MOVING TOWARDS A CIRCULAR ECONOMY: ARE MALAYSIAN

© Kamarulazizi Ibrahim/2020/019411800899/kamarulazizi

MOVING TOWARDS A CIRCULAR ECONOMY: ARE MALAYSIAN BUSINESSES READY?

Kamarulazizi Ibrahim Ph.D

[email protected]

019 411 8008

mailto:[email protected]

© KAMARULAZIZI IBRAHIM/2020/0194118008/[email protected]


CIRCULAR ECONOMYin a nut shell

An economic system aimed at

eliminating waste and the continual

use of resources.

The reused economy would appear

to be more sustainable than the

current linear economic system.

Reducing the resources used, and

the waste and leakage created,

conserves resources and helps to

reduce environmental pollution.


WHY CIRCULAR ECONOMY IMPORTANT

FOR BUSINESSES IN MALAYSIA?

POPULATION INCREASE

PRESSURING RESOURCES

INCREASE COMPETITIVENESS

MAKE SENSES BUSINESSWISE

INTANDEM WITH SUSTAINABLE

DEVELOPMENT GOALS

SHARED PROSPERITY VISION

2030

GOVERNMENT INCENTIVES


FUNDAMENTAL OF CIRCULAR ECONOMY?

• ‘Take-make-dispose’ economy relied on inputs of cheap and available resources to create conditions for growth and stability.

• Businesses have been hit by an increase in commodity prices that has effectively erased the profit of entire preceding century, our economic model is in need of a new direction.

• The global population growing fast, the middle class is set to top 5 billion by 2030, and many emerging nations will look for increased prosperity.

– This is putting enormous stress on our environment and our resources, which are becoming more difficult to extract.

– Our myopic focus on producing and consuming as cheaply as possible has created a linear economy in which objects are briefly used and then discarded as waste.

http://www.reuters.com/middle-class-infographic


FUNDAMENTAL OF CIRCULAR ECONOMY?

• Nature provide a better alternatives– Just consider the resilience and longevity of

forests: ecosystems in which the seasons are perfectly harmonized with the lifecycle of all species.

– Waste does not exist in nature, because ecosystems reuse everything that grows in a never-ending cycle of efficiency and purpose.

• This concept is called the “circular economy”, an economic system in which no materials are wasted.

– Products are designed and built so that they are part of a value network where reuse and refurbishment on product, component and material level assures continuous re-exploitation of resources.


AN X-RAY OF THE GLOBAL ECONOMYEvery year we transform more than 100 billion tons of raw material into products. Less than a quarter becomes buildings, cars, or other long-lasting things. Less than 10 percent cycles back into the economy. The circular economy movement aims to increase that number and reduce the enormous amount of waste.

Global resources, 2015

in billions of tons

From the Earth

The vast majority of inputs to the economy, 93 billion tons in 2015, are

resources extracted from the Earth: both finite (minerals, ores, and

fossil fuels) and renewable ones (biomass).


CLOSING THE CIRCLEUse less, keep things in use longer, recycle endlessly—a circular economy will take a

range of strategies. In the cradle-to-cradle vision, all products are ultimately broken down

either to “technical nutrients,” which are made into new products, or biological ones,

which return to the soil. Waste is a design flaw. As in nature, it doesn’t exist.

Use lessRenewable energy replaces fossil fuels; rental or sharing businesses serve more people with fewer products.

RENEWABLERESOURCES

RENEWABLEENERGY

FINITERESOURCES

Design wiselyMachines and other productsare designed to be long-lasting and easy to repair—or ephemeral and easy to break down into basic components.

Materialsbroken down into basic nutrients

Componentsremade to be as good as new

Productsused by manypeople over timeBiomass pro

cessed toretrieve nutrientsand energy Discarded

biomassused in newproducts

Products keptin service aslong as possible

MINIMALDUMPING AND

POLLUTIONNo wasteAll nutrients flow in cycles. Almost nothing is released as a pollutant or dumped in a landfill.


Circular economy is an economic system aimed at eliminating waste and the continual use

of resources. The reused economy would appear to be more sustainable than the current

linear economic system. Reducing the resources used, and the waste and leakage

created, conserves resources and helps to reduce environmental pollution.


The circular economy includes products, infrastructure, equipment and

services, and applies to every industry sector. It includes ‘technical’

resources (metals, minerals, fossil resources) and ‘biological’

resources (food, fibres, timber, etc.) While the traditional linear

economy, which has a ‘take, make, dispose’ model of production.


Circular business models can be defined as business models that

are closing, narrowing, slowing, intensifying, and dematerializing

loops, to minimize the resource inputs into and the waste and

emission leakage out of the organizational system.


BUSINESS MOTIVATION• To explore how businesses can use the circular economy to drive

arbitrage opportunities across complex, global supply chains.

