Malaysia - Country Commercial Guide
Environmental Technology
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Market Overview

More than half of Malaysia’s emission sources are directly related to urban settings, with emissions mainly coming from the energy, waste, and industrial processing sectors. Nationally, the electricity and transportation sub-sectors are the most significant contributors to emissions. In 2021, the Malaysian government announced an ambitious goal to achieve carbon neutrality by 2050. To achieve its goals, Malaysia plans to introduce carbon pricing instruments in the form of carbon tax and a domestic voluntary emissions trading scheme. 

The environmental industry in Malaysia is very regulatory driven. Environmental efforts in Malaysia often follow best practices established by the U.S. Environmental Protection Agency (USEPA). The Environmental Quality Act (EQA) of 1974 is the fundamental document at the core of Malaysia’s national environmental policy. The Twelfth Malaysia Plan (12MP), a comprehensive blueprint prepared to form a strategic direction for the allocation of the national budget from 2021 to 2025, includes two environmental areas of focus: 

  • Advancing green growth for sustainability and resilience 
  • Enhancing energy sustainability and transforming the water sector 


Air Pollution Control  

Air pollution in Malaysia falls into three main categories: air pollution due to exhaust gas from motor vehicles, pollution caused by industrial activities, and haze caused by the weather or forest fires. Malaysia uses the Air Pollutant Index (API), which closely follows the USEPA Pollution Standards Index, to monitor air pollution.  There are currently 65 air monitoring stations throughout Malaysia, while the Department of Environment considers options to widen coverage. Opportunities for U.S. exporters  exist in regulated areas such as pollution point sources and analyzing impacts on human health.

Water and Wastewater  

Despite averaging over 1 trillion cubic meters of annual rainfall, some states in Malaysia still periodically experience water supply shortages. Seasonal rainfall distribution, rapid economic growth, urbanization, and migration in certain regions have created imbalances in water supply and demand. Current water supply  depends on freshwater reserves and trapping water in rivers and dams. Unprecedented climate change has further increased the pressure on water resources. Non-revenue water (NRW) lost through leaks in aging pipes, poor infrastructure, and rugged terrain in the more remote parts of the country is another concern for the government. 

Due to urbanization and rapid economic development, providing quality water and sewerage services has become more challenging for the Malaysian government. Water pollution in Malaysia usually originates from sewage treatment plants, manufacturing, agricultural industries, and surface runoffs. The main issues and challenges identified in the wastewater treatment industry are high operational and maintenance costs and environmental threats from non-connected systems such as septic tanks and pour-flush systems primarily found in suburban and rural areas that discharge untreated effluent and sludge directly into water bodies. Opportunities exist for U.S. companies that sell the hardware, software, and analytics for smart water technologies to improve water efficiency and savings.

Waste Management and Recycling  

Waste management in Malaysia is primarily driven by the public sector, supported by a regulatory framework governing the generation, storage, collection, transfer and transport, treatment, and disposal of waste. Management of municipal solid waste (MSW), the fastest growing waste type by volume, falls under the purview of both the Federal and State governments. The two main bodies in Malaysia responsible for policies and regulations implementation and enforcement for solid waste management are National Solid Waste Management Department (JPSPN) and the Solid Waste and Public Cleansing Management Corporation (SWCorp). 

There are 141 solid waste landfills in Malaysia. Of those, 116 are open dump sites, 21 are sanitary landfills engineered for safe composition, and 4 are residual waste landfills. Currently, landfill seems to be Malaysia’s preferred solid waste management option, as waste infrastructure is poorly developed. Local authorities responsible for the management of solid waste are outsourcing the collection and disposal of solid waste to private companies. The national recycling rate reached 33.2 percent at the end of 2022 compared to the 2025 target of 40 percent. At an annual per capita plastic packaging usage of 16.8kg per person, Malaysia outranks much larger nations, including China, Indonesia, the Philippines, Thailand, and Vietnam, in generated waste. Plastic waste management in Malaysia is based on mechanical recycling, landfill disposal, and domestic burning.  

The Government had privatized MSW services, but the high investment cost has required the Government to share a significant portion of the investments in the initial stage. The tipping, or waste disposal, fees in Malaysia are reported to be among the lowest in the world, limiting the sector’s growth. Incineration has often been chosen because it is considered the ‘fastest’ way of getting rid of waste and is believed to be a technology that can address the massive amount of waste generated. 

 Aside from consumer and household waste, commercial waste generated from manufacturing activities is another concern. To overcome the waste produced, the government is encouraging companies to undertake environmental management activities, such as collection, storage, composting, disposal, recycling of toxic and non-toxic waste, and waste-to-energy. There are opportunities for U.S. companies to offer technologies and solutions to handle municipal and industrial waste management, recycling, and hazardous waste management. 

Trade Events  

International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM): October 4-6, 2023

AsiaWater Expo & Forum: April 23 – 25, 2024


Resources of Malaysian Government Authorities  

Department of Environment  

Department of Irrigation and Drainage  

Indah Water Konsortium (IWK)  

Ministry of Environment and Water  

Ministry of Housing and Local Government  

National Solid Waste Management Department   

Sewerage Services Department  

Water Services Commission