Budget to bring plastics and glass targets decision

The plastics target, which presently stands at 52% for 2016, is set to rise to 57% for 2017 as per target levels agreed in 2011.

However, proposals to amend both the plastics and glass packaging targets were put to a consultation in November by the Department for Environment, Food and Rural Affairs (Defra).

Amendments to the plastics target have been proposed following a study carried out in 2014 that found baseline data used by Defra to measure the UK’s progress to meeting its EU packaging targets was incorrect. It has therefore been suggested that the high plastics target is putting up costs unnecessarily.

The plans includes two options to substantially lower the target for plastics. The first involves reducing the target to 48% for the year and then increasing by 1% yearly until 2020, and the second a drop to 49% with annual increases of 2%.

Defra has also entertained a third option – to leave the target at its current level – despite research suggesting that to do so could place an unnecessary cost burden on producers, who are already meeting their overall targets.

Pressures

The outcome of the consultation comes at a time of volatility for plastic packaging recovery notes (PRNs) – with global pressures such as falling oil prices creating uncertainty within the market. Having recorded a larger than expected transitional tonnage into 2016, the continued easing of the plastic PRN price will depend largely on whether a decision is reached tomorrow.

letsrecycle.com understands that the government’s preferred option could be to impose the 49% target, with annual increases of 2% until 2020. Views from the sector suggest the system would likely see the plastics PRN market ease for producers in the medium term.

“It’s the right step, a lower percentage is going to be positive for the producers.”

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Matthew Manning, sales manager
ecosurety

Matthew Manning, sales manager at compliance scheme ecosurety, said: “It’s the right step, a lower percentage is going to be positive for the producers because there will be less of a levy to pay and a reduced obligation. It will also mean an easing of pressure for reprocessors. Overall, we would still have that incremental rise going forward.”

Valpak

Duncan Simpson, director of sales & marketing at Valpak, said he hoped for a positive response in the Budget to the Defra consultation.

He said: “Our recommendation in response to Defra’s consultation based on the Valpak Plastic flow and Glass flow research projects was to set targets to ensure that the system is not over delivering whilst also supporting longer term goals for plastic and glass recycling.

“We hope this means they will pick the option for delivering higher glass targets and plastic targets but spread over a longer period of time so that they dovetail more closely with the suggested levels of recycling in the EU CE draft proposals for 2025. This should minimise the cost paid by producers in the medium term.”

He added: “After assessment, Defra always have the option to make adjustments based on known facts regarding performance, growth and the economy in general.”

On the short term outcome of the expected Budget announcement, Tom Rickerby, head of business development at The Environment Exchange, explained: “There’s a large amount of uncertainty in the market and we are still seeing quite a lot of price volatility off the back of that. They will remain buoyant for the foreseeable future.”

Glass

Defra is also asking for views on proposals for the future of the glass packaging target until 2020. These include options for the target to remain at its current level of 77% until the end of the decade, or yearly annual increases of the target of 1% up to 2020.

Rebecca Cocking of British Glass – which represents the glass reprocessing industry – told letsrecycle.com that there is general consensus among the association’s members that the target should be raised incrementally.

She said: “In the consultation we opted for the 1% increase year on year mainly because in previous years when targets have been static we have found complacency in the [PRN] market. We have one eye on the targets coming out of the Circular Economy and they are quite stringent so having a static target seems pointless.”