driving the market for smart water metering and other efficiency optimisation technologies. The need to reduce water loses, lessen distribution inefficiencies, and improve water treatment and sanitation facilities are also creating avenues for smart water network technologies. There is a growing demand for smart monitoring and metering equipment, advanced pressure management solutions, advanced leak detection equipment, NRW control software, and low-loss distribution and storage equipment. Given the fact that Malaysia imports 50% of water and waste
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water treatment equipment, European companies can find lucrative export opportunities, which may also serve as a landing pad for the wider ASEAN region.
Solutions in Water and Waste Water Services
Some of the players in the Malaysian water and waste water sub-sectors have embarked on their digital transformation journeys, while others have become more receptive to digitalisation. A survey undertaken by Azman Ali with Malaysian water and wastewater sub-sector players identified their key challenges, as well as potential solutions for them.53
Literature survey on current trend and solution
Challenges Solution Potential Technology Adoption • Water pollution control and detection • Smart Water Grid • High non-revenue water due to leaks, • Leak detection • Advance Metering Infrastructure water theft, and payment defaulter • Theft Detection (AMI) – for Demand Management • Old distribution pipes causing • Rainwater harvesting • Smart Asset/Fleet Management discolouration of treated water • Water quality monitoring Connected Workforce (Process • Old distribution pipes being prone to Digitalisation) damages that cause leaks • Advanced water pipes • Command Centre’s Business • Low water tariff in Malaysia, which is • Water use minimisation Insight & Analytic Dashboard one of the lowest in Asia, unlikely to • Consumer-centric (consumer behaviour, prediction, be reduced in the short term • mobile application prescription) • Compliance (Reporting and data) • Operational Efficiency • Non-Technological (Regulatory • Decentralised Data and overloaded • Data Management Infrastructure and Input, Innovative Business Model, data from multiple unintegrated analytic (from automatic data Consumer’s Behaviour Analytic) systems ingestion, digestion to visualisation and analytic)
Table 11: Mapping Challenges to Solutions Source: Ali, A. (2017). Exploratory Study on Digitalisation of Malaysian Water Services.
A survey undertaken by IDC for Telekom Malaysia54 found that at least 19% of Malaysian utilities started IoT projects in 2017, which included leak detection (19%), predictive underground line services (19%), intelligent grid management (18%) and remote access
53 https://iglus.org/wp-content/uploads/2020/04/Azman-Ali-Exploratory-Study-on-Digitalization-of-Malaysian-Water- Services.pdf#page=40&zoom=100,116,186 54 https://iglus.org/wp-content/uploads/2020/04/Azman-Ali-Exploratory-Study-on-Digitalization-of-Malaysian-Water- Services.pdf#page=40&zoom=100,116,186
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management (19%). Water service operators that were surveyed were also looking into smart meters (32%), digital technologies for equipment health/performance monitoring (55%), drone inspections and exploration (44%) as well as digital tools to connect workers (25%). There is also interest in the area of microgrid/ distributed utility management (36%), as well as connected safety wearables (56%).
It should be noted that while Malaysian operators have skilled personnel with years of experience in traditional water and waste water management approaches, the country lacks a workforce with the relevant skillsets to support a digitalised infrastructure. It thus requires a stronger ecosystem and training support as catalysts for digital adoption.
European Companies
Diehl Metering
Diehl Metering, a corporate division of Germany based Diehl Stiftung GmbH & Co. KG, is an internationally leading developer and supplier of intelligent system and smart meter solutions for the water, thermal energy, gas and electricity sectors. The company provides smart metering solutions from metering to billing through the intelligent networking of various metering devices into larger data platforms that are equipped with the latest technologies for the Internet of Things – NarrowBand IoT (NB-IoT), LoRaWAN and other transmission technologies. In 2018, Diehl Metering launched HYDRUS 2.0, a new generation of innovation ultrasonic water meters that are ready for use with any IoT system, and meets highest international requirements for data protection and data security.
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Diehl Metering has established an office in Singapore, while in Malaysia it has appointed several local companies such as Premier Water Services (PWS), Empayar Setia (ESSB) and George Kent as distributors. In 2019, PWS and ESSB signed an MoU for the distributorship for Diehl water meters in Sarawak. Both companies are working with the Sarawak state government to accelerate the digitisation of the water network in the state under its digital economy initiatives, covering smart city projects and the use of Big Data in management system.
Figure 18: HYDRUS 2.0 Source: Diehl Metering
Grundfos
Headquartered in Denmark, Grundfos is a global leader in advanced pump and water solutions – it has presence in more than 56 countries and employs over 19,000 people worldwide. Grundfos manufactures and supplies a wide range of intelligent pumps, solutions and services designed for commercial buildings, district energy, domestic buildings, industrial processes, utilities, municipal water supply and municipal wastewater. Under its iSOLUTIONS range, Grundfos offers intelligent pumps, cloud connectivity and digital services for application, which enable real-time monitoring, remote control, fault prediction and system optimisation.
The company is currently looking at introducing a technology called the AQtap, an innovative water dispenser that can help to bring water into rural and underdeveloped areas in South East
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Asia region, including Malaysia. AQtap works much like an ATM, and allows its customers to use smart cards to buy water from the ATM.55
Grundfos has more than 50 years of presence in Malaysia since 1965. Its head office is located in the state of Selangor, with branch offices in Penang and Sabah. The company also has professional and domestic pump dealers around Peninsular Malaysia, Sabah, Sarawak and Brunei. As one of the top water solutions providers in Malaysia, Grundfos has participated in many key projects involving flood management, waste water management and water infrastructure with government agencies, private firms, and non- profit organisations.
Figure 19: AQtap solutions Source: Grundfos
Kamstrup
Kamstrup is a frontrunner in IoT solutions for intelligent water metering systems, hosting and services, analytics and smart grid applications. Based in Stilling, Denmark, the company has over 70 years of experience in measuring and managing energy and water consumption worldwide. Its solutions include consumption meters, smart metering systems, hosting and services, analytics and smart grid applications. The Smart Water Metering by Kamstrup is a state-of-the- art ultrasonic water meter offering remote reading solutions, advanced monitoring of pressure and leakages, as well as intelligent data analytics.
55 www.malaymail.com/news/life/2019/04/24/water-atm-may-make-debut-in-malaysia/1746421
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In 2019, the company registered Kamstrup Asia Pacific Sdn Bhd in Malaysia, which is its APAC Regional headquarters. Its Malaysian entity provides smart metering solutions for many public and private clients in the country and regionally, including Boustead Holdings Berhad for one of its largest premier shopping malls, MyTOWN in Kuala Lumpur.
Figure 20: flowIQ® 2200 Source: Kamstrup
Tethys Instruments
Founded in 2002, Tethys Instruments SAS is a leading French provider of water on-line analysers for environmental applications. The company’s technology is based on UV spectroscopy, offering a high degree of reliability and very low operating cost. Tethys Instruments’ products are sold in Malaysia through the local distributor Arachem Sdn Bhd.
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3.5 Air Pollution Control
3.5.1 Market Overview
Malaysia, a fast developing nation, has had to contend with increasing air pollution. The Air Pollution Control market is still nascent, but high environmental concerns, including strict regulatory enforcement and public concern, point to significant entry and growth opportunities for European companies. Until relatively recently, air pollution was not regarded as a significant problem in Malaysia. Compared with other cities in Asia, air quality in Malaysian cities was considered to be fairly good. Malaysia still enjoys good to moderate air quality overall, as indicated by the Air Pollution Index.56
Figure 21: Air Quality in South East Asia Source: The 2019 World Air Quality Report57
56 http://apims.doe.gov.my/public_v2/api_table.html 57 www.iqair.com/blog/report-over-90-percent-of-global-population-breathes-dangerously-polluted-air
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However massive infrastructural changes, rapid industrialisation and urbanisation, agricultural activities, tourism, and export activities have made the air quality resurface as a significant concern in some parts of the country. Cities and industrial zones, such as Selangor, Johor, Klang Valley, Seberang Perai in Pulau Pinang, and parts of Sarawak, suffer from increased concentrations of harmful emissions.
For Malaysia as a whole, activities that contribute to air pollution range from land transportation to industrial production and open burning activities. Major industries affecting air quality are: iron and steel, nonferrous metal, non-metallic (mineral), oil and gas, petrochemical, rubber and palm oil, and pulp and paper industries, as well as power plants and waste incineration. Emissions from stationary sources generally contribute to 20-25% of air pollution annually, while open burning and forest fires account for approximately 3-5%.58
It is interesting to highlight that the country’s imports of apparatus for gas and smoke analysis have registered a remarkable growth in value, from USD 25 million (EUR 21.9 million) in 2015 to USD 33 million (EUR 28.8 million) in 2019. Importantly, Germany ranked as the 3rd most important exporter of the technology to Malaysia in 2019, but other EU countries such as Italy and France are among the top 10 suppliers.
Land Transportation
Satellite spectrometry data shows a dramatic reduction in NO2 levels in Malaysia’s skies during the Covid-19 lockdown period, especially over Kuala Lumpur and Johor Bahru due to the dip in the use of motorised vehicles. According to Think City’s analytics department, around 80% of the gas is emitted from motor vehicle exhaust fumes.59
58 www.hindawi.com/journals/jeph/2020/1561823/ 59 www.nst.com.my/news/nation/2020/04/584637/blue-skies-and-pristine-air-mco
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Figure 22: Satellite Spectrometry Data showing Nitrogen Dioxide Levels in Malaysia’s Skies Source: Think City
Meanwhile the BP Statistical Review of World Energy 2019 found that Malaysia’s CO2 emissions amounted to 250.3 million tonnes in 2018, up from 241.6 million tonnes in 2017. The main sources of the emissions were electricity consumption, motor vehicles and municipal solid waste that ends up in landfills.
With the growing vehicle fleet and the urban society’s preference for private motorised travel, air pollution caused by motorised travel is becoming a major concern for Malaysia. According to Road Transport Department (JPJ) data, there are 31.2 million units of motor vehicles (cars, commercial vehicles and motorcycles) registered in Malaysia as of 31 December 2019, an increase of 1.24 million over the previous year. This translates to nearly one motor vehicle per person.60
60 https://paultan.org/2020/04/02/vehicles-registrations-in-malaysia-31-2-mil-as-of- 2019/#:~:text=Vehicles%20registrations%20in%20Malaysia%20%E2%80%93%2031.2,last%20year%2C%20as%20Bernama%20reports.
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Figure 23: Malaysia’s Green Targets for Transportation Sector Source: Green Technology Master Plan Malaysia 2017
As the nation continues to develop, it is critical for Malaysia to have an overarching transport policy that takes into account sustainability. Drafted since 2016 and released in 2019, the Malaysian National Transport Policy (NTP) 2019-2030 sets action items to reduce emission of greenhouse gas, black smoke and other pollutants from the transport sector, as part of its move towards a greener transport ecosystem.61
61 www.pmo.gov.my/wp-content/uploads/2019/10/National-Transport-Policy-2019_2030EN.pdf
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Transboundary Haze
Figure 24: Transboundary Haze in Malaysia in September 2019 Source: Malay Mail (2019)
In addition to localised air pollution issues, “transboundary haze” is also an annual problem that is especially prevalent during the drier summer months, when monsoon winds blow smoke from slash-and-burn land-clearing for palm oil production in Indonesia (Sumatra and Kalimantan) across the Strait of Malacca to Malaysia and Singapore. In the past decade, numerous incidences of transboundary haze have led to shut down of schools and airports, with citizens advised to stay indoors. In 2019, haze smog settled over Malaysia for most of September, with many areas recording unhealthy air pollution levels. Nearly 2,500 schools were ordered to suspend classes - including nearly 300 in the smog-hit capital of Kuala Lumpur.62
International cooperation has been sought to strengthen and develop policies to control forest fires and open burning. The ASEAN Agreement on Transboundary Haze Pollution was initiated
62www.aljazeera.com/news/2019/09/190919064841354.html
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in 2002 and ratified by all ASEAN members as of 2014; however, at this time, there is no enforcement mechanism in place as yet.
