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PRN targets met but five producers miss obligations

Packaging recovery and recycling data shows that the total obligation for all producers last year has been met, according to the latest figures.

Preliminary figures from the Environment Agency (EA) show that the total amount of PRN/PERNs issued by accredited reprocessors and exporters up to the end of the compliance period on 31 January 2013 was sufficient to meet the total obligation for all registered producers. But five producers are being investigated for failing to comply.

The agency said that all 44 UK approved compliance schemes declared that they have met their individual packaging recovery and recycling obligations.

Glass targets met

The figures show that 558,792 tonnes of glass PRN/PERNs - the category MRW reported was most behind its target after the third quarter - were issued in the final quarter of 2012, with 181,007 tonnes in January this year.

Tom Rickerby, senior market operator at the Environment Exchange (t2e), said that the 2012 compliance year was the best example of the PRN system working as it was designed.

“High PRN prices going into the final quarter helped to stimulate underperforming recycling markets in steel, plastic and glass and PRN price reacted accordingly,” he said.

Plastic fell from a year high of £30 in early October to a low of £2 per tonne. Steel fell from £50.50 to £8 in the same period. Glass prices remained high with PRNs changing hands for £70 in the final hour of 2012 trading, according to t2e.

Chris Taylor, PRN trader at Clarity Environmental, said that the data also raised questions about why the Q4 figures are so high compared to the previous quarters, whether stocks of glass have been depleted in order to meet the obligations and if the surplus has been moved into 2013.

Phil Conran, of consultants 360 Environmental said that although it was positive that the targets had been met, the figures also raised questions about the real underlying state of the market.

“There has been a lot of extra glass in the last quarter and that raises questions over why quarter three figures were so low,” he said. “Either the PRN system is working as it should and higher prices gave low quality glass sufficient value to bring it into the market, or people have been playing the system to push up prices. It’s difficult to say without the raw data, and only the Environment Agency can answer that.”

The year ahead

How this year will pan out is also uncertain according to Conran, as a smaller amount of carried over tonnage, seemingly lower recycling rates and possible higher obligations could make 2013 difficult to meet obligations.

Taylor at Clarity said: “Recycling rates suggest the UK should meet the plastic obligation for 2013, assuming it is around the 700,000 tonnes mark as expected. Steel is perhaps looking tighter than expected for 2013 given the rising targets. All things considered, despite this latest news, the glass market will remain a huge challenge in 2013.”

Rickerby at t2e said that producers would hope the momentum generated in the final months of 2012 will continue into this year and help bring stability back to the markets.

The fourth quarter data, reported by accredited reprocessors and exporters on to the National Packaging Waste Database, provides an indicative position on the amount of packaging waste received for recovery and recycling last year.

The final data will be published in early April.

 

 

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