Audit Office questions ‘robustness’ of PRN data

The amount of packaging waste recycled in the UK could be overstated due to ‘flaws’ in the PRN system, a report by the National Audit Office (NAO) has claimed.  

The NAO released its report into the packaging recycling system today (23 July 2018) in response to a request from the Environmental Audit Committee in March 2018.

PRN reform
The report said that the system could allow some to overstate how much packaging they recycle

Packaging recycling obligations apply to all companies that handle more than 50 tonnes of packaging each year, and requires them to demonstrate that they have recycled a portion of that material.

Companies comply by buying packaging recovery notes (PRN) from reprocessing companies in the UK, or from companies exporting waste for recycling abroad.

According to NAO, figures published showing packaging recycling performance in recent years may not be ‘robust’, due to the potential existence of fraud and errors within the system.

In the report, the NAO found that the rate of plastic packaging found to be recycled shot up in 2012 at a time when household commercial collections had “plateaued”.

PRN reform

 

 

As outlined above, the NAO found that the rate of plastic packaging found to be recycled shot up in 2012 at a time when household commercial collections had “plateaued”.

The report added that while this may not be enough to “undermine the achievement of the target”, procedures should be in place to ensure that the figure is accurate.

“This increase is not entirely unlikely: a major waste management company told us that they had greatly increased collections in the sector,” the report said.

It added: “However, the Department [for Environment, Food and Rural Affairs] does not have reliable data to be able to test whether waste collections have in fact increased so quickly: waste collectors in the commercial and industrial sector are not required to submit data on the waste they collect.”

‘Issues’

The NAO went on to say that the government has “not faced up” to issues within the PRN system, including the potential for fraud and error. The Environment Agency, which is responsible for enforcing the system’s regulations in England, has fallen well short of its targets for inspections, NAO adds.

PRN reform
The system allows for a ‘particular risk’ that some of the material exported overseas is not fully recycled, the NAO said

In order to determine the amount of packaging that is recycled each year, the Department uses the data that reprocessors and exporters report when claiming recovery notes, the report says.

While the Agency does correct this data when it finds problems, the NAO says it does not consider it is realistic to assume that undetected fraud and error is “negligible”.

“There is a financial incentive for companies to over-claim, and a particular risk that some of the material exported overseas is not fully recycled,” the report said.

“In addition, its approach to determining the amount of packaging used in the UK involves complex methodology and a number of assumptions. Yet it has not established a regular, planned, and comprehensive programme for reviewing the analysis,” it added.

Low costs

Another criticism levelled at the system is the costs to businesses which place the material on the market.

The regulations set out that companies handling more than 50 tonnes of packaging a year and with a turnover of more than £2 million must demonstrate how a certain amount has been recycled.

PRN reform
The report added that many European businesses are paying more towards the recycling of packaging

In total, businesses paid £73 million in 201 towards the cost of recycling packaging, which the report says is lower than many other European countries.

It equates to a cost to business of 13 euros per tonne recycled, compared with costs to business of more than 48 euros per tonne in Germany, Belgium and the Netherlands.

Amyas Morse, the head of the NAO, said a tighter grip is needed on the system if the UK wants to tackle the impacts of waste and pollution.

“Twenty years ago, the government set up a complex system to subsidise packaging recycling, which appears to have evolved into a comfortable way of meeting targets without addressing the fundamental issues,” he said.

Mr Morse added: “The government should have a much better understanding of the difference this system makes and a better handle on the risks associated with so much packaging waste being recycled overseas.”

Recommendations

The NAO recommended that government should improve its approach to estimating packaging recycling rates, as well as to evaluate the scale of fraud and error within the system.

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National Audit Office

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