On a national scale, Malaysia expects to take legal action against companies or individuals responsible for transboundary haze pollution, following its Cabinet’s approval to enact a haze bill. Malaysia’s Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) is drafting the contents, which emphasise precautionary, preventive, and punitive elements to curb future incidents.63 The act if approved will make Malaysia become the second country in South East Asia to observe a Transboundary Pollution Act, after Singapore.64
Figure 25: Transboundary Haze Impact on Malaysia Source: ucsusa.org
Air Quality Monitoring
In 1995, the Department of Environment (DoE) awarded a concession to Alam Sekitar Malaysia Sdn Bhd (ASMA) for the establishment and management of the National Environmental Data Centre (EDC) as well as the collection, processing, interpretation, analysis, and dissemination of environmental data. Today, ASMA operates, manages and maintains 52 continuous air quality
63 www.nst.com.my/news/nation/2020/02/567710/malaysia-can-take-legal-action-over-transboundary-haze-pollution-soon 64 www.malaymail.com/news/malaysia/2019/09/27/singapore-welcomes-malaysias-efforts-on-transboundary-haze-legislation/1794790
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monitoring (CAQM) stations and 19 manual air quality monitoring (MAQM) stations nationwide. ASMA CAQM stations are designed to continuously measure ambient air for gaseous pollutants (SO2, NO2, O3, CO, HC), particulate matters (PM10 & PM2.5) and a few meteorological parameters (Wind Speed, Wind Direction, UVB and Temperature).65
ASMA works as a data centre and provides predictive and continuous emission monitoring systems (PEMS/CEMS), environmental consulting and air quality management services to the Malaysian government. The air quality monitoring network has become one of the most successful air quality monitoring programmes in the developing world. The average data capture rate66 has been more than 95% and passed an audit by the United States Environmental Protection Agency.
Measures to Address Air Pollution
Given the growing public concern, the Malaysian government has taken several measures to abate air pollution, including the implementation of emissions standards, inspection and maintenance standards, and stricter penalties for non-compliance with the environmental laws.
Malaysia is one of the few Asian countries to have started early in addressing emissions from mobile sources. In 1977, the Government enacted the Motor Vehicle (Control of Smoke and Gas Emissions) Rules as part of the Road Traffic Ordinance of 1958. Regulations have since been in place for both petrol and diesel vehicles under the Environmental Quality Acts that came into force in 1996. Malaysia further adopted Euro 1 emissions standards for new light-duty vehicles in 1997 and Euro 2 standards for gasoline vehicles in 2000. It now has plans to introduce Euro 2 and Euro 3 standards for diesel and gasoline vehicles, respectively. Though the Government has
65 www.enviromalaysia.com.my/services-airquality.html 66 Data Capture Rate is a frequently used measure to identify the reliability of the monitoring systems. It is expressed as a percentage and is specifically calculated as the number of creditable samples for the time period divided by the number of scheduled samples for the same time period, with the result then multiplied by 100 and rounded to the nearest integer.
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actively pursued stricter vehicle emissions standards, the move towards the use of higher-quality fuels has not been similarly aggressive – the current fuel quality standard is still at Euro 1 levels.67
The government is also taking steps to regulate vehicular emissions through changes to its Motor Vehicle Regulations. For example, the Malaysian Government approved regulations to mandate the use of catalytic converters in new vehicles in 2007. These regulations also call for the establishment of vehicular monitoring stations operated by licensed firms.
To counter the industry’s attitude towards polluting, the environmental regulations for atmospheric pollutants are becoming more stringent as well. Air quality is now regulated by the Environment Quality Act (Clean Air) 2014 and by the New Ambient Air Quality Standard (2013). The 2013 Standard updates the 1989 Standard by adding PM 2.5 to the list of covered criteria pollutants, which also includes PM 10, nitrogen oxides, sulphur oxides, carbon monoxide and ground-level ozone. According to the government’s 11th Malaysia Plan (2016-2020), air quality standards must be refined and localised emissions and open burning activities must be controlled in order to mitigate air pollution. The government also publishes names of the polluting manufacturers in the newspapers to increase pressure for the industries to adopt air pollution control systems. Malaysia’s Ministry of Natural Resources and Environment (NRE) is responsible for specifying conditions for emission, discharge or deposit of environmentally hazardous substances, pollutants or wastes into any area, segment or element of the environment.68
Finally, the Government of Malaysia is also aware of the country’s vulnerability to climate change. Malaysia’s recent climate goals include reducing its greenhouse gas emissions intensity by 35% based on GDP by 2030, with the possibility of increasing to 45% upon receipt of financial and technical assistance from other countries, as indicated in its Nationally Determined Contribution under the December 2015 United Nations Framework Convention on Climate Change (UNFCCC) Paris Climate Agreement.
67 Euro Standards (full name European Emission Standards) define the acceptable limits for exhaust emissions of new vehicles sold in EU and EEA member states. The emission standards are defined in a series of European Union directives staging the progressive introduction of increasingly stringent standards. Malaysia is striving to adopt the same standards as the members of the EU. The standards are introduced from the least restrictive Euro 1 to currently the most stringent Euro 6. 68 11th Malaysia Plan (2015). Sustainable Usage of Energy to Support Growth. Putrajaya, Malaysia: Federal Government Administrative Centre.
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As a result of these new climate-related targets, rapid economic and industrial growth, increasing urbanisation and motorisation, and stringent regulations for emissions, providers of air quality monitoring, and emissions inventory expertise are becoming increasingly in demand in the Malaysian market. Due to the increasing size of the market, opportunities in air pollution control should register continued growth in the coming years.
Local Companies
Alam Sekitar Malaysia Sdn Bhd (ASMA) is based in Shah Alam and has offices in Pulau Pinang, Johor Darul Ta’zim, Pahang Darul Makmur and Selangor Darul Ehsan. Aside from Malaysia, ASMA has operations in Saudi Arabia, Sudan, Qatar, Indonesia and Singapore. ASMA is responsible for operating and maintaining Malaysia’s air quality network. The company was incorporated in 1993, a subsidiary of Progressive Impact Corp. Bhd. that provides total environmental solutions to clients ranging from governments (local authorities, states and federal governments) to industries, research institutions and private individuals.
ASMA obtained a a 20-year concession from the Department of Environment (DoE) in 1995. The concession included the establishment and management of the National Environmental Data Centre (EDC) as well as the collection, processing, interpretation, analysis, and dissemination of environmental data. Today the company is responsible for operating and maintaining 52 continuous air quality monitoring (CAQM) stations and 19 manual air quality monitoring (MAQM) stations in Malaysia. The company functions as a data centre providing emission monitoring (PEMS/CEMS), environmental consulting and air quality management services.
Malaysia’s air quality monitoring network has established itself as one one of the most successful in the developing world, with average data capture rate higher than 95%. It also passed an audit by the United States Environmental Protection Agency.
While ASMA began as a company that focuses on environmental monitoring, it has evolved since into a one-stop centre that offers a wide range of services and products in servicing environmental needs of both the public and private sectors.
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Master Jaya Group is a Malaysian engineering, consulting, contracting, manufacturing, sales and services company. Established in 1983, the company specialises in total turnkey solutions for Air Pollution Control and Industrial Air Handling systems.
With over 30 years of practical experience and a track record of over 1,000 projects, it has designed, manufactured, installed, commissioned and serviced air pollution control and industrial ventilation installations all over Malaysia and ASEAN countries.
The company started in a factory on a 150 m2 site in Puchong. In 2000, it moved to the current 1,115m2 factory in Taming Jaya Industrial Park, Seri Kembangan. In 2008, Master Jaya Group added an additional factory, worth MYR 4 million (EUR 819,507), in Arab Malaysian Industrial Park, Nilai, Negeri Sembilan. The company also started exporting parts of its systems in 2000 as an original equipment manufacturer (OEM). It currently exports to Singapore, Indonesia, Thailand, Vietnam, Russia and parts of Africa.
The company started with 1 employee. Today, it has 60 staff and deals with complex projects in almost all industries, including manufacturing, mining, and oil and gas.
The value of projects handled by Master Jaya Group ranges from MYR 50,000 (EUR 10,244) for a simple dust capture mechanism to MYR 6 million (EUR 1.2 million) for a complex system used by incinerators and the semiconductor industry.
The Malaysian MayAir Group Plc (MayAir) is one of the market leaders in providing air purification solutions. Through its subsidiaries, MayAir develops, manufactures, and distributes clean air products, equipment, air filters, and related technical services for industrial, commercial, and residential markets in Malaysia and internationally.
Established in 2001, and operating from its headquarters in Seri Kembangan, the company offers industrial clean air solutions for businesses requiring cleanrooms as part of their own manufacturing processes, including technology companies, semiconductor manufacturers, pharmaceutical companies, hospitals, and food and beverage firms.
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Since 2011, the Group has begun to diversify its product offering, increasingly implementing its strategy of expanding its business to include indoor clean air solutions for the commercial and residential markets. Its commercial clean air solutions provide air filtration equipment to venues such as office buildings, airports, subways, schools and hotels. The residential division targets property developers with unique clean air solutions.
The company is currently the second largest provider of air purification systems in China. Its flagship projects are the Galaxy SOHO building, Shanghai airport and Beijing subway. The company has also supplied large multinational manufacturers such as OSRAM, Sony, York, SanDisk and Huawei with industrial cleanrooms and other air purification systems.
In 2016, MayAir received a prestigious Bluetech Award from Clean Air Alliance, which recognises the best international air pollution prevention and control technologies.
The company went public on the London Stock Exchange in 2015. It has an extensive IP portfolio, is ISO certified for quality management systems (9001:2008) and environment (14001:2004). Its products are certified by CE (European Union) and UL (Underwriters Laboratories, an American worldwide safety consulting and certification company).
3.5.2 EU Entry Opportunities
The Malaysian air pollution control market is growing but domestic manufacturers are unable to meet an increased demand. The public outcry for stricter environmental regulation and enforcement is also pushing Malaysia to adopt better technological solutions, thus driving market growth. As a result, European companies may find interesting opportunities in the air pollution control sub-sector:
◼ Air pollution control technologies
◼ Clean incineration systems
◼ Environmental auditing and management systems
◼ Vehicular emissions control technologies
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◼ Emissions control in energy sector
◼ Third-party treatment services
Air Pollution Control Technologies
Malaysia’s recent climate goals include reducing its greenhouse gas (GHG) emissions intensity by 35%, based on GDP by 2030. Since most air pollution control equipment is imported, the demand to reduce GHG and control air pollution creates lucrative entry points for qualified European businesses.
According to government reports, key technologies in demand are: continuous emissions monitoring (CEM) equipment, stack emission analysis technologies, indoor air pollution control equipment, ambient air quality monitoring equipment; source emission measurement technologies; dry sorbent injection technologies; flue gas desulphurisation equipment; activated carbon injection technologies; inspection, adjustment, maintenance and repair services; selective catalytic reduction technologies; selective non-catalytic controls; and urea to ammonia reagent systems.
Clean Incineration Systems
Another potential entry point for European companies is via clean incineration systems. Open burning of waste is still routinely carried out at over 200 solid waste disposal sites across the country. With a renewed interest in the country for air pollution control, commercial opportunities exist to provide clean technologies for waste disposal sites. Methane and other gas emissions capture, storage and re-utilisation technologies are growing in demand.
Environmental Auditing and Management Systems
Environmental auditing and management systems, as a requirement of ISO 14000, are also generating much interest from Malaysian export companies, which are eager to maintain their competitive edge in the global market. A new amendment to the Environmental Quality Act has mandated polluting companies to carry out environmental audits of their environmental
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performance by DoE-approved consultants. These audits are also required to be verified by an external body. However, environmental auditing, management systems and impact assessment capabilities are still low in Malaysia. Opportunities are available for highly skilled European engineering and consulting companies to provide technical support and equipment in those fields. Risk analysis, the new requirement for Environmental Impact Assessment (EIA) associated with petroleum and chemical industries, is already being prepared by foreign companies - a new development, which is largely attributed to the scarcity of skilled in-country personnel.
Vehicular Emissions Control Technologies
The Government of Malaysia is also aiming to reduce the footprint from vehicular emissions. Motor Vehicles Regulations already mandate the use of catalytic converters in new vehicles. The DoE is also interested in privatising all of its monitoring activities so it can focus efforts on environmental enforcement. As a result, there are opportunities for commercial players to provide vehicular emissions control and monitoring equipment across the full spectrum of the transport sector. Provision of engineering and production capabilities for conversion technologies and improved tailpipe emissions systems are the areas in demand. Vehicular emissions monitoring and inspection also remain important entry points for European companies with expertise in air pollution monitoring.
