PRNs – packaging waste recovery notes – are the currency at the heart of the UK’s current system for producer responsibility on packaging.
The packaging waste regulations allow businesses to apply to be accredited as a reprocessor or exporter so long as the conditions of accreditation are met and the operator submits a valid application. Until this year, this has enabled any business to apply regardless of their operational status.
Rule change
Now, environmental regulation expert Phil Conran of 360 Environmental, who is also a former chair of the Advisory Committee on Packaging, has said that a rule change by the Environment Agency will have significant consequences for accreditation.
Questions around the rule have been submitted by letsrecycle.com to the Agency with a response expected this week.
Mr Conran explains that in August, the Agency added a new condition for accreditation into a communication that was sent out to existing reprocessors and exporters in the lead up to the September application window for accreditation. This was then formalised in a change to the GOV.UK guidance on 29th September and stated: ‘You must be actively receiving, treating and recycling waste or exporting waste to be recycled overseas.’
This change was not widely picked up and it is only now that the Agencies are refusing to consider applications for accreditation from operators that are not meeting this requirement, that the impact is being fully realised, says Mr Conran.
He noted that this condition is not only being applied to operators that wish to become newly accredited, but it is also being applied to currently accredited operators when applying for 2024 accreditation if they are not able to demonstrate that they are actively operating.
Stability
Mr Conran said: “It is understood that the Agencies have taken this stance to ‘ensure the stability of the packaging regime’, ensure that only those that can demonstrate they are serious operators are accredited and to avoid speculative applications from those who are not experienced or are just in it hoping to make a quick buck on PRNs.
“This sentiment is understandable as although the Agencies get an application fee, if the applicant registers as a small operator, the fee hardly covers assessment, let alone enforcement. However, this change has the potential to undermine recycling growth as the level of recycling is only measured through the data supplied by accredited operators. And it is also a severe constraint on free trade.”
And, he added that where PRN prices are high, reprocessors and exporters can only hope to compete for waste if they have the benefit of the PRN value. “And if they can’t apply for accreditation unless they are reprocessing or exporting, then they can’t compete to get the material they need to be able to demonstrate they are active. And given that applications can take up to three months to be determined, the operator would need to be active during that time without the PRN value, incurring significant cost with the potential risk that their application would be rejected.”
This raises the question, said Mr Conran, as to whether this is a restrictive trade practice but it also must raise concerns as to the regulators ability to arbitrarily apply new blanket conditions without proper consultation with industry. And, he said he thought the requirement to be active is not just applied to packaging but is also now a condition of accreditation application for WEEE and Batteries.
Schedule 5
According to the sector expert, in the case of packaging, the regulators are relying on Schedule 5 (1) q (iii): a reprocessor or exporter must comply with such other conditions as the appropriate Agency may specify in the notification of a grant of accreditation. In the past, this has normally been used to apply specific conditions to operators once accredited but not to change the conditions under which an operator can apply.
Mr Conran concluded: “Hopefully, the Agencies will reconsider their position.”
And, he said that there were questions about the market and potential irregularities which the rule change might not influence including around exports to Turkey and possible reimporting of material for export. “Preventing new accreditations will not stop this and the real focus should be on identifying illegal activity.”
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