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Is PRN/PERN system reform really necessary?

It has been widely reported in recent months that the existing Packaging Export Recovery Note (PERN) system incentivises the export of poor quality recyclate, which undermines the domestic reprocessing markets.

This has led to a call by many in the industry, in particular from the plastics sector, for a reform of the PERN system to produce a level playing field for UK reprocessors.

The argument for this reform stated by many, (including the Local Government Association and the Resource Association), appears to be based upon a misunderstanding of the conditions of accreditation for UK packaging reprocessors. While it has been widely published that UK reprocessors may only issue a PRN for the weight of reprocessed material they actually produce, this is, in many cases, untrue.

Richard Harris

Accredited UK reprocessors may issue PRNs against 100% of the weight of UK waste packaging received, providing it is reprocessed in line with the acceptable efficiency standards stated in Annex C of the accrediting agencies’ guidance document, ‘How to apply for an accreditation to reprocess or export UK waste packaging’, (ACC-GN01). For plastics reprocessors the minimum efficiency standard is 75%. Therefore, for every 100 tonnes of waste accepted, if a minimum of 75 tonnes is actually recycled, the reprocessor may issue 100 tonnes of PRNs. PRNs are, therefore, issued against waste received,( as recorded on NPWD), not on waste reprocessed. This effectively allows a process loss of up to 25% for UK plastics reprocessors.

The quality of the waste received remains important to UK plastic reprocessors, as the majority of process losses are caused through contamination by other materials. However, the current PRN/PERN system does not disadvantage them, in comparison with exporters, to the degree that has been widely reported. It can only be a matter of speculation as to why any attempts by the regulating agencies to counter this misrepresentation of the PRN accreditation system, or emphasise the existing controls on the export of packaging waste for recycling, are not receiving a similar level of reporting.

Reprocessors must also submit a suitable sampling and inspection plan to ensure that the waste they receive, for which PRNs are issued, is UK packaging waste, or meets a specification which allows them to apply mixed waste protocols. However, these same requirements apply to accredited exporters of packaging waste. Additionally, exporters are normally required to provide evidence to confirm the specific overseas sites to which they will export the waste for reprocessing. This will include evidence that the site has reached the acceptable efficiency standards in Annex C as above, or that the waste will be dealt with under conditions that are broadly equivalent to those acceptable in the EU.

If the types of activity described by some critics do occur, where highly contaminated loads are being passed off as accredited packaging waste, they must be regarded as an abuse of the current system, not its intended result. The appropriate response in these situations should be improved levels of enforcement, rather than seeking to change the existing PRN/PERN system.

It would be unwise to base the current call for reform of the PERN system on, what would appear to be, a degree of misinformation. The export of material for recycling is a valid and valuable outlet for collected UK packaging waste and an important element of the current packaging compliance regime. Without sufficient UK reprocessing facilities the alternative would undoubtedly be landfill or energy recovery at best. It is also unlikely the ambitious plastics recycling targets set for 2017 will be met without a significant contribution from the export market. The lack of UK capacity for some materials has been further highlighted by the suspension of mixed plastics reprocessing at the Biffa Polymers facility in Redcar, despite significant financial support from WRAP.

Furthermore, for a considerable period prior to the recent upsurge in plastic and glass, the PRN prices were not of a sufficient value to have provided a significant incentive to either, affect the overall quality of exports, or promote investment in UK reprocessing facilities. There have always been, and still are, more significant commercial reasons than the PERN price for the majority of exporters to maintain an acceptable level of quality in the material they sell.

The emphasis should indeed be on quality of recyclate, however, the demonization of exporters and a call for yet another reform of legislation may not be helpful in this case. If properly enforced the existing PERN system contains sufficient checks and balances to ensure the material exported is of equal quality to that accepted by UK reprocessors. In addition, the recent ‘Green Fence’ erected by the Chinese authorities has demonstrated that overseas markets are capable of controlling the quality of UK exports for themselves and, at the same time, creating the level playing field desired by UK reprocessors.

Perhaps surprisingly some UK reprocessors, who have openly contributed to the recent criticism of the PERN system, are themselves registered as accredited exporters of packaging waste. This could be seen as somewhat hypocritical.

Abuse of the PRN system has certainly not been exclusive to exporters, as the recent case of fraud by a UK glass reprocessor demonstrated. Continuous changes to legislation are not helpful to regulators, or those they regulate, particularly in times of diminishing resources. It would be better to concentrate the effort on rigorously enforcing an existing adequate system, rather than on potentially unnecessary changes.

Richard Harris, compliance manager at Synergy Compliance

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