Emissions Control in Energy Sector
Opportunities for European companies also exist in the energy segment, which has a strategic importance for Malaysia’s economy and it makes up almost 20% of the total GDP.69 Within South East Asia, Malaysia is the second-largest exporter of natural gas and the second-largest oil and gas producer. The Malaysian government is also promoting a shift away from country’s heavy reliance on natural gas and oil for electric power generation, and towards a greater use of coal as a source of electricity. With energy consumption increasing, and a growing emphasis on environmental protection, appropriate control technologies will need to be put in place to limit and
69 www.bmcc.org.my/images/uploads/obni_pdf/Oil%2C_Gas__Energy_Sector_Report_2017.pdf
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control air pollution. Companies with expertise and experience in air pollution control technologies in power generation may find increasing demand for their services.
New and improved air pollution control systems and equipment with enhanced reliability and reduced power consumption, i.e. optimised wet processes that have higher desulphurisation efficiency and improved limestone injection, are already gaining greater attention in the region.70
Third-Party Treatment Services
In addition to supplying and servicing equipment and facilities, there is an emerging opportunity for third-party treatment companies to serve as a bridge between private enterprises and the government, especially in the face of intense pressure to meet emissions standards within a limited timeframe and the scattered nature of pollution producers. Specialised third-party treatment companies that are able to keep their costs competitive should consider offering centralised supervisory services to government bodies, accessing a market with tremendous opportunities.
European Companies
Chemisch Thermische Prozesstechnik GmbH (CTP)
CTP is one of the world’s leading companies in industrial air pollution control. The company develops, manufactures, and supplies industrial air pollution control systems and equipment.
CTP offers oxidation, reduction and absorption systems as well as equipment, including wet gas scrubbing equipment for the removal of inorganic components; air filtration equipment, such as mechanical-thermal filters for the removal of sticky particulates and aerosols; and fabric filters for the removal of non-sticky particulates. In addition, it offers components, including burners,
70 For example, GE’s Steam Power Systems engineered and supplied key equipment for the Malakoff Corp. Berhad’s 1,000 MW Tanjung Bin Energy power plant. The emissions at the plant are now reduced through the use of low NOx burners, a highly efficient seawater flue gas desulphurisation facility and fabric filters to lower nitrous oxide, sulphur oxide and dust emissions. Melaka refinery complex has also installed catalytic crackers, hydrocrackers and desulphurisation units. Some companies, such as Japanese Satake, have also already introduced these types of technologies to the Malaysian market via sales offices in the country. Sources: https://www.turbomachinerymag.com/ge-steam- turbine-technology-powers-1000mw-plant-in-malaysia/, http://www.satakemalaysia.com/index.php?ws=pages&pages_id=9154 & UBP (2007). Malaysia Country Study Guide.
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smoothing bed, and valves; and services, such as pre-engineering, piloting, project management, and after sales services.
The company’s systems are used for Volatile Organic Compounds (VOC) control, greenhouse gas control, odour abatement, and hazardous air pollutants removal application, as well as for the reduction of nitrogen oxide, ammonia, hydrogen sulphide or carbon monoxide.
CTP serves automotive and vehicle engineering, building materials, cement and lime, chemical and petrochemical, coating and printing, consumer goods, electronics and electrical, energy and resources, food, forest products, metal and mining, oil and gas, pharmaceutical, and recycling and waste management industries.
The company was founded in 1985 in Graz, Austria. It now has licenses in Australia and Japan; subsidiaries in France, Korea, Spain, and Sweden; and sales partners in Belgium, Finland, Italy, the Netherlands, Portugal, Slovenia, Egypt, Israel, South Africa, and Malaysia. It is Austria’s leading supplier of integrated air pollution control solutions with an export rate of about 95%. In Malaysia, it distributes its equipment via a network of sales partners.
Advanced Cyclone Systems S.A. (ACS)
ACS is a Portuguese company exclusively dedicated to the development and commercialisation of high efficiency cyclone systems. Apart from supplying cyclones,71 ACS has grown to be a turnkey project provider. Its technologies are used for particulate matter (PM) emission control in boilers, furnaces and dryers as well as product recovery in chemical, food and pharmaceutical industries.
Founded in 2008, the company has fulfilled over 100 successful installations in 26 countries. The number of projects has duplicated each year.
71 Cyclone technology uses a method of removing particulates from an air, gas or liquid stream, without the use of filters, through vortex separation.
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Malaysia is ACS’s fastest growing market in the biomass combustion area, namely for emission control in the palm oil industry. The company is already working on 4 projects to reduce emissions in boilers ranging from 28 ton/h to 40 ton/h for clients, such as Kulim and Tradewinds.
In 2015, the company deployed their Recyclone MH technology for Kulim in Pasir Panjang to reduce particulate matter from a biomass burning mixture of mesocarp palm kernel and fibre. In the same year, Recyclone MH technology was deployed in Miri in East Malaysia, for Tradewinds, to reduce particulate matter from a biomass boiler burning mixture of mesocarp fibre and palm shell. The successful installation of Recyclone MH technology has led ACS to further contracts for Tradewinds, such as the installation of the Hurricane Cyclone System in Kuala Suai Palm oil mill, in Bintulu, Sarawak. ACS is in the process of supplying three new systems for other plants across Malaysia.
In 2016, ACS also signed an agreement with the Malaysian Palm Oil Board (MPOB) on the divulgation and information of ReCyclone systems as a solution to reduce PM emissions under the new imposed environmental limits. ACS and MPOB, supported by O’rec Industries, are building a demonstration plant in Sindora Berhad Palm Oil Mill in Johor Bahru to promote Cyclone technologies as a sustainable solution for PM emission control.
The Global Camfil Group
The Global Camfil Group was founded in Sweden in 1963. The Group is the world’s largest and leading manufacturer of industrial air filters and clean air solutions. The company serves four main segments: Comfort Air, Clean Processes, Power Systems, and Safety & Protection. It provides air filtration products and services via its four main business units: filters, power systems, air pollution control, and airborne molecular contamination (AMC). Camfil’s products can be found in all major industries, including electronics, mines, factories, hospitals, nuclear power stations, and oil & gas facilities.
The company established its first production plant in Malaysia in 1997, in Ipoh, via its Malaysian subsidiary, Camfil Air Filter Sdn. Bhd. The plant in Ipoh is equipped with the latest technology and it is rated as one of the best production facilities in the Camfil Farr Group. In 2000, the company
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acquired Farr in the US and QF Filters, a small Farr joint venture company based in Kuala Lumpur. Both companies, together with parallel distribution channels, were added to the Malaysian operations and incorporated fully in 2003. After the semiconductor boom of 2004, the Group opened direct sales offices in Kuala Lumpur and Penang to provide better support to local customers. Since then, the company has continued to grow as the manufacturing, supply and technical support centre for Asia.
Some of its flagship projects in Malaysia are: supply of air filter systems, training, maintenance and system audits for the Petronas Towers in Kuala Lumpur; and gas turbine filtration systems to GE Oil & Gas for its delivery of generator systems and gas turbines to the Petronas Floating Liquified Natural Gas (FLNG) project, the world’s first floating liquefaction unit in operation.
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3.6 Waste Management
3.6.1 Market Overview
In 2018, Malaysians generated 38,142 tonnes of waste per day, an increase from 19,000 tonnes of waste a day in 2005.72 Given that solid waste generation is projected to grow to 49,670 tonnes a day by 2030,73 there are significant opportunities for European companies in this sub-sector.
The main waste generator is the urban population, which makes up more than 74% of the total population. Municipal waste accounts for 64% of the total collected waste. The remainder consists of industrial, commercial and construction waste. Food waste and plastics make up a significant proportion of the country’s municipal solid waste.
Figure 26: Composition of Municipal Solid Waste Source: Ministry of Housing and Local Government
72 www.thestar.com.my/news/nation/2019/07/30/generating-more-waste-than-ever 73 www.mdpi.com/2227-9717/7/10/676/htm
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Currently, the average per capita generation of municipal waste is approximately 1.17 kg/person/day, up from 0.8 kg per person per day in 2005.74 Major cities, such as Kuala Lumpur, has an average generation rate of 1.35 kg/person/day. Approximately 89% of municipal solid waste is landfilled, without treatment or any waste-to-energy applications.75
Progress in Solid Waste Management
Municipal solid waste management falls under the purview of both the Federal and State Government. At the Federal level, the National Solid Waste Management Department (JPSPN) develops solid waste and public cleansing policies and strategies, action plans, and formulates the necessary legislative measures to support management.
Figure 27: Transformation of Solid Waste Management in Malaysia Source: Ministry of Housing and Local Government
74 www.thestar.com.my/news/nation/2019/07/30/generating-more-waste-than-ever 75 ibid
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Local municipal and district governments are responsible for municipal solid waste (MSW) management in Malaysia, including collection, transportation, treatment and final disposal, while state governments are charged with siting landfills and treatment facilities. The system was partially privatised in the mid-1990s to help alleviate the financial burden on various localities. Partial privatisation created opportunities for growth and specialisation of private service providers to complement those services provided by the public sector. In 2007, the Act 672 has also bestowed the authority for solid waste management and the monitoring of local privatisation activities upon the Solid Waste and Public Cleansing Management Corporation, also known as SWCorp.
In 2011, the Malaysian Government approved concession agreements with three companies for a 22-year period, to enable them to make large-scale investments in the latest technology, equipment, and skilled workforce. The three concessionaire companies are:
◼ Alam Flora Sdn Bhd, tasked with managing the central and eastern zones, including the Federal Territory of Kuala Lumpur, Putrajaya, Pahang, Terengganu and Kelantan
◼ SWM Environment Sdn Bhd, tasked with managing the southern zone covering Johor, Melaka and Negeri Sembilan; and
◼ Environment Idaman Sdn Bhd, responsible for managing the northern zones of Kedah and Perlis.76
With the concession agreements, the companies have been able to increase the number of compactors, other machinery, trained workforce and the available number of waste bins. It is important to note that technology for waste separation, sorting, processing, and recycling is still limited, or not available domestically. For example, about 90% of recycled paper products are imported from abroad due to limited technological systems to process waste paper and produce secondary, recycled paper products.
76 https://waste-management-world.com/a/waste-management-privatised-in-malaysia
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In 2018, the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) launched a ‘Roadmap Towards Zero Single-Use Plastic 2018-2030’. The vision of this Roadmap is to take a phased, evidence-based and holistic approach by involving all stakeholders in jointly addressing single-use plastics pollution in Malaysia. Phase 1 of the Roadmap included a nationwide charge on plastic bags and to only serve plastic straws upon customer request. The year 2020 would kick off with a nationwide ban on plastic drinking straws. All these steps are a push in the right direction in achieving the vision of abolishing single-use plastic by 2030. Going forward, in Phase 2 of the Roadmap (which spans from 2022-2025) MESTECC plans to significantly increase the expansion scope of biodegradable and compostable plastic products for local use by providing R&D funding on alternative eco-friendly products.77
Waste Management Practices
Landfilling remains the ultimate waste disposal method in Malaysia. Most landfills are small-scale and non-sanitary, and are often open dumping sites which rely mainly on a natural clay lining. Furthermore, there is no proper infrastructure for the collection of landfill gas and leachate.
Figure 28: Open Dumping in Malaysia Source: The Star
77 www.ipsos.com/en-my/last-straw-discouraging-single-use-plastic
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Currently, there are 21 sanitary landfills across the country. Some sanitary landfills (Air Hitam, Bukit Tagar, Jeram, and Seelong, among others) have been engineered to collect and harness methane gas generated from biodegradable contents within the waste cells for electricity production under the FiT scheme.
According to the Ministry of Housing and Local Government, 150 landfills are in operation, with 74 of these sites (49%) of them expected to reach the end of their lifespan by the end of 2020. As of end of the end of 2018, a total of 165 landfill sites ceased operations. A number of open dumping landfills are expected to reach full capacity by 2030 and will be shut down by the government.
Illegal dumping is highly prevalent in Malaysia – in Kuala Lumpur alone, the government spends approximately MYR 200,000 (EUR 41 million) a month to clear illegal dumping sites.
The country is utilising incineration technologies in several sites. Incineration has gained popularity for disposal of municipal, clinical and hazardous waste. As of 2019, Malaysia had four small-scale incinerators (which do not employ WTE technologies) and one active refuse-derived fuel (RDF) WTE plant in Kajang. Built in 2009, the plant has the capacity to process approximately 1,100 tonnes of municipal solid waste a day and produce approximately 8 MW of electricity daily.
