Aluminium sector in crisis talks over recycling targets

Even while Defra is seeking to raise UK aluminium packaging waste recycling targets from next year (see letsrecycle.com story), problems with exports mean that as things currently stand, the existing targets for this year may not be achievable.

The problems relate to this year's new legal requirement for exporters of packaging waste to send material only to foreign reprocessors that meet “broadly equivalent” standards to European reprocessors if they want to sell producer responsibility evidence to producers.

In aluminium, the difficulties come because exporters have been unable to secure valid evidence to demonstrate that their buyers achieve working and environmental conditions equivalent to those in Europe. They have already had a deadline of June 30 extended to the end of 2007 to meet the criteria (see letsrecycle.com story), but this does not look like being enough.

As a result, the price of producer responsibility evidence – known as packaging waste recovery notes (PRNs) or export notes (PERNs) – has been soaring in recent weeks to as high as £90 per tonne, and could reach even higher still if a shortage arises.

At the start of 2007, prices for PRNs and PERNs – which must be purchased from recyclers or exporters by packaging producers to meet their recycling targets – were as low as £18 to £20 per tonne.

In the steel sector, exporters are suffering the same problems as in aluminium, with recorded steel exports down by 49% in the first half of this year compared to the same period last year. However, because steel reprocessing is above target in 2007, partly helped by a rise in domestic reprocessing, steel PRN/PERN prices are little more than £5 per tonne at the moment.

“Difficult”

Rick Hindley, executive director of the aluminium producers' organisation Alupro, confirmed: “We are still in deep discussion with the Agency and Defra because there is still no doubt that exporters are finding it extremely difficult to find the evidence they need to show reprocessors are meeting the 'broadly equivalent' standards.”

When the reprocessing and export figures are released by the National Packaging Waste Database for Quarter 3 of 2007, they are expected to show a significant decrease in exports of aluminium packaging waste compared to the same period in 2006.

Mr Hindley said: “There is no doubt that there will be a shortage of evidence about this year and next year if we don't get this sorted out. As for the increase in targets – we can't consider raising the targets until all this has been resolved.”

Proposals

Although he could not go in to details, Mr Hindley said there were two proposals to put forward at Thursday's meeting, which the industry hopes might see the procedures needed to demonstrate the “broadly equivalent” standards of foreign reprocessors made easier for exporters to cope with.

The Alupro director was hopeful that if accepted by the Agency, such proposals could take effect in time to meet this year's recycling targets.

Mr Hindley explained that the industry's proposals did not mean getting rid of the “broadly equivalent” requirement, but streamlining it. “With metal, there is no doubt it is being recycled,” he said, “we are hoping the relevant agencies take this on board.”

In 2006, the UK met its 31% recycling target for the recycling of aluminium packaging waste, achieving a 32.5% rate by recycling 46,719 tonnes out of the estimated 142,915 waste stream. But, exports of aluminium packaging waste accounted for 11,350 tonnes (about 24.2%) of the recycling achieved.

For 2007, the UK has to meet a 32.5% target, but under Defra's proposals for increasing packaging waste recovery targets from 2008, the Department wants to see a 38% recycling rate achieved next year.

Mr Hindley said that without knowing all the figures from this year, he couldn't be certain whether Defra's proposed increase of aluminium recycling targets would be achievable, even if the broadly equivalents issue is resolved quickly.

However, he pointed out that there is an incremental growth in collections within the UK at the moment, particularly through local authority services, and said that provided the exports problems are sorted out, he was “optimistic” that industry would meet its packaging recovery targets.

“Aluminium has quite rightly been identified by the government as a priority material within its new waste strategy,” he said. “But we can only do this if the infrastructure is in place to collect it.”