Penang: Against the tide
By Tan Zhai Yun / The Edge Malaysia
01 Jan 2026, 12:00 am

Penang is the first state to ban single-use plastic bags and mandate the sourcing of renewable energy for new buildings

This article first appeared in The Edge Malaysia Weekly on December 29, 2025 - January 4, 2026

Penang became the first state to implement a full ban on single-use plastics (SUP) this year, setting it apart from states like Selangor, where restrictions apply only on weekends. The northern state also set another record by requiring all new commercial and industrial buildings, starting in 2025, to source renewable energy (RE).

The implementation of these policies — especially on SUP — is difficult and not perfect, but the Penang Green Council (PGC), a government-linked company tasked with these responsibilities, believes that these ambitious policies are necessary to keep the state’s businesses competitive.

“Penang people accepted it. That’s surprising to me as well, because Penang people are a bit rebellious,” jokes Datuk Lawrence Lim, who is on PGC’s board of directors.

This rebellious spirit, however, is also why the state has gone ahead with these rather ambitious policies. But it wasn’t an easy process.

“It took a very long time. For instance, the plastic-free journey started in 2009. It was a very bold action, and it was good to have strong leaders with political will [to push it through.] We started by charging 20 sen, and increased it to RM1 in 2021. The state also announced that from Monday to Wednesday, no SUP will be offered,” says Josephine Tan, general manager of PGC.

“This year, our state officially announced no SUP every day. It was undeniably a shock for people, but this is not new for most of our supermarkets. We received less feedback than usual on this.”

It has been 16 years since Penang started on this journey, during which time public awareness campaigns were organised to educate the people on why SUP contributes to pollution and climate change. It also involves engaging with plastic manufacturers and introducing alternative materials — such as biodegradable plastic — to the market.

“I think the plastic manufacturers should be aware that they should look for other ways of doing business because [the market] is changing. The whole world is talking about moving away from plastic use,” says Lim.

One of the alternatives is “self-destructing” plastic produced by Polymateria Ltd under the Lyfecycle brand, which was used at the Penang Green Summit in October. The company claims that the product is fully recyclable and biodegradable under natural conditions (more than 90% in less than a year). Another alternative presented at the Summit exhibition was Binsen Green’s compostable packaging made from plant fibre waste.

The next step for PGC is to continue engaging stakeholders to create a framework on SUP next year.

“When you work with people like the hawkers, we don’t want them to be disadvantaged, because once you want to implement something, there must be a solution or alternative for them … This whole framework is to sit down and understand where they are at, guide them along and come up with a solution together,” says Lim.

It is hoped that with the ban and introduction of more sustainable materials, there can be more demand for these alternative solutions, which will drive the prices down.

Aiming for green energy

The Penang Energy Framework (PEF) was launched last November, and it outlines the state’s RE and energy efficiency (EE) targets. By 2030, the state hopes to generate 10% of RE and reduce energy intensity by 25%, starting from government-owned buildings.

This will be achieved via measures such as mandating all new government-owned buildings to source at least 5% of energy needs from RE by 2025, while existing ones should source 5% of RE.

New commercial and industrial buildings have to source between 2% and 25% of RE or 75% from rooftop solar installations by 2025, depending on their tariff category. New commercial buildings bigger than 4,000 sq m have to source at least 2% RE from 2025.

“I think we are the first in the whole country to mandate RE installation. With the support of the state government and local authorities, we bind this requirement to the building plan submissions,” says Baylon Tham, director of PGC.

There are also targets for building energy intensity (BEI) for new office, commercial, hotel and hospital buildings.

“Our target of 10% is lower than the national target because Penang is small, and we don’t have a lot of land. We can’t do hydropower, so we only have solar and biomass. We wanted to have a state-level policy to show the national government that we are taking steps to implement their target,” says Ng Shin Wei, programme manager of PGC.

These mandates were introduced because there are now enough incentives to make RE adoption possible. The net energy metering (NEM) scheme, says Ng, transformed the whole landscape in 2017. The NEM was replaced with the Solar Accelerated Transition Action Programme this month.

“We are piggybacking on this trend. The national level has these incentives, so the state comes in to show support and give a bit more push,” says Ng.

It is hoped that new building owners will ensure their buildings have the right design, so that they do not need to use huge amounts of energy to cool it down.

“Compared with other states, the built environment is a challenge for us in Penang, because most of the buildings in the island are high rise, so roof space is a constraint. Architects and engineers will have to think about how to minimise energy consumption and maximise the roof area to install solar panels,” says Tham.

Encouraging green manufacturing and tourism

The manufacturing and tourism sectors are huge contributors to Penang’s economy. Both sectors are also facing an increasing demand for greener practices from consumers and investors. Therefore, PGC launched the Penang Green Industry Programme (PGIP) and Penang Green Hotel Programme to encourage the transition among industry players.

The PGIP aims to turn Penang into a green manufacturing hub by providing capacity-building programmes, advisory support, networking events and partnerships between multinational corporations (MNC) and small and medium enterprises (SMEs).

This is essential to ensure SMEs do not get cut out of MNC’s supply chains for failing to abide wth ESG standards, says Ng. “We are still trying to visualise [this partnership] and make it concrete.”

The team is currently engaging with stakeholders to gauge what resources are needed. “If we achieve a green manufacturing hub, then we can attract a lot of green investments and create green job opportunities,” says Tan.

At the Penang Green Summit, the PGC signed a memorandum of understanding with Alliance Bank Bhd to introduce a Climate Mitigation Fund, which is a blended financing platform targeting Penang’s SMEs in the manufacturing sector. The fund is meant to support SMEs in strategic industries like electrical and electronics to adopt ESG practices.

The green hotels programme was introduced in response to growing demand from tourists and corporates for environment-friendly accommodation. It focuses on energy and water conservation, waste management and green procurement and is implemented through sustainability standards, pilot projects and stakeholder collaboration.

“We have the metrics for Penang green hotels ready. By next year, we can launch the programme with a playbook for industry players. We will eventually come up with a module to guide our green hotels, focusing on those with three stars and above,” says Tan.

This push for sustainability across sectors reflects the priorities of Penangites, as identified in a 2017 survey conducted by PGC, says Ng.

In recent years, many Penang civil society organisations have raised concerns about the dangers of overdevelopment on the island, especially from land reclamation. This would damage the sea bed and could impact fishermen’s livelihoods.

When asked, the PGC committee, while not involved in these projects directly, emphasises the importance of sustainable development.

With the introduction of the Virtual Island of Penang platform, which uses real-time data, satellite images and artificial intelligence to improve city management, it is hoped that this data can improve land-use planning in the state as well, taking into consideration environmental factors, the committee says.

“We are making progress now and we are involving ourselves in the planning task force as well. Hopefully, this is a step for us to contribute towards sustainable development,” says Tan.