Figure 29: A Small-scale Incinerator in Cameron Highlands
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The Ministry of Housing and Local Government has a public-private partnership project with Cypark Resources Bhd to develop Malaysia’s first WTE plant in Port Dickson, Negri Sembilan, for the final processing of unrecyclable plastic waste and other types of waste. Known as SMART, or Solid Waste Modular Advanced Recovery and Treatment WTE, the plant would be able to undertake 600 tonnes of mechanically segregated and processed municipal solid waste per day, producing 20 MW to 25 MW of green energy which is enough to power about 25,000 households within its vicinity. The project was initially targeted for completion in January 2018 but has faced numerous delays. When operational, this first WTE facility should be the impetus for other states to develop their own WTE facilities.78
In July 2020, the ministry announced its goal to have at least six WTE plants built nationwide by 2021.79 As a pilot, the state government of Melaka plans to build a MYR 3.6 million (EUR 737,556) WTE plant on a 3.84-hectare site to address the problem of waste disposal in the state. The WTE facility is expected to receive 1,000 tonnes of solid waste daily and be capable of producing up to 25 MW of energy to provide electricity to 25,000 households in the area.
Additionally, a WTE plant has recently been proposed at the Jeram Integrated Solid Waste Management Centre in Mukim Jeram in Selangor. The proposed project is a 1,200 tonne per day capacity moving grate incinerator located next to the existing Jeram Sanitary Landfill.
In terms of the disposal of hazardous waste, Malaysia currently has only one integrated hazardous waste management centre, Kualiti Alam Waste Management Centre (KAWMC). The centre holds the licence to handle 76 out of 77 categories of scheduled wastes listed under Environmental Quality (Scheduled Wastes) Regulation 2005. The KAWMC facilities have the capacity to sort, treat and dispose of more than 100,000 tonnes of all classes of hazardous waste, annually. The end-to-end facilities comprise an incineration plant, a physical/chemical treatment (PCT) plant, solidification plants, secured landfills and a clinical waste treatment centre. KAWMC also operates Malaysia’s first non-incineration clinical waste treatment centre.
78 http://mpma.org.my/v4/wp-content/uploads/2019/09/White-Paper-FINALR.pdf 79 www.malaymail.com/news/malaysia/2020/07/03/govt-targets-six-waste-to-energy-plants-by-2021-says-minister/1881154
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Waste-To-Energy (WTE) Project Development and Management
The Government of Malaysia is increasingly seeking to incentivise local and international companies to assist the waste management sector to develop WTE programmes in order to re- utilise waste for other uses. As a result, Malaysia is currently encouraging the diversion from landfills towards more productive uses of waste. It is expected that these initiatives will be driven primarily by the private sector, thus, opening up a significant waste management sub-sector for European companies. Several industry players are already tapping into this market segment. For example, Green & Smart Sdn Bhd is tapping into the waste recycling market by providing green, waste-to-energy solutions for industries in the Malaysian agricultural sector. Its solutions aim to recycle the sector waste for productive re-utilisation and optimisation of palm oil sector by- products.
With the current 21 sanitary landfills, the Malaysian government is close to achieving its target to have 23 sanitary landfills at the end 2020 – this was one of the milestones outlined in its Green Technology Masterplan 2017-2030.
Figure 30: Waste Treatment and Disposal in Malaysia Source: Green Technology Masterplan 2017-2030
The country’s longer term development plans will be tabled in the 12th Malaysia Plan (2021-2026), and will continue to emphasise environmental sustainability in the area of solid waste management.
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Local Companies
Established in 2014, Sulomas Sdn Bhd is an exclusive partner and distributor of SULO Germany and the French Plastic Omnium products in Malaysian and Indonesian markets. Sulomas provides professional consultation and project management solutions in the waste field, including planning and deployment of Underground Systems (UGS) to clients in both private and public sectors. Sulomas also provides services to small and large industries as well as commercial and residential buildings.
The company equips its wheeled bins and its locally manufactured recycling bins with high tech solutions, which are unique in the Malaysian waste management sector. Among its technological portfolio, Sulomas uses Radio Frequency Identification (RFID), OPTI Access, a smart access control system, and OPTI Fill, a remote volume-monitoring tool. Through its parent company, Writebest, Sulomas has branch offices and an extensive dealer network across Malaysia.
Crudesco Sdn Bhd, which was founded in 2003, is focused on waste management, water solutions and safety products. The company is involved in all stages of the solid waste value chain, from solid waste collection to transportation and waste disposal. Crudesco’s core business is the promotion of the usage of tunnel composting technology. It has strategic cooperation partnerships with European companies to introduce alternative solutions for waste management and disposal to Malaysian market, known as Mol® underground waste collection container system. The system can be used for different types of collection, including household waste, commercial waste and glass collection.
In addition to the core business lines, the company is also active in trading products, such as oxygenated drinking water, compost and recyclables. While providing services globally, Crudesco has its main office in Malaysia, which services its key target market – South East Asia. The company has additional offices in Kuwait and Saudi Arabia, which target the Middle Eastern markets.
STREAM Environment was founded in 1991 and is among a few players in the waste management sector that provides Automated Waste Collection Systems (AWCS) in Malaysia.
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The company undertakes design, engineering, supply and installation of AWCS in both commercial and residential buildings. Some of its notable projects in Malaysia include the Integrated Transport Terminal – Southern Sector in Johor, KL Eco City Strata Office Suites, Kuala Lumpur and KLIA 2 Integrated Complex.
STREAM Environment has an established presence in Asian and Middle Eastern markets, and has offices in United Arab Emirates (UAE), Singapore and Hong Kong. The company is also focusing on continuous development of its current AWCS via its in-house R&D programmes. In July 2017, STREAM Environment has been reported to be a major earnings generator for its parent company, AWC Berhad. The company has also reported a strong growth in the number of projects secured in UAE and Singapore.
Established in 1986, CWM Group Sdn Bhd (CWM) specialises in utility and environmental solutions in Malaysia. CWM focuses its business lines on water engineering, sewage treatment, solid waste management and drainage solutions. Its projects have been installed in industrial and trade premises, including hotels, shopping centres and commercial buildings, as well as private and public institutions.
The company is a full-cycle solid waste management firm, performing waste collection and disposal, waste container management, recycling, composting and landfilling, and liquid waste collection and disposal. CWM has also established a joint venture with Worldwide Landfills Sdn Bhd to manage Malaysia’s three largest sanitary landfills, namely, Air Hitam, Jeram and Kuala Langat Sanitary Landfill. It provides geotextile lining with leachate collection pipeline and methane gas harvesting technologies in these landfills. The methane gas it captures and harvests at the Air Hitam Sanitary Landfill is currently generating up to 2 MW of electricity supplies for Tenaga Nasional Berhad (TNB).
3.6.2 EU Entry Opportunities
Despite demonstrating meaningful progress in developing waste management infrastructure, particularly in municipal waste, Malaysia still has a long way to go. Public awareness on waste management issues is still far from being adequate. In addition, although local governments
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spend between 40-80% of their operational budget on municipal waste management, a substantial portion of it is spent inefficiently. This provides opportunities for European talent and expertise in efficient and effective management to support waste management sector.80 There are a number of areas where European expertise could add real benefit to the development of waste management sector, most notably:
◼ Technologies for the collection, transportation, and sorting of municipal solid waste
◼ Sustainable waste drying technologies
◼ Landfill building, reclamation, remediation, or repurposing to include WTE technologies
◼ Alternative waste treatment technology
◼ Development of a Decision Support System (DSS)
Technologies for the collection, transporting and sorting of municipal solid waste
Opportunities abound for European companies able to offer products and services that can help Malaysia manage and utilise the abundance of municipal solid waste. In particular demand are waste handling equipment; equipment for collection services, including containers and vehicles; waste sorting equipment; as well as technologies for the extraction of valuable components from commercial and household waste. These opportunities are particularly relevant for Malaysian context, where the per capita waste production is higher than in other comparable South East Asian countries.
Sustainable Waste Drying Technologies
As Malaysia’s municipal solid waste is high in moisture content, it needs technology that is able to handle wet waste at a low operating cost. The country’s Incinerators operate at high costs and at low levels of efficiency, as wet municipal solid waste requires extensive drying before it can be
80 Zainu, Z.A. and Songip, A.R., 2017. Policies, challenges and strategies for Municipal waste management in Malaysia. Journal of Science, Technology and Innovation Policy, 3(1).
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incinerated. The country’s first WTE plant, built in 2009, was able to operate at only partial capacity because of the high moisture content of the waste, as well as public concerns over dioxin and furan emissions, and technical issues.
Landfill reclamation, remediation, or repurposing to include WTE technologies
With the current 21 sanitary landfills, the Malaysian government is close to achieving its target to have 23 sanitary landfills by the end 2020 – this was one of the milestones outlined in its Green Technology Masterplan 2017-2030.
The country’s longer term development plans will be tabled in the 12th Malaysia Plan (2021-2026), and will continue to emphasise environmental sustainability in the area of solid waste management. It has plans to safely close 14 non-sanitary landfills, build five sanitary landfills and 29 transfer stations, offering opportunities to European companies with expertise in the sector.
All new landfills in Malaysia will be Level Four sanitary, which employs high-density polyethene membrane liner to protect groundwater, a leachate collection system complete with leachate treatment facility, and a comprehensive landfill gas management system
Some open landfills in Malaysia need to be safely closed to minimise polluting the surrounding areas, or are in need of rehabilitation to extend their lifespan or development for alternative use.
One such project was in February 2020, when the Penang Development Corporation signed a MYR 1 billion (EUR 205 million) joint development agreement with PLB Engineering Bhd for the rehabilitation and redevelopment of the 40-year-old Jelutong landfill. The rehabilitation and redevelopment of the 40-hectare 40-metre-high landfill is expected to take about 15 years. The Penang government plans to turn the rehabilitated prime property into an eco-town.81
81 www.thestar.com.my/news/nation/2019/01/24/its-a-garbage-goldmine-jelutong-landfill-set-to-be-converted-into-prime-real-estate
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Figure 31: the Jelutong Landfill Source: The Star
Alternative Waste Treatment Technology
Although alternative technologies to manage waste need to be carefully balanced between efficiency, sustainability, commercial viability and impact on the environment, several emerging technologies, such as thermal plasma waste treatment method, which employs pyrolysis and gasification, are offering promising avenues for international players. Pyrolysis and gasification technologies have been utilised successfully in large-scale operations in Europe, North America and Japan, with similar setups being recommended to the Malaysian government. While over- reliance on open landfilling has drawn some concern domestically, the push for assessing the environmental and social viability of alternative technologies has begun gaining momentum. There is enough evidence to suggest that at least hazardous waste, the most problematic of landfill-destined waste in Malaysia, could be treated by this type of technology. European companies may find avenues for pilot projects to introduce such technologies as alternatives to incineration and landfilling.
Development of a Decision Support System (DSS)
The general data as well as tracking and analysis of waste management for major townships and cities in Malaysia is not widely available. The existing systems also lack sophistication and accuracy required to both monitor and evaluate progress on national goals. Several studies have
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been undertaken in the past to better understand waste composition, however, the lack of proper sampling techniques and coordination have failed to show true progress on the target aims. The successful management of waste relies heavily on reliable and robust data on quantities and types of materials that can be captured and provided to decision-makers for informed policy and sound investment strategies. The lack of reliable data and monitoring systems has been noted by the Malaysian government, but no DSS systems have been developed yet. This demonstrates real opportunities for EU expertise in tracking, monitoring and quantification of waste management data. Technologies that can support the coordination of waste management and efficient waste disposal, including software and hardware monitoring solutions, can offer entry points for companies in the waste management sub-sector.
European Companies
AMB Ecosteryl S.A.
AMB is a Belgian private company which manufactures equipment and machinery for recycling, recovery of processing of medical waste. Established in 1947, AMB entered the Malaysian waste management market through its partnership with Kualiti Alam Sdn Bhd, a fully-owned subsidiary of Cenviro Sdn Bhd. Kualiti Alam developed Malaysia’s first non-incineration Clinical Waste Treatment Centre in 2014, utilising innovative technology in medical waste disposal, the AMS- serial 250-Ecosteryl. The system is capable of processing residues of up to 300 kg per hour before the residues are ready for disposal at landfills. AMB shares its technology with CTWC and provides the training to its staff.
