The rise of circular economy in Southeast Asia
How ASEAN, the fifth largest economy in the world, is reimagining prosperity through sustainability
In Indonesia, commuters can pay for bus rides with plastic bottles, promoting recycling while increasing public transport access.
Local communities in the Philippines sell discarded fishing nets to Interface for use in carpet tiles, turning ocean pollution into profit.
The lighting giant Philips provides energy-efficient lights to office landlords in Singapore, sharing in the savings.
Southeast Asia is witnessing a transformative shift towards a circular economy, where innovative practices reshape business and public service operations.
What seems to be unrelated initiatives are all contributing to a new business model that's reshaping the industry by storm. Welcome to the circular economy.
This approach reimagines the traditional "take-make-dispose" system, focusing on minimising waste and maximising resource efficiency instead.
The critical role of circular economy
Though the concept lacks a specific origin or single founder, its core principles—cradle-to-cradle design, industrial ecology, and biomimicry—have been in practice since the 1970s.
Visionaries like American designer Bill McDonough, German chemist Michael Braungart, and Swiss architect and economist Walter Stahel helped popularise these ideas.
Excessive use of natural resources isn't just unsustainable—it also causes serious environmental issues like soil degradation, water pollution, waste generation, and increased carbon emissions.
If no action is taken, global demand for natural resources is projected to soar to 130 billion tonnes by 2030, up from 50 billion in 2014. That’s more than 400% overuse of Earth's capacity!
— The World Business Council for Sustainable Development
Commodity prices are rising, resources are finite, and economic growth must be decoupled from resource consumption.
This is why in Asia, the world's manufacturing hub, the potential for adopting a circular economy model is massive.
The ambitious agenda
Southeast Asia’s rapid economic growth and rich natural resources are now at a crossroads.
Policymakers are beginning to recognise the urgent need for a more sustainable economic model.
However, like a jigsaw puzzle with pieces scattered across different countries, these early efforts lacked cohesion.
Given Southeast Asia's tightly knit economic fabric, it's crucial to weave these different threads into a unified tapestry of circular economic policies at the regional level.
Make no mistake—this transition is no small feat. It doesn’t only demand cutting-edge technologies, but also substantial capital, innovative business models, and behavioural change.
You can’t ask a sprinter to suddenly switch to marathon running overnight.
The change is fundamental and far-reaching.
ASEAN framework for circularity
In the heart of Southeast Asia, a circle is forming—not only of people, but of nations united by a vision of sustainability.
The ASEAN Framework for Circular Economy surfaces as a guiding light, forging a path towards a future where resources flow in continuous cycles.
The essence of ASEAN's circular economy framework is that it’s not just a policy—it's a paradigm shift.
It reimagines how ten diverse nations can collectively thrive without depleting the very foundations of their existence.
The framework paints a picture of an ASEAN where innovation dances with tradition, where digital technologies harmonise with age-old wisdom, and where financial systems pulse with the rhythm of environmental stewardship.
It's a bold vision: one that challenges the linear thinking that has long dominated economic models. It invites us to see the region's economy not as a straight line rushing towards an unsustainable future, but as a circle—complete, sufficient, and endlessly renewing.
Challenges in adopting circular economy
While the concept of circularity has gained momentum, the absence of a robust regulatory framework and incentives has left many potential circular initiatives stuck at the starting line.
In some places, well-designed hygiene and consumer protection laws inadvertently throw a spanner in the works of recycling and reusing materials. It's as if we're trying to fit square pegs into round holes—our current systems simply aren't designed for circularity.
Moreover, the lack of standards for recycled and remanufactured products can lead to a wild west of quality and performance, potentially undermining consumer confidence in circular goods.
Embracing circularity also means grappling with tough trade-offs.
For example, the Extended Producer Responsibility (EPR) is a policy where the burden of waste management is shifted to the producers. Under EPR, producers are held accountable for their products throughout their lifecycle, encouraging better recycling practices.
While this might sound great on paper, it may deter suppliers from smaller markets due to compliance costs.
This could potentially lead to higher prices for consumers and undermine the accessibility that EPR seeks to promote.
For consumers, circular options can be practical but potentially inconvenient. Yet, consumer acceptance is the keystone of scaling circularity.
It's influenced by the quality of recycled goods, the appeal of circular innovations, and perceptions of second-hand or upcycled products.
In essence, we're not just redesigning our economy; we're reimagining our relationship with the things we buy and use.
International collaboration
As a global phenomenon, the circular economy transition in Southeast Asia is gaining international support.
🔄 💼 ASEAN Circular Economy Business Alliance (ACEBA)
This ASEAN-centric initiative catalyses leadership and action for the regional circular economy transition, championing a principles-based approach to business action.
♻️💡 SWITCH-Asia
The European Union, through initiatives like the SWITCH-Asia Programme, is actively supporting ASEAN countries in their shift towards a low-carbon, resource-efficient, and circular economy.
🤝🌿 Enhanced Regional EU-ASEAN Dialogue Instrument (E-READI)
E-READI is an EU-funded development cooperation programme that facilitates dialogue forums between the EU and ASEAN in priority policy areas of joint interest.
This initiative contributes to organising events like the ASEAN Circular Economy Forum, which emphasises cross-sector collaboration in driving ASEAN’s green transition and overcoming the setbacks faced by circular innovators.
🇪🇺🌍 EU Green Deal
The EU is leveraging its Green Deal approach to support ASEAN's transition.
Through this, the EU is committed to supporting the transition of countries to a low-carbon, resource-efficient and circular economy while promoting sustainable production and consumption (SCP) patterns within Asia and greener supply chains between Asia and Europe.
Role of civil society
From grassroots movements to courtroom battles, civil society organisations and engaged citizens are the unsung heroes pushing for a greener, more circular future.
In Indonesia, activists played a crucial role in the passage of the 2009 Environmental Protection and Management Law—a landmark piece of legislation that emerged from grassroots efforts led by NGOs like the Indonesian Center for Environmental Law (ICEL) and WALHI.
The influence of civil society extends beyond legal victories; it taps into the wisdom of generations past.
There’s an economic principle called “The Lindy Effect” which suggests that the older something is, the longer it's likely to stick around in the future.
In this context, traditional practices in Southeast Asia often embody circular economy principles like reuse, repair, and regeneration.
Think about it: who hasn’t been scolded by their mum for losing a perfectly good Tupperware?
These age-old habits form the foundation of circularity, reminding us that sustainability is not just a modern concept but a practice deeply rooted in our cultural heritage.
As we adopt behavioural changes to align with circular economy strategies, we reinforce practices that have stood the test of time.
The more we embrace these principles, the more likely they are to persist across generations.
By bridging ancient wisdom with modern necessity, civil society is not just advocating for change; it's ensuring that the circular economy becomes an integral part of our daily lives—just like keeping that trusty Tupperware for years on end.
If you haven’t yet, join the circle by subscribing to our newsletter. Found this issue interesting? We’d appreciate it if you could help us widen our circle by sharing our newsletter with your social networks. Comments are appreciated and welcome.