TRANFORMATIONINNOVATIONPARTNERSHIP Green Productivity and LCA in Malaysia

TRANFORMATIONTRANFORMATION INNOVATIONINNOVATION PARTNERSHIPPARTNERSHIP

Green Productivity and LCA in Malaysia


Current State of LCA

• In spite of the rapid development and certification to ISO14001, LCA has yet to gain wide spread interest in Malaysia.

• Governmental systematic support to date is confined to international standardisation activities under ISO/TC 207.

• Some universities, research institutions and leading LCA researchers have carried out case studies.


Current State of the EnvironmentCurrent State of the Environment

• Increased incidences of hotter temperatures, severe storms, drought, fires

• Climate change has taken centre stage and is one of the most challenging environmental challenges confronting the global community

• Global average temperatures are expected to rise between 1° to 6° Celcius by end of century as projected by the Inter-Governmental Panel on Climate Change (IPCC)

• Effects are grave and could threaten lives, industries, jobs,sustainable agriculture productions, water supplies and survival of all


Global Environmental AgendasGlobal Environmental Agendas

• Dates back to 1970s and 1980s• Adoption of Agenda 21 by 170 nations at the UN Conference on Environment and

Development in 1992 – a comprehensive action plan for sustainable development• International community responded with over 1,200 multilateral and bilateral treaties and

agreements• Landmark conventions to address issues of climate change and sustainable development

– Basel Convention on Transboundary Movement of Hazardous Wastes;– Montreal Protocol on Use and Disposal of Ozone-Depleting Substances; and– Climate Change Convention

• Malaysia a signatory to all three landmark treaties• Environmental issues and natural resource management - Ministry of Natural Resources and

Environment (NRE). • National Physical Plan (NPP) 2005-2010 - to enhance integrated land use planning, • National Biodiversity-Biotechnology Council (NBBC) - conservation and sustainable utilisation

of biological resources. • December 2004 Asian Tsunami- increased focus on the conservation and rehabilitation of

coastal natural resources, especially mangrove forests• More attention is being put on linking land management and planning with climate change.


Global Initiatives in Promoting Green PracticesGlobal Initiatives in Promoting Green Practices

• Developed countries have put into place regulations and requirements in promoting use of environmentally friendly practices and eco-products

• Requirements becoming increasingly onerous but ensures market acceptance of products

• Examples of global regulations and requirements:– EU’s Restriction of Use of Hazardous Substances (RoHS)– EU’s directive on Waste Electrical and Electronic Equipment (WEEE)– China’s RoHS – requires laboratory testing and labeling requirements– US’s “Resource Conservation Programme”– Japan’s “Basic Policy on Promoting Green Purchasing”


Input - Throughput - Output

INPUTINPUTWater, Energy

THROUGHPUTTHROUGHPUT

OUTPUTOUTPUTProduct

Waste

GP

GPGP

Recovery, Reuse,Reduction Greening the SupplyChain

Recovery, Reuse, Reduction

Greening the Supply Chain

Doing More With Less

Efficient resource utilizationand efficiency improvement Efficient utilization of people Efficient production process

• Efficient resource utilization and efficiency improvement

• Efficient utilization of people• Efficient production process

Waste managementthrough EOP

Waste management through EOP

Doing More With Less

GREEN PRODUCTIVITY COVERAGE


Malaysia’s Initiatives in Sustainable PracticesMalaysia’s Initiatives in Sustainable Practices

• Balanced environmental conservation with economic development• Environmental Quality Act 1974• 7th Malaysia Plan (1996 – 2000) – “protect the environment and ecology so as to

maintain the long term sustainability of the country’s development”• 8th Malaysia Plan (2001-2005) – “promoting the supply and demand for green

products and services”• 9th Malaysia Plan (2006-2010) – “balanced environmental preservation to ensure

sustainable development”• 10th MALAYSIA Plan (2011- 2015) – “Green Technology Policy - provide direction

and motivation for Malaysians to continuously enjoy good quality living and a healthy environment”. RM 1.5 billion is provided to promote Green Technology


Malaysia’s Initiatives in Sustainable Practices – Malaysia’s Initiatives in Sustainable Practices – Waste ManagementWaste Management

• Enactment of the National Solid Wastes and Public CleansingManagement Act 2007

• Promoting 4Rs (Reduce, Reuse, Recover and Recycle)• Reversing the current waste hierarchy


Malaysia’s Initiatives in Sustainable Practices – Malaysia’s Initiatives in Sustainable Practices – Air QualityAir Quality

• Environmental Quality (Clean Air) Regulations being amended to include more stringent controls and parameters

• Environmental Quality (Control of Petrol and Diesel Properties Regulations) 2007 was introduced to provide for the adoption of EURO 2M specifications

• Prohibition of open burning – plantations encouraged to compost felled trees and crops in preparation of land for replanting


Malaysia’s Initiatives in Sustainable Practices – Malaysia’s Initiatives in Sustainable Practices – Renewable Energy and Energy EfficiencyRenewable Energy and Energy Efficiency

• Development of solar, hydrogen and fuel cells – roadmap was formulated• To promote the wider application and utilisation of photovoltaic technology in

buildings, the Malaysia Building Integrated Photovoltaic Technology Application Project (MBIPV) was launched

• New guidelines for energy efficient designs forgovernment buildings were formulated• Energy audit were undertaken in eight energy-intensive industries to identify potential

energy savings


Malaysia’s Initiatives in Sustainable Practices – Malaysia’s Initiatives in Sustainable Practices – Forest ManagementForest Management