Under this strategic partnership, AMB has appointed Kualiti Alam as its Malaysian distributor or AMB products and services to Malaysia, Thailand, Indonesia, Singapore, Turkey and Brunei.
Andritz MeWa GmbH
Andritz Mewa GmbH is a subsidiary of the international technology group, ANDRITZ Group. The German company is a leading specialist in shredding and crushing machines and turnkey recycling plants. Established over 30 years ago, its main focus remains electrical and electronic
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scraps, refrigerators, metal composite materials, domestic and industrial waste, old tires and oil filters, and organic waste for biogas plants.
Andritz MeWa has been contracted to supply an automatic recycling plant for refrigerators and electrical/electronic waste, and for recovery of chlorofluorocarbon (CFC) and its equivalent. The contract was awarded by Shan Poornam Green Tech, a subsidiary of Shan Poornam Metals Sdn Bhd, which specialises in scheduled waste and non-scheduled waste recycling in.
In 2017, the automatic recycling plant in Seberang Perai, Penang, has started to process around 300,000 old refrigerators and up to 60,000 tonnes of electrical and electronic scraps from private households annually. The setting up of the plant, the first processing plant for refrigerators and electrical/electronic scrap in Malaysia, is an important milestone in recycling management in Malaysia. The company has plans to set up 86 collection centres for household electrical/electronic scraps to ensure continuous utilisation of the capacity of the recycling plant.
DONG Energy
DONG Energy is a Danish integrated energy company based in Fredericia, Denmark. The company is specialising in waste-to-energy business segment. It has entered the Malaysian market with its latest invention, the REnescience technology. REnescience is an enzyme-based waste treatment solution, which has been developed from laboratory-scale to demonstration plant, and then to the world’s first full-scale enzyme-based waste treatment plant. The company signed a cooperation agreement in 2016 with Cenviro, the Malaysia’s leading waste management company, to develop an integrated waste management concept with a combination of DONG’s technology. As part of the agreement, DONG Energy shipped the mobile version of REnescience plant to Malaysia for initial testing purposes.
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3.7 Recycling
3.7.1 Market Overview
Malaysia has been taking decisive steps on waste management, and has improved its recycling rates in the past few years. According to a study by SWCorp, the country’s national recycling rate increased from 21% in 2017, to reach 28.06% in 2019. The country targets to achieve a 30% recycling rate in 2020.
Figure 32: Recycling Rate in Malaysia Source: SWCorp, Ministry of Housing and Local Government
A number of factors have led the Government to identify waste minimisation as one of its primary policy goals since 2001. Population growth, rapid urbanisation, land availability, access to appropriate funding for improving the waste infrastructure, and a lack of technological advancements have all contributed to the Government’s decision to establish a national recycling target and to move waste management to the centre of its policy mandates.
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The Government actively enforces the Solid Waste and Public Cleansing Management Act (Act 672) (June 2016) in all signatory states, including Kuala Lumpur, Putrajaya, Pahang, Johor, Melaka, Negeri Sembilan, Perlis and Kedah. Under this law, residents are required to separate waste into categories, such as plastic, paper, glass, metal and food waste. In cases of non- compliance, the Government imposes a fine of MYR 50 (EUR 10.2) for a first-time offence. Subsequent failure to comply with regulations can cost up to MYR 1,000 (EUR 205) for residential and commercial offenders.
Figure 33: SWCorp Enforcement Officers checking on Waste Separation in Bangsar Baru Source: Malay Mail Online
It should be noted that Malaysia only records household solid waste management statistics. The existing legislation relating to solid waste do not make it mandatory for the commercial or industrial sectors to report their recycling performance. The loopholes within solid waste management policy make it difficult to track the country’s actual recycling progress.
While the government, local authorities and other private-sector stakeholders have made commendable progress in addressing waste management in the country, various issues have limited the scope of their achievements. These include lack of public participation and commitment, ineffective education, and the perception towards solid waste management as being primarily a municipal problem.
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Plastics Recycling
According to the Malaysian Plastics Manufacturers Association (MPMA) and Malaysian Plastics Recyclers Association (MPRA), the plastics recycling industry contributed MYR 4.5 billion (EUR 922 million) to the economy in 2019, reflecting an opportunity for growth by converting waste to wealth. Plastics recyclers could potentially grow their contribution to the country’s economy by three to four times, to an estimated MYR 15 billion to MYR 20 billion (EUR 3 billion to EUR 4 billion) annually, and this could be achieved with increased investments in better technology, infrastructure and upgraded capacity.
Currently Malaysia is in the process of recovering from the crisis caused by ‘sampah plastik’, or dirty and contaminated, unsorted, plastic waste from high-income countries, after China banned importing plastic waste in 2018. Thereafter, plastic waste from developed nations was rerouted to countries in the South East Asian region, especially Malaysia. It found itself struggling to manage this sharp influx of plastic waste, most of which was brought in under false declarations and without proper documentation.82 Specifically, the importation of plastics waste saw a significant increase, from MYR 241.7 million (over EUR 49.5 million) in 2015 to MYR 739.8 million (over EUR 151.6 million) in 2018.
Unsurprisingly, an influx of factories opened up in Malaysia to handle the rise in imported plastic wastes. While there were around 400 legal plastic waste recycling factories, illegal unlicensed recycling factories also seized the opportunity to enter the market, using low-end technology and polluting methods of disposal such as burying and burning.
82 www.reuters.com/article/us-malaysia-waste/swamped-with-plastic-waste-malaysia-struggles-as-global-scrap-piles-up-idUSKCN1MZ0P4
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Figure 34: Plastic waste piled outside an illegal recycling factory in Jenjarom, Malaysia Source: Business Insider
Operating from makeshift factories in places like Jenjarom and Teluk Gong and Sungai Petani, these illegal recyclers accepted plastic waste from the US, Canada, UK, Australia, and the European Union, among others, which they processed without environmental safeguards. Their emissions and effluents, as well as improper storage methods, caused pollution and health hazards to local communities.
Growing concern about the situation led to a 3-month freeze in 2018 on the issuance of Approved Permits (APs) for the import of plastic waste into the country, while the import of plastic scrap was permanently banned. Plans are in place to phase out imports of other types of plastic waste by 2021. As of May 2019, a total of 62 companies have been approved with the Approved Permit (AP) for the importation of plastic scrap and these companies are closely monitored.83
In 2019, the Malaysian government announced that it was looking to introduce a centralised plastics recycling hub to better monitor and manage the industry. According to the Ministry of Housing and Local Government, all plastic waste recycling factories outside the park will be considered illegal once it has been constructed.
83 www.mida.gov.my/home/plastic-recycling-:-malaysia/posts/
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The ministry is also working with the Customs Department to inspect each container entering the country to ensure that only clean plastic is brought in. As of June 2020, Malaysia importers are required to submit relevant documents (for example, accreditation certificate, certificate of registration issued to plastic dealers) from the country of export to support their application of the Approval Permit (AP) for the importation of plastic waste/recyclables under the HS code 39.151 into Malaysia.
Being an export-oriented economy, a large number of Malaysian manufacturers utilise plastic parts and components as well as plastic packaging materials, with Malaysia being recognised as a top exporter of plastic packaging materials among the Asian countries. Thus it also generates plastic waste along the entire value chain of the manufacturing sector. The two most important polyolefins in Malaysia are polyethylene (PE) and polypropylene (PP). The consumption of recycled materials is high among the local manufacturing companies, with the packaging and electrical and electronics sectors consuming the most plastic material.
Figure 35: Major Market Segments for Plastics Products Source: Malaysian Plastics Manufacturers Association
Recycling companies obtain recycled materials from various sources, including industrial scrap, dumping sites, local producers as well as imported sources. Malaysian plastics recyclers are able to recycle plastics from only 3 out of 7 categories, namely PET/PETE, HDPE and PP. This has
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severely limited Malaysia’s ability to recycle and process the vast quantity of plastic waste that is being generated domestically or being imported into the country.
The plastics recycling industry in Malaysia currently relies on lower value and lower technology mechanical recycling, or primary recycling, to produce resin pellets. The technologies used produce only low-purity plastic waste, and there is limited market demand for the recycled products. There are significant gaps and deficiencies in the current plastics waste management system, which lacks the resources to develop sustainably.
E-Waste Recycling
The management and control of e-waste in Malaysia is regulated under the Environmental Quality (Scheduled Wastes) Regulations 2005, which has been enforced since August 15, 2005. Under this regulation, e-waste is categorised as a scheduled waste, and there are restrictions relating to importation or exportation of e-waste. Currently, enforcement of the regulation is only for the management of e-waste generated from industrial premises. Malaysia does not have any legal mechanism for the control and management of e-waste generated by households. In addition, the country does not have a formal system for managing household e-waste in an environmentally sound management system for recovery and disposal.
The government wants to make it mandatory for consumers to send certain unwanted electrical and electronic items to places licensed to handle e-waste. The proposed change in the law, currently being drafted, aims to reduce harm to the environment and public health when such waste is not disposed of properly. The proposed regulation covers televisions, air-conditioners, refrigerators, washing machines, personal computers and mobile phones.84
Most of these items are currently recycled in the informal sector, where those with little expertise and resources disassemble the appliances and devices and burn some components to extract materials that can be resold, without consideration for health and environmental effects.
84 www.thestar.com.my/news/nation/2019/05/30/doe-gets-tough-on-ewaste/
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Figure 36: E-waste Management in Malaysia Source: Department of Environment
Similar to what transpired in the plastics waste sector, after China banned the import of e-waste, thousands of containers laden with e-waste from Europe and the US were illegally imported as metal scrap into the country through the ports in Pasir Gudang in Johor and Port Klang in Selangor. These are then transported to numerous illegal e-waste treatment plants throughout the peninsula, where they are processed for useful materials before being dumped illegally.
The Malaysian Department of Environment has recently drafted a specific law for the six controlled items, which is currently under review by the Attorney General’s Chambers. In the draft regulation, e-waste generated from households, institutions, commercial and other organisations will be regulated, making it the consumers’ responsibility to discard or send these items to registered retailers, collectors, recycling facilities or recovery facilities.
The new regulation proposed by the Department of Environment is likely take the form of an Extended Producer Responsibility system, which has been applied in many countries, including the EU, Taiwan, Hong Kong, Japan, South Korea and China. Under this system, which is based on the concept of shared responsibilities, manufacturers and importers must pay a recycling fee according to the put-on-market volume of their appliances. The recycling fee will be used to pay
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for the proper collection and recycling of the e-waste in an environmentally sound manner, in a system that emphasises the responsibilities of manufacturers and importers, and assigns specific roles to retailers, collectors, recyclers and consumers.
Figure 37: New Mechanism for Household E-waste Management Source: Department of Environment
Malaysia’s first facility for recycling of electrical and electronic waste started operations in 2017. According to the supplier, German-based Andritz MeWa, the plant is able to process annually around 300,000 old refrigerators and up to 60,000 tonnes of electrical and electronic scrap from private households. Private company Shan Poonam Metals is charged with operating Malaysia’s first e-waste processing plant in collaboration with the Department of Environment.
The rapidly growing waste stream has led to a growing ecosystem of e-waste collectors and recyclers in Malaysia. The country currently has 87 premises with partial recovery facilities and 37 premises with full recovery facilities licensed by the Department of Environment.85
85 www.thestar.com.my/news/nation/2019/05/30/doe-gets-tough-on-ewaste/
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Local Companies
UEM Environment Sdn Bhd (UEME) is a subsidiary of the Malaysian conglomerate, the UEM Group Berhad. It provides integrated waste management solutions, including scheduled waste management and disposal, including collection, transportation, analysis, recycling and recovery, treatment, and disposal of hazardous waste. UEME also successfully designed, built and operated the first Malaysian-made Rotary Kiln incinerator, capable of treating hazardous and clinical waste.
In addition, the company owns and operates Kualiti Alam Waste Management Centre, a comprehensive hazardous waste management facility. The centre houses various treatment processes, including physical and chemical treatment, solidification and stabilisation, incineration and secured landfilling.
