For many in the private sector, 2010 was another year of uncertainty: with the recession still biting and the change of Government, many were unsure what the future would hold.
Fortunately for the UK glass container industry, the economic situation has not greatly affected production rates, although the same cannot be said for glass recyclers, which are dependent on recycled glass supply and packaging recovery notes (PRNs). Cullet supplies to the glass recycling and processing industry, despite the overall increase in glass recycling, continue to demonstrate a long-term decline in quality.
The full impact of the glass PRN price decline is unlikely to be seen until the quarter four figures are published, at the end of Q1 2011, although the PRN prices seen in late 2010 are expected to continue during 2011. This is due to the packaging targets remaining static, so that supply is expected to exceed demand.
The last time PRN prices were this low, the demand for glass cullet decreased significantly as a number of accredited processors stopped using recycled glass for purposes other than closed loop recycling back into new glass containers. Landfill tax has risen to rates that preclude this effect this time, but the value of glass up the supply chain has dropped significantly and it is hard to evaluate the full effects at this point.
Another concern is that the extra processing required to improve quality to remelt standard and the fall in PRN prices could see the price paid at the weighbridge to local authorities and waste management companies decline, at a time when authorities are already seeing substantial budget cuts. Users of cullet are constrained because the materials they are substituting by using cullet are generally “cheap, plentiful and locally sourced”.
The waste review, which is due to be published in spring 2011, has the potential to promote glass recycling – or harm it. Glass processors will be aiming to make representations to improve the quality, quantity and sustainability of glass recycling in the years to follow.
In the short term, it could be argued that a decline in glass prices might result in collectors rethinking how they handle the material to achieve the best value. This would obviously benefit the glass industry if quality was to improve considerably.
It has been well publicised that bring banks deliver the best quality material, but participation rates are not favourable. It may also be argued that the opposite may occur, and that more councils will turn to fully commingled collections to cut collection costs. But the impact of such a switch could be counterproductive in that no market may exist to handle increased quantities of recycled glass.
Despite the predicted absence of the draft waste review until May and that no changes will be seen until at least 2012, it is hoped that 2011 will see a period of calm contemplation with regard to collection infrastructure because decisions made in haste could be repented at leisure.