Early Q4 data shows final push for PRNs

However, some materials are expected to begin 2016 in a better position than others – with the carry forward down 27% on last year overall.

The data, released a month earlier than expected but still to be validated, shows a large boost for paper, plastics and steel in the final weeks of 2015 which saw a period of prolonged volatility in the PRN market.

Paper PRNs rose to around £6 per tonne as compliance schemes battled to meet the recovery obligation, while plastics PRNs fluctuated between £40-70 per tonne after a weak third quarter.

Plastics

However, Q4 saw an estimated 263,055 tonnes of plastics recycled up from 203,876 tonnes in Q3 – an increase of around 60,000 tonnes. This means that not only has plastics not missed its net annual target of 850,600 tonnes for the year as had been previously feared, but is likely to carry around 35,245 tonnes forward into 2016.

With Defra tipped to lower the plastics packaging recycling target this year, demand could fall to lower levels than experienced throughout 2015. However, there remains the risk that cheaper oil prices and a slow first quarter could generate problems later in the year if less plastics is recycled.

Paper also had its strongest quarter of the year with around 95,000 more tonnes recorded compared to Q3. It means an overall increase in paper recycled of 200,000 tonnes compared to 2014, and a carry over of 126,527 tonnes into 2016.

On the metals front, aluminium has met its 2015 net target of 76,316 tonnes after a volatile first half of the year, with around 2,000 tonnes carried forward into 2016. And steel, while forecast to be a ‘problem material’ over the next 12 months also performed better than expected, with 86,557 tonnes recycled in Q4 and a carry forward of 22,821 tonnes.

Glass

More concerning was glass, which despite meeting its target for the year begins 2016 with a carry over of around 80,000 tonnes. The price of both glass remelt and other PRNs have remained low throughout the year, meaning there could be increased pressure in the market if more material is not recycled.

Wood packaging recycling, while meeting its net obligation of 228,759 tonnes with a better than expected Q4, also continues to show annual decline. Research into the wood target currently being undertaken by Valpak could however address this issue in time.

And recovery, problematic throughout 2015 due to a shortage in energy from waste plants becoming accredited, came in short of the 522,181 tonne net obligation but is understood to have been helped over the line by paper and wood. It begins 2016 with around 29,944 tonnes carried forward.

Valpak

Commenting on the figures, Duncan Simpson, director of sales & marketing at compliance scheme Valpak, said it looked as if the UK would comply with the regulations on all materials through a ‘huge’ amount of effort from Defra, Agencies, and Alupro on encouraging accreditation on aluminium packaging.

“These are provisional numbers, and therefore they can change, but we would imagine there should not be too much movement from here”

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Duncan Simpson, sales and marketing director
Valpak

He said: Steel and plastic faced tough markets due to global commodity price volatility but UK crossed line with those leaving it late probably paying higher prices at the end of the year. Wood, general recycling and general recovery saw prices rise due to changes in EfW definitions and some tightening of supply.

“The 2016 year will be interesting to watch in terms of consultation results but also how much was carried through into 2016 from 2015 on materials such as plastic. These are provisional numbers, and therefore they can change, but we would imagine there should not be too much movement from here.”

Pricing

Chris Taylor, of compliance scheme Clarity Environmental, added: “We would expect to see prices soften across the board although much will remain to be seen because of other factors that affect pricing instead of just the data.”

And, Phil Conran, director of compliance scheme 360 Environmental and also chair of the Advisory Committee on Packaging, suggested that while the provisional data has eased pressure in the plastics market, there were still challenges leading into 2016.