Green Concept Technology is a licensed plastics recycler incorporated in Malaysia in 2009. Located in Klang in Selangor, its factories are ISO 14001:2015 and ISO 9001:2015 certified, and produce plastic resin that is compliant with restriction of hazardous substances (RoHS) standards. It provides plastics services such as washing, sorting, pelletising, as well as toll processing for manufacturers. The company’s plastic resin (PP and HDPE) is used in furniture parts, consumer appliances, plastic containers, plastic pallets for freight and even automobile parts.
Klean Malaysia is the first start-up provider of reverse vending machines in Malaysia. It has been working in partnership with several other start-ups to promote the use of its machines. Klean's ecosystem utilises a unique Malaysian-made smart reverse vending machine with its own Klean operating system and an app that rewards people for recycling empty polyethylene terephthalate (PET) bottles and aluminium cans with an innovative points scheme, which is redeemable for rewards such as prepaid air time and discounts for transportation rides, goods and services.
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Figure 38: Klean Malaysia’s Smart Reverse Vending Machine Source: The Star
Shan Poornam, a home-grown waste recovery and treatment company, has presence in Kuala Lumpur, Johor and Sarawak. The company has an eight-acre facility in the Prai Industrial Estate, Pulau Pinang, and employs 600 personnel. It has the capability of processing 5,000 metric tonnes of hazardous and non-hazardous waste per month. It has customised facilities to convert waste such as e-waste, spent acid, alkaline, solvent, sludge, dross and non-ferrous metal scrap into raw materials for various industries, and is capable of providing pure closed-loop recycling whereby materials from the waste can be reused to create new products over and over again. Shan Poornam produces finished products such as secondary aluminium alloy ingots, platinum, gold, palladium, silver and copper cathodes.
3.7.2 EU Entry Opportunities
The Malaysian recycling subsector offers opportunities for European companies in several key areas:
◼ Plastics recycling technologies
◼ E-waste recycling technologies
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◼ Household recycling
◼ Other recycling solutions
Plastics Recycling Technologies
According to the Malaysian Plastics Manufacturing Association and the Malaysian Plastics Recyclers Association, plastics reuse and recycling in Malaysia could generate revenues of as much as MYR 200 billion (EUR 41 billion).
Figure 39: The Plastics Industry’s Value Chain from Upstream to Downstream Source: Malaysian Plastics Manufacturers Association and Malaysian Plastics Recyclers Association
In order to maximise the full potential of the plastics recycling sector, Malaysia is in need of cost- effective advanced technologies and solutions employing feedstock recycling and energy recovery methods.
Many of the existing plastics recycling plants in Malaysia are small operations that are looking to upgrade their capacity, and require better equipment for mechanical recycling, plastic waste labelling and segregation technologies to increase the volume and quality of plastic waste produced. These require modern plastic waste management infrastructure and systems.
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Larger plastics recyclers would benefit from new technologies such as chemical recycling processes to produce a more reliable supply of higher-quality plastics and to treat more types of plastics.
E-waste Recycling Technologies
The amount of e-waste, estimated to be 8.8 kg per person in 2016,86 is growing by an average of 14% per year. The Department of Environment has established a number of centres for e-waste collection across the country, and a system to license e-waste recyclers, as a direct response to the increasing e-waste in the country.
This offers significant opportunities for European companies to tap into this nascent recycling segment. Solutions that make the process of recycling e-waste cheaper and more environmentally friendly, and to detoxify more plastic parts in e-waste (given that plastics form a major part of devices like printers and flat screens).
Opportunities also exist for the introduction of new technologies to increase the number of chemical elements recycled and increase their recycling rates: on the one hand with mechanical processes (automation of disassembly and sorting), on the other hand with chemical extraction processes in solution.
Household Recycling
Since the beginning of September 2015, the Government has made it mandatory to separate solid waste at source. The implementation is pursuant to regulations under Solid Waste and Public Cleansing Management Act 2007 (Act 672) and it is enforced in Kuala Lumpur, Putrajaya, Johor, Melaka, Negeri Sembilan, Pahang, Kedah and Perlis. The Act mandates households to separate solid waste according to waste composition such as recyclable waste, residual waste and bulky/garden waste.
86 www.straitstimes.com/asia/se-asia/malaysias-department-of-environment-gets-tough-on-polluting-e-waste
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Yet, the recycling rate is still gaining traction very slowly due to improper implementation of the 2+1 recycling scheme, lack of information about efficient and appropriate recycling methods, non- provision of bins for recyclable items, and low levels of awareness among the residents on recycling processes and methods were among the key reasons for lack of recycling. These reasons open up entry points for European companies to gain a foothold in the household recycling market. European companies may wish to cater to the provision of specific disposal storage designs for recyclable waste and the recycling storage products for households. Companies may also find opportunities to address the lack of awareness on recycling processes and methods via test-bedding of specific recycling designs and showcasing recycling methods to the public.
Other Recycling Solutions
Efficient waste management services are needed in both urban and rural areas in order to achieve a greater recycling rate. The particular technologies in demand are linked to de-centralised collection and sorting, recycling and extraction of valuable components from commercial and household waste. In rural areas, additional technologies, such as telematics and GPS mapping, are also gaining interest as efficient and de-centralised waste management solutions, which can optimise recycling monitoring and utilisation. With the growing demand for sustainable and efficient solutions to the Malaysian waste sector, implementation of recycling structures in the general waste management system are required. Opportunities are likely to open up in collection scheduling, vehicle routing and transfer station designs. With a significant experience in sustainable waste management at home, European companies can offer much needed support to the Malaysian government.
European Companies
The Ocean Cleanup
The Ocean Cleanup is a non-government engineering environmental organisation based in the Netherlands that develops technology to extract plastic pollution from the oceans. It aims to clean up what is already polluting oceans and to intercept plastic on its way to the ocean via rivers.
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In 2019, The Interceptor, a rubbish extractor created by The Ocean Cleanup, was deployed in Klang River, one of the most polluted rivers in Peninsular Malaysia, to help clear it of plastic waste. The Interceptor is capable of trapping up to 100,000 kg of waste, which is then collected by a local operator, KDEB Waste Management Sdn Bhd, and sent to recycling centres. The Ocean Cleanup is collaborating with a state-government-linked company, Landasan Lumayan Sdn Bhd, for the project.
Figure 40: The Interceptor 002 on the Klang River Source: Free Malaysia Today
Andritz MeWa GmbH
Andritz MeWa is the recycling arm for the Austrian-headquartered ANDRITZ Group. In addition to its other segments of Malaysian market, ANDRITZ Group entered the recycling industry in 2016, when Shan Poornam Metal Sdn Bhd, one of Cenviro’s subsidiaries in recycling and recovery sectors, signed a Memorandum of Understanding (MoU) with Andritz MeWa to build Malaysia’s first e-waste recycling plant.87 The plant is expected to have the capacity to recycle up to 100,000 tonnes of e-waste, including computer parts, used mobile phones and other unwanted home appliances, annually.88
87 www.basel.int/Implementation/Ewaste/Overview/tabid/4063/Default.aspx 88 http://bdg-asia.com/malaysia-gets-serious-about-waste-management/
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Andritz MeWa has been contracted to supply recycling machines to Shan Poornam Metals, which will be installed in the recycling plant in Seberang Perai, Penang. The additional stages will also see over 80 collection centres for e-waste developed across Malaysia.
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3.8 Soil Prevention
3.8.1 Market Overview
The development process in Malaysia has ushered in the challenges of soil degradation, soil erosion, and sedimentation, which has led to growing incidences of landslides and flash floods across the country.
Landslides and Slope Stability
Malaysia is among the top 10 countries in the world with the highest number of landslides in the past decade. According to the Malaysian Ministry of Works, in November 2019, there were 26,000 hotspots nationwide on landslide watch, on top of the 16,454 existing ones that were already being closely monitored.
The Ministry of Works has undertaken various measures to monitor hotspots, which include undertaking evaluation, danger and risk mapping; setting up a real-time, early warning system for landslides; fortifying high-risk slopes along federal roads, as well as undertaking landslide prevention work on slopes along 236 federal and 129 state roads.89
The Ministry’s Public Works Department (JKR) has received a budget of MYR 300 million (EUR 61.5 million) to implement landslide prevention works. JKR is currently using the latest technology, such as LiDAR (Light Detection and Ranging) equipped drones and Early Warning Systems (EWS), as well as Global Navigation Satellite Systems. The systems in place continuously monitor slope movement and the data is transmitted to a server for analysis and to alert users to take necessary action.90
Soil Erosion and Sedimentation
Land opening activities caused by rapid urbanisation, infrastructure development and uncontrolled agricultural activities have caused soil erosion in many sites across Malaysia, mainly
89 www.thestar.com.my/news/nation/2019/11/20/26000-new-hotspots-on-watch-list 90 ibid
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as a result of extended exposure of bare soil surface. This has led to excessive sedimentation in the country’s waterways. In some parts of the country, flash floods occur with alarming frequency due to decreased waterway capacity. For example, in Kuala Lumpur and its neighbouring districts, there have been a total of 1,228 flash flood incidents in 543 locations throughout between 2014 and 2018. Of the 543 locations, 186 have been hit by flash floods more than once.
The Department of Irrigation and Drainage (DID) has identified three main factors in its annual flood report for 2017/2018, as follows: 91
◼ The rapid pace of development, such as housing and highways that are poorly planned and controlled;
◼ The inability of rivers and drainage systems to handle the flow of water; and
◼ The rapid water flow and sedimentation.
Figure 41: A road located near the Putra World Trade Centre, Kuala Lumpur Source: The Star
Research has been undertaken in selected locations, such as Cameron Highlands in Pahang, Tikolod in Sabah, and the Langat River in Selangor to better understand the causes of land degradation and soil erosion, given the prevalence of soil degradation in these areas. Apart from
91 www.thestar.com.my/news/2019/12/02/these-are-the-flood-hotspots-in-the-klang-valley
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the industrial developments, overgrazing (35%), deforestation (30%) and agricultural activities (28%) represent the major causes of soil erosion. In Malaysia, erosion by water is a major concern, compared to erosion by wind. As a tropical country, it receives heavy annual rains and the rainfall can lead directly to soil erosion, particularly in the deforested and overgrazed lands.
Figure 42: Forest Clearing in Sg Mensun, Cameron Highlands Source: The Star
Coastal Erosion
Additionally, to address coastal erosion issues, Malaysia’s Department of Irrigation and Drainage (DID), has adopted proactive measures by building protective coastal structures since 1986. It has also created an Erosion Hazard Map, among other disaster management plans, to combat the effects of rising sea levels. According to the DID, 15.3% of Malaysia’s 8,840 km coastline is experiencing coastal erosion.92 With a large proportion of population residing in coastal regions, the increasing erosion at the coast has been identified as an additional challenge for the country.
DID is implementing the Integrated Shoreline Management Plan (ISMP) for every state in Malaysia, primarily aiming to provide guidelines on implementing sustainable coastal
92 www.themalaysianinsight.com/s/19067/
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development while providing adaptation strategies to minimise the associated risks. As of 2018, JPS Malaysia has completed ISMP for Pahang, Melaka, Negeri Sembilan, Pulau Pinang, Labuan and Miri, Sarawak states. Two other ISMPs are currently ongoing, these are ISMP Sabah and ISMP Johor.93
Soil Pollution
While Malaysia has not inherited a legacy of contaminated land as other countries like Vietnam, soil pollution is a growing issue in the country. Many sites such as motor workshops, petrol stations, fuel depots, railway yards, landfills, industrial sites and ex-mining land are potential contaminated sites. It should be noted that limited attention has been paid to the identification and remediation of such contaminated sites.
More recently, the Malaysian government is starting to clamp down on uncontrolled release of pollutants through illegal dumping of wastes, discharge of effluent from industries, and the release of chemicals through agriculture activities, which have contaminated soil, rivers and groundwater and thereby created environmental and human health problems. The Ministry of Housing and Local Government is also starting to address issues relating to soil contamination in unsanitary landfills.
In March 2020, an incident of illegal dumping of chemical waste into a river in the Pasir Gudang (an industrial town in Johor), led to 2,700 people falling ill, and resulted in a massive clean-up of 900 tonnes of contaminated soil and 1,500 tonnes of polluted water. The incident has led to the authorities considering tightening the Environmental Quality Act 1974.
