Officials of APEC countries discuss Thailand’s Bio-Circular-Green (BCG) Economy concept in a dedicated session. (Photo: Asia-Pacific Economic Cooperation 2022)

Circular Economy for ASEAN’s Sustainable Future


Patree Witoonchart and Kannika Thampanishvong draw lessons from the implementation of Thailand’s Bio-Circular-Green Economy and how ASEAN countries can envision their circular economies.

How can countries simultaneously sustain growth while preserving the planet? Amidst the multitude of solutions, the “circular economy” idea has become increasingly popular. Is this truly part of the solution, and how can ASEAN countries make use of its purported benefits? 

In its latest development plan, Thailand envisions a “Bio-Circular-Green Economy” (BCG) model for its sustainable future. What is a circular economy? A circular economy is a “closed-loop” model of production and consumption based on the principles of waste elimination, product/ material circulation, and nature regeneration. The “circular economy” concept directly opposes the unsustainable “take-make-dispose” linear industrial model. This leads to reduced greenhouse gas emissions and creates new market opportunities within the closed-loop model. Without circularity, valuable resources are needlessly wasted. Thailand recognises the model’s potential to create new industries and jobs, and generate economic value.

Thailand’s Circular Economy Model

As part of the Bangkok Goals of the Asia-Pacific Economic Cooperation (APEC) in 2022, Thailand unveiled its Bio-Circular-Green (BCG) Economy, an alternative national development model that aims to drive sustainable growth and reduce carbon emissions by using technology and innovation to capitalise on the country’s existing strengths in natural resources and cultural diversity. The four strategic sectors were chosen for their enormous economic potential, namely (1) agriculture and food, (2) energy, materials, and biochemicals, (3) wellness and medicine, and (4) tourism and the creative economy.

Many of Thailand’s industries generate waste and by-products from the production process. Combining technology, innovation, and entrepreneurship can turn such waste and by-products into high-value forms like those at the top of the value creation pyramid. Smart farming, for example, uses agricultural technologies to increase agricultural efficiency, and eliminate the need for harmful chemicals. This leads to higher-quality ingredients that can be further processed into premium health supplements. This model of value creation also applies to products and waste, which is one of the keys to implementing circularity in the economy.

Circularity under Thailand’s BCG Economy Plan

Under Thailand’s BCG broad strategic sector umbrellas, the sub-sectors with the high potential for circularity are identified under the BCG in Action: Circular Economy (2020) plan such as plastics, food and agriculture, and building materials. The visions for these three sectors are in response to current shortcomings and the potential for new, innovative markets. In the plastics industry, less than a quarter of plastics are currently recycled and Thailand consistently ranks as one of the top global contributors to plastic pollution. 

The BCG Economy plan sets an ambitious aim to recycle 100% of polyethylene terephthalate (PET) and polyethylene (PE) plastics by 2030 through mechanisms such as allocating funds to create “waste hubs”, support for start-up businesses in recycling, expansion of extended producer responsibility measures, and amendments to laws restricting the use of recycled plastics in food packaging. Such a recycling goal, if achieved, could also help Thailand save on energy costs. 

The food and agricultural sectors face two main problems: open agricultural burning, and food loss and waste (FLW). Farmers burn crops for various reasons, such as labour shortage and ease of harvest, resulting in substantial air pollution and carbon emissions. FLW occurs at every stage of the food production and distribution process, resulting in a 30% loss rate. Both problems can be addressed by applying circular economy principles: the BCG Economy Plan aims to eliminate agricultural burning, cut food loss from 30% to 10%, and halve food waste. The mechanisms include amending laws to enable the recovery of useful resources from industrial waste, and creating financial incentives to turn agricultural residue into resources. 

In the building materials industry, the BCG Economy Plan focuses on integrating circularity at all stages throughout the whole supply chain, from design to materials procurement to construction and repair. Mechanisms for supporting this transition under the BCG plan include developing a digital infrastructure for building materials, supporting the innovation of environmentally friendly materials, and driving sustainable urbanisation structure with regards to city planning.

Despite its significant potential, there remain challenges to the adoption of circular economy in Thailand. There are issues such as low level of awareness and cooperation in waste management behaviours, institutional and regulatory barriers, and limited markets for circular economy products. The BCG roadmap was created with these issues in mind and contains many mechanisms for facilitating solutions, though its effectiveness remains to be seen.

Thailand’s Bio-Circular-Green Economy model balances environmental and economic objectives in the development process. (Photo: National Science and Technology Development Agency, Thailand)

The Way Forward for ASEAN Economies 

At the national level, ASEAN countries are prioritising green and sustainable growth. Every nation has produced some form of national-level policies with this objective, with countries such as Vietnam and Indonesia explicitly prioritising the circular economy as a strategy. At the regional level, ASEAN has also taken steps to realise a circular economy. At the 20th ASEAN Economic Community (AEC) Council Meeting, a Framework for Circular Economy was adopted to guide ASEAN in achieving its long-term goals of a resilient economy, resource efficiency, and sustainable and inclusive growth. 

With this ambition in mind, ASEAN countries can take cues from Thailand’s BCG initiative to guide their own circular economy development plans. Thailand has identified five important conditions for success. First, the plan will be driven through key projects and focus sectors in order to gather on-the-ground information and act as models for the future upscaling of the concepts. Second, circular economy solution platforms should be created to facilitate capacity-building in innovation and technology, and connect a network of target groups. Third, businesses, society, and the general public should be aware and educated on the concept of sustainable consumption and production. Fourth, incentives, laws, and regulations must support the circular economy market. Fifth, there should be cooperation at all levels and in every sector of society including international cooperation. Notably, as the BCG is specifically designed to complement and bolster Thailand’s competitive advantages, each country must customise the plan to its own strengths, needs, capacities, and challenges. 

Plastics management can serve as an excellent starting point for many ASEAN countries that face similar challenges to Thailand. In a circular economy framework, plastics are designed with long lifespans. Processes such as repair, sharing, efficient collecting, and recycling are integrated into every step. Such a form of plastics management can serve as a starting model for other sectors of the economy. Tools such as extended producer responsibility and regulatory amendments can aid this transition. At the regional level, ASEAN can establish voluntary technical standards for plastics which will facilitate recycling across different countries. They can also mandate the substitution or removal of harmful plastic additives.

In conclusion, the circular economy is an important component for achieving sustainable economic growth and mitigating carbon emissions in ASEAN. Thailand’s BCG initiative provides a grand vision for realising a circular economy in the country and, potentially, for the region. However, every country has its own unique strengths and challenges, and it may be necessary to start with different sectors depending on each country’s circumstances. Lastly, while positive steps have been taken on national and regional levels, more needs to be done to ensure that good plans and intentions come to fruition.

Editor’s Note:
This is an adapted version of an article from ASEANFocus Issue 1/2023 published in March 2023. Download the full issue here.

Patree Witoonchart is Researcher at the Thailand Development Research Institute (TDRI).

Kannika Thampanishvong is Senior Research Fellow at the Thailand Development Research Institute (TDRI).