• Timber used in manufacture of wood products meet requirementsof Malaysian Timber Certification Scheme inline with Forest Stewardship Council (FSC) Certification

• Ensure balance between environmental preservation and economic benefits


Malaysia’s Initiatives in Sustainable Practices Malaysia’s Initiatives in Sustainable Practices – – Ozone LayerOzone Layer

• Phase out of Chlorofluorocarbons (CFCs) by 2010 in line with the requirements of the Montreal Protocol

• Working towards the phase out plan of the CFC alternative –Hydrochlorofluorocarbons (HCFCs) by 2030


MALAYSIA’S INITIATIVES IN SUSTAINABLE PRACTICES MALAYSIA’S INITIATIVES IN SUSTAINABLE PRACTICES – – MANUFACTURINGMANUFACTURING

• Use of deproteinised natural rubber in the manufacture of rubber gloves to comply with international standards

• Application of engineering and use of advanced materials to manufacture biodegradable plastic products

• Eco-labelling scheme launched by SIRIM Berhad in 2004


Incentives to Encourage Eco-Products Incentives to Encourage Eco-Products and and

Green Supply Chains in MalaysiaGreen Supply Chains in Malaysia

• Inevitable for government and businesses to consider environmental criteria in their organisational purchasing decisions and long-term relations with suppliers

• Consumers have also changed purchasing patterns for more eco-friendly products

• Government provides a range of fiscal incentives including Pioneer Status tax exemption and Investment Tax Allowance for both manufacture of environment friendly products and provision and supply of environment friendly services.


Incentives to Encourage Eco- Products Incentives to Encourage Eco- Products and and


• Pioneer Status (PS) or Investment Tax Allowance (ITA) for companies that provide energy conservation services

• ITA and import duty or sales tax exemption for energy conservation and generating energy from renewable sources for own consumption

• PS or ITA and import duty or sales tax exemptions for companies generating energy from renewable sources. Exemptions also extended to solar photovoltaic equipment and solar heating equipment.

• Tax exemption on income derived from the sale of Certified Emission Reductions




In promoting use of natural gas for vehicles: Import duty and sales tax exemptions on kits and components for conversion

of vehicles to utilise natural gas Reduced road tax from between 25% and 50% for monogas, bi-fuel and dual-

fuel vehicles Accelerated Capital Allowance for installation of equipment related to supply

of natural gas at petrol stations Import duty exemptions for local vehicle assembler and manufacturers on

replacement of diesel engines or chassis fitted with engines for NGV monogas buses and motor vehicles for transportation of goods.




• Exemption of import duty (100%) and excise duty (50%) for franchise holders on new CBU hybrid cars as an incentive to promote Malaysia as a regional hub for hybrid cars.

• PS or ITA for undertaking forest plantation projects




• PS or ITA for setting up of facilities for storage, treatment and disposal of toxic and hazardous wastes in an integrated manner and waste recycling activities of agricultural wastes or by-products, recycling of chemicals and production of reconstituted wood based panel boards or other products of high value-added and use high technology.

• Accelerated Capital Allowance for companies using environmental protection equipment to establish facilities to store, treat and dispose wastes either on-site or off-site and undertake recycling activities




• Import duty exemptions for companies using energy efficient equipment such as high efficiency motor and insulation materials

• Sales tax exemptions for purchasing locally manufactured energy efficient goods such as refrigerators, air conditioners, lightings, fans and televisions.


Incentives to Encourage Eco- Products Incentives to Encourage Eco- Products and and


• Industry Restructuring Guarantee Loan Scheme of a maximum loan of RM50 million for the use of green technology

• Tax incentives for companies generating energy biomass that is renewable and environment friendly


The Way ForwardThe Way Forward

• Initiatives and incentives are plenty but there needs to be a push factor.• Public sector is the prime catalyst as the single largest buyer of products and

services.• Government green purchasing policies can have a more direct effect than

other environmental pressures.• Consumers also have a direct impact in pushing forward the production of

eco-products and greening of a companies supply chain.• Companies need to react positively to make changes to satisfy and retain

their customers.


The Way ForwardThe Way Forward

• Competition from others in the industry• Companies need to standout from others with what they have to offer to remain

competitive• Pressure from competitors could also move a company to adopt greener

practices• Likewise, being the first amongst competitors to go green would be an added

advantage• Think of the life-cycle cost instead of the unit cost • Financial gains from improved environmental performances


Recommendations to Further Promote Greening of Supply ChainRecommendations to Further Promote Greening of Supply Chain

• Develop expertise in supply chain management• Sharing of experience of successes to help build the roadmap for others• Compile and publicise examples of win-win green purchasing strategies as case

studies to promote collaborative green purchasing• Government sector to be the driver. Merit points to companies that implement

environmentally friendly processes in government procurement• Continuous promotion of transfer of technology and cleaner production methods• Awards recognising environmental excellence should place extra emphasis on

developing eco- products and processes.


ConclusionConclusion

• Effective strategy to promote eco-products and green supply chain is through government procurement

• Effects of global environmental challenges provides an impetus for businesses to go green to remain competitive and for consumers to change their consumption patterns towards one that is more environmentally balanced

• Continuous showcasing of products and services to enhance awareness of all stakeholders

Documents

TRANFORMATIONINNOVATIONPARTNERSHIP Green Productivity and LCA in Malaysia