Regulations to Protect and Remediate Soil
No standards and protocols are available on soil degradation yet. However, Malaysia’s land degradation has been addressed, to some extent, via variable standards, which cover environmental protection. This includes the Land Conservation Act 1960, National Land Code 1965, Environmental Quality Act 1974, Town and Country Planning Act 1976, Drainage Works
93 www.water.gov.my/index.php/pages/view/515?mid=290
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Act 1954, Local Government Act 1976, earthworks bylaws, Street, Drainage and Building Act 1974 and other acts. The National Policy on Environment has further included land degradation as one of the considerations when designating land for industrial, commercial or agricultural purposes.
Several initiatives have been undertaken to ensure that land degradation is prevented. For example, the Malaysian government now requires all sites that have been used for polluting activities to be assessed for the extent of land contamination and cleaned up before they can be re-developed for non-polluting activities. The regulation includes activities in: industrial areas, oil installations and premises, chemical plants and warehouses, shipyards, gas and power stations, toxic waste treatment facilities, scrapyards, landfills and facilities for the treatment of sewage.
The soil prevention sub-sector is now regulated under various departments of the Ministry of Environment and Water, including the Department of Director General of Lands and Mines, National Institute of Land and Survey, and Department of Environment. The Ministry of Energy and Natural Resources is responsible for overseeing Malaysia’s natural resources, such as soil, forest, wildlife, minerals, and managing energy-related governance.
The Dutch Guidelines on Soil Protection are the key reference point in Malaysia regarding prevention of soil erosion and degradation.94 They provide environmental pollutant reference points (i.e., concentrations in environmental medium) used in environmental remediation, investigation and clean-up, and indicate when the functional properties of the soil for humans, plants and animals are seriously impaired or threatened.
Local Companies
MySpatial Sdn Bhd is a Malaysian company specialising in the provision of professional services and products in the field of geospatial technology. Founded in 2009, the company has been involved in implementing geospatial application projects in various sectors, from agriculture (oil
94 http://pkukmweb.ukm.my/zuhairi/Pengajaran/intranet/STAG3112/WePapers.com/STAG3342_L5_environmental%20standards.pdf
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palm, rubber and paddy), transportation (road and highway construction), local administrative bodies and municipalities, utilities (electricity, water and gas), forestry and environment.
MySpatial focuses on the core product segments, namely Data Acquisition (unmanned, airborne and spaceborne optical, Radar or LiDAR data acquisition, GIS Database Development (for palm oil) and System Development (Web Mapping Application, Business Intelligence, Mobile Mapping Application). Its domestic clients include PLUS Berhad (largest highway concessionaries), Works Ministry, Department of Environment, Malaysia Highway Authority, Sapura Berhad, Jalur Cahaya Sdn Bhd, Lembaga Minyak Sawit Malaysia and NAZA Group.
MTS Fibromat (M) Sdn Bhd is an established local company with experience in manufacturing of erosion control products. The company produces a wide range of erosion control products, engineered for applications in slope stabilisation, river bank stabilisation, soil erosion control and embankment protection. The company is a pioneer in the production of geosynthetic and erosion Control Products in Asia. It works with a number of associated companies in order to provide total soil erosion control solutions for customers. The company’s customers come from housing, railway, marine, water, coastline and landscape sectors. The company has also undertaken overseas projects in the wider South East Asia region.
Forest Point Sdn Bhd is a Malaysian installer and technical solution provider of Geosynthetic Erosion Control systems in Southeast Asia. The company undertakes specialist ground treatment and erosion control contract works, such as slope repair works, geogrid reinforced wall, mud-tube desilting system, river bank protection works and geocell erosion control system implementation. It also manufactures and markets natural and synthetic erosion control products and silt control systems.
The company has implemented projects, such as Turf Reinforcement Matrix (TRM) - Detention Pond in the state of Negeri Sembilan, mud tube projects in agricultural land located in Cameron Highlands and has also installed performance erosion mat in tourism area located at Genting Highlands.
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North Soil Eng (M) Sdn Bhd is a Malaysian soil investigation contractor. The company specialises in slope stabilisation and geotechnical investigation for projects in Malaysia and overseas. The company has few ongoing projects focused on soil prevention material installation for river banks and slope erosion control implementation for Malaysian railways tack construction projects in hilly areas.
3.8.2 EU Entry Opportunities
European companies may find opportunities in the Malaysian soil erosion market in the following areas:
◼ Advanced technological solutions for soil erosion
◼ R&D services and knowledge transfer on efficient soil treatment and control
◼ Soil monitoring and assessment technologies
Advanced Technological Solutions for Soil Erosion
The market for soil prevention technologies and treatment is still in its nascent days in Malaysia. It is primarily dominated by local companies, providing low value technological solutions, including slope, riverbank, soil and embankment stabilisation services, and soil erosion control solutions. European companies, on the other hand, can tap into this market by offering more efficient and technologically advanced systems for soil erosion treatment and control, such as solidification and stabilisation, soil flushing, biological treatment and physiochemical treatment.
Agriculture remains the main market segment where demand for advanced technologies and efficient solutions is growing. Companies with expertise in soil treatment in agricultural sectors would find venues for their services in Malaysia.
R&D Services and The Knowledge Transfer on Efficient Soil Treatment and Control
Provision of value-added research and development services and the knowledge transfer on efficient soil treatment and control methods are also proving to be a lucrative market segment in Malaysia. While the local companies lack technologically advanced systems, the Government
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of Malaysia is interested in acquiring advanced soil erosion and control solutions via international collaborations.
Soil Monitoring and Assessment Technologies
The soil monitoring and early erosion detection technologies are also providing a gap in the market. Malaysia does not currently have an extensive database on the state of its soil resources, making it difficult to develop value-added projects. European companies are well-positioned to service this market segment, given their experience and available technology in soil erosion detection.
European Companies
Tencate Geosynthetics Asia Sdn Bhd
Tencate Geosynthetics is a Dutch company which provides solutions for civil and environmental engineering challenges. In Asia, TenCate is headquartered in Malaysia, and has manufacturing facilities in Selangor, Malaysia and Zhuhai, China. The company has offices and subsidiaries in the Philippines, India, Indonesia, Myanmar, Singapore and Thailand respectively. TenCate’s services include slope and wall reinforcement, basal reinforcement, ground improvement systems, pavement rehabilitation, waste landfill applications, surface erosion protection, silt and sediment pollution prevention, riverbank and shoreline erosion protection.
In addition to its other projects, the company has installed TenCate Mirafi® HPa subgrade stabilisation for a container yard in Westport, Klang to solve the general subsoil issue in this area. The surrounding area is made up of very soft marine clay to depths of more than 30m, the water table is almost at ground level and the subgrade comprises a desiccated crust layer of the marine clay formation. At this project site, a stable load supporting platform was installed for container handling and stacked storage.
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Eijkelkamp Soil & Water
Eijkelkamp Soil & Water is a Dutch manufacturer and producer of the environmental research and monitoring equipment. The company’s products range from research and monitoring technology, online information systems to specialised sonic drilling and sampling equipment. The company is represented by specially selected partners in more than 70 countries.
The company entered the Malaysian market via Kuala Lumpur-based distributor with exclusive rights to its drilling and soil sampling equipment. The distributor, known as Surechem Sdn Bhd, is distributing various soil protection and measurement products to major construction companies.
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3.9 Noise Protection
3.9.1 Market Overview
While Malaysia seeks to respect its people’s need for a quiet living environment and reduce their exposure to the noise generated from its growing economic and community activities, noise pollution is becoming an ever-increasing issue in the country.
Noise pollution in Malaysia originates from a variety of sources, including road traffic, railways, airports, machinery, construction, public works and building sites, industrial sites and domestic activities, among others, and is particularly pervasive in highly urbanised and industrial areas. It has become synonymous with the urban settlements, industrialisation, rapid housing expansions, population growth and concentration as well as technological advancements.
Figure 43: Traffic in Malaysia Source: Star2.com
While comprehensive data on noise pollution is not available in Malaysia, some studies have been conducted over the years. For example, research in Kuala Lumpur has been done to measure sound levels in 32 points across the city. The results have shown the traffic noise levels
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between 75 and 85 dBA, and occasionally reaching 90 dBA.95 These noise levels exceeded the standards and guidelines in day and night time limit, permitted by the World Health Organisation, and the regulations of Malaysia.
Receiving Land Use Day Time Night Time Category 7.00 am - 10.00 pm 10.00 pm - 7.00 am Noise Sensitive Areas, Low Density Residential, Institutional (School, 50 dBA 40 dBA Hospital), Worship Areas.
Suburban Residential (Medium Density) Areas, Public Spaces, Parks, 55dBA 45 dBA Recreational Areas.
Urban Residential (High Density) Areas, Designated Mixed Development 60 dBA 50 dBA Areas (Residential - Commercial).
Commercial Business Zone 65 dBA 55 dBA
Designated Industrial Zones 70 dBA 60 dBA
Table 12: Maximum Permissible Sound Levels (LAeq) Source: Department of Environment, The Planning Guidelines for Environmental Noise Limits and Controls
Noise Abatement Regulations and Standards
Key legislation that addresses noise pollution include the Environment Quality Act 1974 and the Environmental Quality (Motor Vehicle Noise) Regulations 1987 Act.
The Department of Environment (DOE) under Ministry of Environment and Water has published three sets of guidelines on acceptable noise limits for various types of land use and human activities:
◼ The Planning Guidelines for Environment Noise Limits and Control provides noise acceptance criteria for quantitative assessment of noise disturbance.
◼ The Guidelines for Noise Labelling and Emission Limits of Outdoor Sources further prescribes comprehensive methodology for measuring and reporting of noise emissions from outdoor sources.
◼ The Planning Guidelines for Vibration Limits and Control provides vibration acceptance criteria.
95 www.noiseandhealth.org/article.asp?issn=1463-1741;year=2014;volume=16;issue=73;spage=427;epage=436;aulast=Yuen
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In turn, the Construction Industry Development Board (CIDB) has developed its Guidelines for Working at Noisy And Dusty Areas In Construction Site (CIS 17: 2010). The guidelines were established to provide guidance to building contractors on how to protect their employees in a construction site from excessive noise and dust.
Meanwhile, in June 2019, the Department of Occupational Safety and Health (DOSH) launched the Industry Code of Practice (ICOP) for Management of Occupational Noise Exposure and Hearing Conservation 2019, to reduce employees’ exposure to excessive noise at the place of work, together with more structured and workable arrangements through the Regulations under the Occupational Safety and Health Act 1994 [Act 514].96
Taken together, these comprehensive legislations and guidelines specify noise limits in the environment; procedures on environmental noise measurements; noise abatement structures; siting and zoning of light to heavy industries; the maximum level of sounds that can be emitted by motor vehicles, protection from excessive noise at the workplace, as well as other measures to reduce noise disturbances.
However, it should be noted that while the country has the relevant legislation and guidelines relating to noise pollution, enforcement remains an issue, and action is usually taken only when complaints are lodged. Local authorities (City Councils) are empowered to resolve domestic issues (such as excessive noise disturbances) based on public complaints.
Noise Abatement Projects in Malaysia
Over the past decade, Malaysia has seen an increase in noise abatement projects. The country’s first noise barriers were installed on the Ampang-Kuala Lumpur Elevated Highway in the 1990s. Subsequently, Malaysia continued to use first generation noise barriers for noise mitigation projects, as cost considerations did not allow it to adopt newer technologies. Noise abatement
96 www.dosh.gov.my/index.php/legislation/codes-of-practice/industrial-hygiene/3286-industry-code-of-practice-for-management-of-occupational- noise-exposure-and-hearing-conservation-2019/file
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projects for roads, highways and flyovers typically utilised noise barriers such as natural vegetation, concrete hollow blocks, or concrete panels.
Figure 44: The Ampang-Kuala Lumpur Elevated Highway
In recent years, Malaysia has turned to the use of next generation noise barriers, which have been installed on the Setiawangsa-Pantai Expressway and the Damansara-Shah Alam Highway. These are more effective in noise mitigation because they cover a larger portion of the road, with some being made of more expensive acoustic metal panels instead of polycarbonate or Perspex.
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Figure 45: Noise barriers Walls along Malaysian Highways Source: dRightSource.com
Construction and industrial sites have also started implementing noise abatement technologies, such as noise barriers, at sites within close proximity to residential areas. Mass Rail Transit (MRT) projects in the Klang Valley now have to comply with stringent noise control requirements imposed by the Department of Environment. The first few Light Rail Transit (LRT) projects in Malaysia in 1998 did not have noise control measures then because there were fewer guidelines at the time. However, the large number of complaints relating to noise pollution during those initial projects led the DOE to require all subsequent MRT and LRT projects to have noise barriers.
