Malaysia has one of the highest plastic packaging consumptions among Southeast Asian countries. However, the amount of plastic pollution and the lack of capacity to manage plastic waste effectively has led Malaysia to adopt a mandatory EPR for plastic packaging in 2026. Under the federalised and privatised system of solid waste management in Malaysia, policy challenges and opportunities in implementing the said EPR were discussed and analysed. Documents and reports between the years 2007 and 2021 endorsed by government agencies, brand owners and associations were used and analysed using thematic analysis. Data from survey feedbacks from consumers were also analysed to supplement the discussion. Even though there are many gaps in this area, only legislation and institutional components were discussed in this study. Findings from the consumer survey showed that 95.4% of the respondents were supportive of the implementation of EPR programme and 80.3% agreed for it to be carried out on a mandatory basis. However, the federalisation system and related Act only covers certain states in Malaysia and therefore insufficient to support the establishment of a nationwide EPR policy. Referring to federal, state, and local governments’ structure of governance, there is separation and overlapping of powers between these agencies portraying a disjointed approach in managing solid waste, thus creating grey areas in certain aspects of solid waste management. This sparked concerns among producers, brand owners and relevant NGOs especially in the view of implementing a mandatory EPR. In conclusion, the existing legislations and institutional set-up form a solid foundation for an adoption of EPR policy in Malaysia. However, harmonisation and streamlining of these elements, having a clearly defined roles of the stakeholders and taking consumer behaviours into policy considerations are vital in ensuring the effectiveness and positive impacts of EPR for sustainable plastic packaging management in Malaysia.