• While examples of circular business models are emerging,

significant materials leakages still persist. To provides practical

guidance on how businesses can address these leakage points to

capture the value of the circular economy together with their

partners—whether suppliers or wholesales/retailers—and

consumers.

• To make practical steps towards capturing this opportunity

through the facilitation of pure materials flows, an important first

move in the shift to a new economic model.

• The circular economy provides a framework to both challenge and

guide us as we rethink and redesign our future.



POSITION OF MALAYSIA ON CE

https://www.circularity-gap.world/2020

Our world is now only 8.6% circular


MAKING SENSE OF THE CIRCULAR

ECONOMY: THE 7 KEY ELEMENTS


Account for the systems perspective during the design process, to use the right

materials, to design for appropriate lifetime and to design for extended future use.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

Fairphone designs modular mobile phones by using fair materials, good working

conditions to enable the reuse and recycling of parts. The Fairphone 2, released in 2016,

has anchored the company's niche position in the market.

CORPORATION

Desso is an international designer and producer of circular carpet tiles and broadloom.

The company designs its own products and has developed innovative new techniques

that allow its products to be collected and recycled or reused.

CIRCULAR JOB

An architect is responsible for designing buildings and by extension for the materials

used during a building’s construction, its energy efficiency during the use phase and the

potential for material recovery when it is demolished. An architect can thus contribute to

the circular economy by ‘designing for the future’.

DESIGN FOR THE FUTURE

https://circle-lab.com/knowledge-hub/modular-smartphone

https://circle-lab.com/node/1778


INCORPORATE DIGITAL TECHNOLOGY

Track and optimise resource use and strengthen connections between supply chain

actors through digital, online platforms and technologies that provide insights.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

Floow2 is the first online, asset-sharing marketplace for companies. The platform

reduces costs and increases product utilisation by matching supply and demand.

CORPORATION

DHL is a leading, global logistics service provider. The company is experimenting with

integrating crowd-based logistics, drones and “parcelcopters” into its logistics systems

and delivery chains.

CIRCULAR JOB

The data analyst makes sense of large amounts of information by means varying from

simple data aggregation to complex data mining. The data analyst’s occupation involves

the ‘incorporate digital technology’ strategy and thus allows for smart systems and

technology integration in the circular economy. This job often requires tertiary education

in relatively new fields of data science and computer engineering.

https://circle-lab.com/knowledge-hub/digital-marketplace-sharing-equipment-and-services

https://circle-lab.com/knowledge-hub/resource-efficient-logistics-using-canals-and-couriers


PRESERVE & EXTEND WHAT’S ALREADY MADE

While resources are in-use, maintain, repair and upgrade them to maximise their lifetime

and give them a second life through take back strategies when applicable.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

ACTronics remanufactures automotive electronic components, based on innovative and

cost-effective processes. The company's rapid growth demonstrates the viability of its

business model.

CORPORATION

Royal Philips is a global healthcare company that aims to make the world healthier and

more sustainable through innovation. The company is starting to focus on

remanufacturing and refurbishing programs for medical imaging equipment.

CIRCULAR JOB

The appliance technician contributes to the circular economy by extending the lifetime of

products. By embodying one of the strategies of the circular economy, ‘to preserve and

extend what’s already made’, all repair and maintenance jobs are considered circular.

https://circle-lab.com/knowledge-hub/remanufacturing-electronic-auto-parts

https://circle-lab.com/knowledge-hub/remanufacturing-medical-equipment


PRIORITISE REGENERATIVE RESOURCES

Ensure renewable, reusable, non-toxic resources are utilised as materials and energy in an

efficient way.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

SkyNRG is the global leader in sustainable aviation fuels and has pioneered new supply

chains and production processes. It has supplied fuel to over 25 airlines, on all

continents.

CORPORATION

Vitens is the largest drinking water company in the Netherlands and is pioneering

innovative approaches to ensure a sustainable and continued supply of drinking water to

the country.

CIRCULAR JOB

The solar panel installer works within the energy sector to promote the use of solar as a

renewable energy source. The job contributes to the circular economy by ‘prioritising

regenerative resources’, the first strategy of the circular economy.

https://circle-lab.com/knowledge-hub/biobased-aviation-fuel

https://circle-lab.com/knowledge-hub/recycling-residues-drinking-water-treatment


USE WASTE AS A RESOURCE

Utilise waste streams as a source of secondary resources and recover waste for reuse and

recycling.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

Ioniqa has developed a game-changing technology to produce high-grade raw materials

from PET waste. It was awarded the 2016 Accenture Innovation Award in the circular

economy category.

CORPORATION

Renewi, formed from the merger of Shanks and Van Gansewinkel, is a leading waste-to-

product business that operates across nine countries. The company focuses on

transforming waste materials into a wide range of useful products.

