The packaging recovery note (PRN) system is under siege. The National Audit Office (NAO) is the latest organisantion to find fault in the UK’s extended producer responsibility market mechanism.
But how much of the recent clamour for change is justified and how much is a knee-jerk reaction to a shifting political agenda? Is the PRN system past its sell-by date or has it become a scapegoat for wider failings in our waste markets?
Proponents of the system will argue that, for 20 years, PRNs have quietly delivered on their core objectives: providing producers with cost-efficient compliance in times of healthy recycling markets, dynamic price support to help boost recycling rates when needed and stabilise waste markets during times of distress.
Currently, record PRN prices are helping the UK recycling industry to adjust to the most significant market shake-up since waste went global. PRN revenue provides funding directly into the hands of recyclers, often giving commercial value to material that would intrinsically have none. The PRN system has provided the Government with a robust – and unfailing – measure of the UK’s recycling performance.
The system is not perfect. The NAO report accurately highlighted many of its deficiencies. But concerns about the regulator, fraud, inaccurate data, exporter bias and a lack of transparency have been discussed for years, and can be solved easily through better resourcing and policing, more stringent penalties, mandatory reporting, a rethink on export protocols and simple amendments to the regulations.
The recent Chinese import ban has highlighted the UK’s over-exposure to global waste markets, but it is unfair to blame the PRN system for failing to develop sufficient domestic recycling capacity.
Irrepressible demand from China has allowed the UK to adopt a low-cost, low-quality export model for a significant proportion of its packaging waste.
While this may not be the most sustainable, circular or ethical system, in terms of pure market economics it has provided the most efficient and cost-effective solution.
China’s enforced trade restrictions are part of a slow but inevitable shift towards the commoditisation of waste markets. Achieving this will require strong Government intervention in globalised markets that are both susceptible to abuse and too often fail to consider externalities, such as the environment and welfare.
If emerging import restrictions in Vietnam, Malaysia, Indonesia and Poland are a sign of things to come, the UK will be forced to invest in better domestic reprocessing capacity.
An improved, well-regulated PRN market mechanism can still provide a powerful, flexible and efficient policy tool to help expedite this transition and complement other proposed changes driven by the Circular Economy Package. Vivre le PRN!
Tom Rickerby is head of business development at t2e