In Kuala Lumpur, MRT stations and tracks have also been upgraded with semi and full enclosures as noise barriers. These barriers are typically used in locations where high-rise apartments and buildings dot along the railway system. Additionally, the usage of low vibration track-forms and resilient pads is increasing across Malaysia, primarily in the underground sections of the rail alignment and at the elevated viaducts in close proximity to residential buildings. Low vibration track-forms and resilient pads often function as shock absorbers and are primarily used for the purposes of vehicular sound reduction.
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Figure 46: Noise Barriers for Mass Rail Transit in Malaysian Cities
Local Companies
ISTIQ Noise Control Sdn Bhd was established in 1995 and has grown to become a leading provider of various noise abatement services, including Industrial Noise Control, Oil & Gas Noise Control, Architectural Acoustics, and Traffic Noise Control in Malaysia. Among its many projects, the company has supplied and installed ISTIQ Vent Silencers in major Japanese household products manufacturer Kao’s manufacturing plant, as well as its silencers, acoustic modular panels and sound barrier walls in schools located next to highways in Malaysia. Some of its clients are Matsushita, Shell, Hewlett-Packard, Petronas, Volvo, Tractors and Siemens. The company exports its products to Australia, Papua New Guinea, South Korea, UAE, QATAR, Bahrain, India, Brunei, Thailand, Singapore, Philippines, Hong Kong, Sudan, and the Maldives.
Vestland Resources Sdn Bhd was established in 2008, specialising in building construction. An ISO 9001 certified company, Vestland is also a Grade ‘7’ construction company registered with the Construction Industry Development Board (CIDB). The company partnered with a Japanese noise barrier specialist Kouken Co Ltd to form a consortium supplying noise barriers for the Damansara-Shah Alam Elevated Expressway, Sungai Besi–Ulu Kelang Elevated Expressway and other key projects in Malaysia. Vestland and Kouken are currently aiming to export its noise barrier system to South East Asia and the Middle East, using Malaysia as central
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base and hub for manufacturing. The partners are also working with a local OEM Supplier, Kamco Aluminium Sdn Bhd, which supplies both metal and transparent noise barriers manufactured under the license of Nishida Industries Co.
Kumpulan Jebco M Sdn Bhd is a Malaysian manufacturer of industrial rubber goods and rubberised fabrics. Founded in 1975, the company is the manufacturing arm of Kumpulan Jetson Berhad, a public listed company in Malaysia. The company has been manufacturing automotive and anti-vibration rubber-metal components in its plants in China, India and Malaysia. Its core products, which include rubber-to-metal anti-vibration products for the automotive, rail and agricultural sectors, are exported to clients from Europe (Denmark, UK, France, Spain, Italy, Poland, Sweden), South Korea, Japan, Australia, Brazil and other South East Asian countries.
3.9.2 EU Entry Opportunities
The Malaysian market for noise protection, reduction and mitigation materials, equipment and systems is currently small, but has the potential for growth. Opportunities exist for European players in the following areas:
◼ Advanced noise assessment, control and protection technologies
◼ Noise monitoring and analysis products
Advanced Noise Control and Protection Technologies
The Malaysian market is showing interest in more advanced noise abatement technologies, including noise barriers, low vibration track-forms and resilient pads. Experienced European companies in noise mitigation may find demand for their products, particularly in public procurement projects. Additionally, the opportunities exist to export products, such as noise monitoring programs, hearing protection devices (HPDs) for industrial use, audiometric testing systems as well as engineering and administrative control systems.
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Noise Monitoring and Analysis Products
The Department of Environment (DoE) relies almost exclusively on external partners for provision of noise monitoring data and analysis. However, national data is largely unavailable due to limitations in resources, skilled workforce and advanced technology. DoE has expressed interest to acquire capacities for new and improved methods to study and understand the causes of noise pollution and its effects on population as well as noise monitoring technologies. In addition, DOSH has recently put forward compulsory guidelines requiring noise measuring equipment (including sound level meters and noise dosimeters) to comply with the standard determined by the International Electrotechnical Commission (IEC), which would be an opportunity for European companies with the relevant expertise.97
As a result, noise predictive software, analytical tools and monitoring equipment may be in demand in the medium-term future. At the same time, the knowledge and expertise in noise measurement and analysis can lead further to interesting consulting and partnership opportunities, and may offer a direct way for European companies to enter the Malaysian noise control market.
European Companies
Maccaferri
Maccaferri is an Italian company, which provides tailor-made design and development solutions for clients in complex civil, geotechnical and environmental engineering. The company initially sold its sound barriers via a distributor network in the Malaysian market, then in 1994 it established its local office, Maccaferri (Malaysia) Sdn Bhd. Today, its products are distributed across Peninsular and East Malaysia via a network of distributors and exported to the neighbouring countries of Brunei and Singapore.
97 www.dosh.gov.my/index.php/legislation/codes-of-practice/industrial-hygiene/3286-industry-code-of-practice-for-management-of-occupational- noise-exposure-and-hearing-conservation-2019/file
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Maccaferri Malaysia is based in Petaling Jaya, with its sales office and factory located in Selangor and Senawang, respectively. The company is certified to ISO 9001:2000 and is the first local double-twist wire mesh manufacturer that is accredited to such quality standards.
The company has installed its sound barriers equipment for various Mass Rail Transit (MRT) projects in Malaysia. Its barriers have helped to reduce the impact of noise and vibrations from trains in residential areas, while its sound absorption cushions have been installed in underground MRT railway tracks.
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4. Regulations
There are a number of regulations related to Environment & Water Technologies in Malaysia. Like in many other countries in the region, some of the regulations are designed to protect and uphold the national interest, whereas others are more pertinent to investors and companies that are in the sector, or looking to enter the sector in Malaysia. Investors and companies, local and foreign alike, must ensure their compliance with these set of regulations.
To protect and safeguard the environment, and to ensure that the national interest related to environment is well-regulated, the Malaysian Department of Environment (DoE) was established in 1998. The DoE is placed under the discretion of the Ministry of Environment and Water (MEWA) and is responsible for the administration of the Environmental Quality Act, 1974 (EQA), the main act related to environmental protection in Malaysia.
The primary objective of the EQA is to restrict the discharge of waste that breaches the acceptable levels into the environment. The EQA specifies a number of regulations that have been introduced and enforced, pertaining to the prevention, abatement, control of pollution and enhancement of the environment in the country.
The DoE has published a comprehensive Investor Guide, which covers environmental regulations and processes involved for obtaining licenses. The document is available on the DoE website: http://www.doe.gov.my/eia/wp-content/uploads/2012/03/A-Guide-For-Investors1.pdf
Companies that require a more detailed understanding of environmental regulations in Malaysia are encouraged to read the Investor Guide. A new draft of the guideline is expected to be issued in 2020, pending the approval from the federal government.
Based on the current Investor Guide, all industrial activities are required to obtain the following permissions from the Director General of DoE before such activities can be implemented in Malaysia:
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1. Environmental Impact Assessment (EIA) reports - under Section 34A of the EQA, 1974 (for prescribed activities98); 2. Site suitability evaluation (for non-prescribed activities99); 3. Written permission to construct - under Section 19 of the EQA, 1974 (for prescribed premises- scheduled wastes treatment and disposal facilities, crude palm oil mills and raw natural rubber processing mills); 4. Written approval for installation of incinerators, fuel burning equipment and chimneys – under Environmental Quality (Clean Air) Regulation, 1978, EQA, 1974; and 5. License to use and occupy prescribed premises and prescribed conveyances – under Section 18 of the EQA, 1974.
Generally, there are three steps involved in applying for permissions or licenses. The steps are:
◼ Step 1
▪ Site Suitability Evaluation (for non-Prescribed Activities)
▪ EIA Approval (for Prescribed Activities)
◼ Step 2 (Activities subject to air and water pollution control)
▪ Written Permission (Air)
▪ Written Notification (Sewage, Industrial Effluent, Leachate)
▪ Written Approval (Prescribed Premises: Crude Palm Oil Mills, Raw Natural Rubber Mills, Scheduled Wastes Facilities)
◼ Step 3 (Licence to occupy)
▪ Crude Palm Oil Mills
▪ Raw Natural Rubber Factories
▪ Scheduled Waste Treatment and Disposal Activities
▪ Prescribed Conveyance
98 Please refer to Appendix B in the guideline accessible through www.doe.gov.my/eia/environmental-requirements-a-guide-for-investors/ for the list of prescribed activities 99 Activities other than those listed in the list of prescribed activities
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The Investor Guide specifies the following regulations relating to gaseous emission, sewage, industrial effluent and leachate discharge, use of Ozone Depleting Substances (ODS), and scheduled waste management
Gaseous Emissions
Industries emitting gaseous and air emission are required to comply with the following air emission standards for the control of air pollution and gaseous emissions:
1. Stack Gas Emission Standards from Environmental Quality (Clean Air) Regulations 1978 (please refer to Appendix J1 in the Guide) 2. Recommended Malaysian Air Quality Guidelines (Ambient Standards) (please refer to Appendix J2 in the Guide)
All industrial projects emitting gases subject to EIA shall be designed and operated using Best Available Techniques (BAT) in achieving a high and acceptable level of protection for the environment.
Sewage, Industrial Effluent and Leachate Discharge
Industries which discharge sewage, industrial effluent and leachate are required to comply with the following relevant discharge limits as stipulated in their respective regulations:
1. Sewage discharge standards (please refer to Appendix K1 in the Investor Guide) 2. Industrial effluent discharge limits. (please refer to Appendix K2 in the Investor Guide) 3. Leachate discharge standards (please refer to Appendix K3 in the Investor Guide)
Use of Ozone Depleting Substances (ODS)
ODS are categorised as environmental hazardous substance under the Environmental Quality Act, 1974 (Amendment) 1996. These substances are listed in Appendix L of the Investor Guide. New investments relating to the use of these substances are prohibited, while existing industries
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are encouraged to develop and use substitutes and to change their ODS dependent processes as soon as possible.
Scheduled Wastes Management
Malaysia has developed a comprehensive set of legal provisions related to the management of toxic and hazardous wastes. The regulations are based on the cradle-to-grave principle. A facility which generates, stores, transports, treats or disposes scheduled waste is subject to the following regulations:
1. Environmental Quality (Scheduled Wastes) Regulations 2005; 2. Environmental Quality (Prescribed Conveyance) (Scheduled Wastes) Order 2005; 3. Environmental Quality (Prescribed Premises) (Scheduled Wastes Treatment and Disposal Facilities) Order 1989; 4. Environmental Quality (Prescribed Premises) (Scheduled Waste Treatment and Disposal Facilities) Regulations 1989; 5. Customs (Prohibition of Export) Order (Amendment) (No. 2) 1993; and 6. Customs (Prohibition of Import) Order (Amendment) (No. 2) 1993.
A summary of the environmental requirements on scheduled wastes is available in Appendix M and the list of scheduled wastes is as per Appendix N in the Investor Guide
Incentives
The Investor Guide also describes a number of incentives to encourage proper industrial waste management and pollution control. There are two types of incentives available, focusing on (1) storage, treatment and disposal of toxic and hazardous wastes, as well as for (2) the installation of the pollution control equipment.
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Incentives for the Storage, Treatment and Disposal of Toxic and Hazardous Wastes
To encourage proper industrial waste management, the following incentives are currently in place:
1. Pioneer Status incentive to companies which are principally engaged in an integrated operation for the storage, treatment and disposal of toxic and hazardous wastes. It offers income tax exemption of 70% of the statutory income for a period of 5 years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; 2. Investment Tax Allowance of 60% on the qualifying capital expenditure incurred within a period of 5 years. The allowance can be offset against 70% of the statutory income in each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised; 3. As a further incentive for both the above categories of companies, the Government also extends the current import duty and sales tax exemption scheme for machinery, equipment, raw materials and components.
All facilities for storage, treatment and disposal of toxic and hazardous wastes must be approved by the DoE before the application is made for the incentives.
Incentives for the Installation of Pollution Control Equipment
Under Income Tax Act 1967, Income Tax (Qualifying Plant Allowances) (Control Equipment) Rules 1998, the Government has provided special capital allowance incentive for companies whic