Transcript Promotion of Eco-Products and Green Supply Chains and Beyond

Green Productivity and LCA
in Malaysia
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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.
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Current State of the Environment
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Increased incidences of hotter temperatures, severe storms, drought, fires
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Climate change has taken centre stage and is one of the most challenging
environmental challenges confronting the global community
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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)
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Effects are grave and could threaten lives, industries, jobs,sustainable
agriculture productions, water supplies and survival of all
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Global Environmental Agendas
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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.
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Global Initiatives in Promoting Green Practices
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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”
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GREEN PRODUCTIVITY COVERAGE
Input - Throughput - Output
GP
Doing More With Less
Waste
Wastemanagement
management
through EOP
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Water, Energy
INPUT
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Waste
THROUGHPUT
GP
Doing More With Less
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Malaysia’s Initiatives in Sustainable Practices
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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
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Malaysia’s Initiatives in Sustainable Practices –
Waste Management
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Enactment of the National Solid Wastes and Public Cleansing
Management Act 2007
Promoting 4Rs (Reduce, Reuse, Recover and Recycle)
Reversing the current waste hierarchy
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Malaysia’s Initiatives in Sustainable Practices –
Air Quality
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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
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Malaysia’s Initiatives in Sustainable Practices –
Renewable Energy and Energy Efficiency
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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
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Malaysia’s Initiatives in Sustainable Practices –
Forest Management
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Timber used in manufacture of wood products meet requirements
of Malaysian Timber Certification Scheme inline with Forest Stewardship
Council (FSC) Certification
Ensure balance between environmental preservation and economic benefits
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Malaysia’s Initiatives in Sustainable Practices
– Ozone Layer
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Phase out of Chlorofluorocarbons (CFCs) by 2010 in line
with the requirements of the Montreal Protocol
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Working towards the phase out plan of the CFC
alternative –Hydrochlorofluorocarbons (HCFCs) by 2030
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MALAYSIA’S INITIATIVES IN SUSTAINABLE PRACTICES
– MANUFACTURING
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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
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Incentives to Encourage Eco-Products
and
Green Supply Chains in Malaysia
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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.
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Incentives to Encourage Eco- Products
and
Green Supply Chains in Malaysia
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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
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Incentives to Encourage Eco-Products
and
Green Supply Chains in Malaysia
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 dualfuel 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.
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Incentives to Encourage Eco-Products
and
Green Supply Chains in Malaysia
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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
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Incentives to Encourage Eco-Products
and
Green Supply Chains in Malaysia
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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
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Incentives to Encourage Eco-Products
and
Green Supply Chains in Malaysia
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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.
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Incentives to Encourage Eco- Products
and
Green Supply Chains in Malaysia
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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
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The Way Forward
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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.
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The Way Forward
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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
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Recommendations to Further Promote Greening of Supply Chain
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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.
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Conclusion
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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
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