CIRCULAR JOB

The recycling operative’s job consists of sorting through recyclable waste and separating

materials to be recovered. This sorting and separating constitutes an essential element in

the recycling process, which involves the ‘use waste as a resource’ strategy, and thus

presents itself a circular job. Day to day activities of the recycling operative include

physical labour and machine handling such as forklift driving.

https://circle-lab.com/knowledge-hub/recycling-plastics

https://circle-lab.com/knowledge-hub/recycling-waste-products


RETHINK THE BUSINESS MODEL

Consider opportunities to create greater value and align incentives through business

models that build on the interaction between products and services.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

Bundles has a trailblazing product-as-a-service model by leasing Miele appliances. This

promotes unique customer engagement and provides and incentivises product life-

extension.

CORPORATION

Auping is a global mattress and bed manufacturer that is aiming to produce fully circular

products. The company has plans to move towards pay per use leasing models for its

beds to retain ownership of its products and raw materials.

CIRCULAR JOB

The leasing process manager is responsible for the coordination of the external service

partners distributed across market segments. By contributing to the workings of a

product as a service model, the leasing process manager contributes to the circular

economy through the ‘rethinking the business model’ strategy.

https://circle-lab.com/knowledge-hub/subscription-based-payment-use-sensors-household-washing-equipment

https://circle-lab.com/knowledge-hub/leasing-model-fully-recyclable-beds


COLLABORATE TO CREATE JOINT VALUE

Work together throughout the supply chain, internally within organisations and with the

public sector to increase transparency and create joint value.

PUT INTO PRACTICE

DISRUPTIVE STARTUP

Dutch aWEARness focuses on circular business-to-business workwear. It aims to

increase transparency and information sharing in order to strengthen cooperation

throughout the entire textile supply chain.

CORPORATION

DSM is a multi-national, chemical company that is active in health, nutrition, and

materials. The company engages in frequent collaboration internally to develop

innovative solutions, and also engages in a variety of partnerships with academia and the

public sector.

CIRCULAR JOB

The director of a trade association manages a membership organisation composed of

multiple companies within a specific industry. The director can support the circular

economy by encouraging greater collaboration, knowledge sharing, and networking

between companies. As such, the director can employ the ‘collaborate to create joint

value’ strategy in order to contribute to the circular economy.

https://circle-lab.com/knowledge-hub/pay-use-recyclable-textiles

https://circle-lab.com/knowledge-hub/joint-industry-venture-biofuels






SDG AND BUSINESS


SDG AND CIRCULAR ECONOMY

• The Sustainable Development Goals (SDGs)

– have been described as “the blueprint to achieve a better and more sustainable future for all” by 2030. The seventeen goals and associated 169 targets are increasingly being adopted by both public and private sector actors across the globe, as a framework for organising and pursuing sustainability initiatives.

• Circular Economy (CE) is an alternative economic

framework approach for achieving local, national, and

global sustainability.

– Governments, cities and not least many large

multinational companies actively exploring ways to shift

to circular economy practices.


CIRCULAR ECONOMY AND SDG

• The concept of a circular economy,

– an economy in which waste and pollution do not exist by

design, products and materials are kept in use, and

natural systems are regenerated provides much promise

to accelerate implementation of the 2030 Agenda.

• The circular economy holds particular promise for

achieving multiple SDGs, including SDGs

– 6 on energy,

– 8 on economic growth,

– 11 on sustainable cities,

– 12 on sustainable consumption and production,

– 13 on climate change,

– 14 on oceans, and

– 15 on life on land.

• Social and economic prosperity within the natural capacity

of our planet


CIRCULAR ECONOMY AND THE 17 SDG: INDICATIVE PRIORITIES

SDGs with

weak or no link

to CE practices


A PARADOX

FOR LAND

OF PLENTY


Malaysia’s Composition of Exports 2016

MIT Media Lab


Malaysia’s Export markets 2016MIT Media Lab





Circular Economy: The Way Forward for Palm-Based Industries MIDA Insights - Industry Malaysia is the second largest producers and exporters of palm oil in the

world, supported by 4.49 million hectares of oil palm cultivation which produces 17.73 million

tonnes of palm oil.



MOVING TOWARDS A CIRCULAR ECONOMY:

ARE MALAYSIAN BUSINESSES READY?


PALM OIL AND PALM

BASED PROUCTS

REFINED PETROLEUM PRODUCTS

E & E PRODUCTS

CIRCULAR ECONOMY IN TOP THREE

EXPORT BUSINESS IN MALAYSIA


PRESENT POSITION OF

MALAYSIAN BUSINESSES


TECHNOLOGICAL READINESS


3Rs and CE POLICY DEVELOPMENT

SCP sustainable consumption and production


While governments can provide

incentives and support ‘replacement’ as

4th R (reduce, reuse, recycle, replace),

It is up to the private sector to introduce

innovative solutions, or otherwise facing

the consequence of being left behind.



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MOVING TOWARDS A CIRCULAR ECONOMY: ARE MALAYSIAN