The prices of PRNs and export PERNs have soared over the past few months against a backdrop of rising concern about hitting 2022 compliance targets for packaging recycling and recovery (see letsrecycle.com story).
In a parliamentary question, Jessica Morden, Labour MP for Newport East, asked Defra what assessment they made of the effect of rising costs of PRNs on businesses and whether they would implement a cap.
Responding yesterday (13 October), Ms Harrison said Defra was aware of the increased prices, particularly for glass PRNs.
She said Defra had “regular engagement” with industry through its advisory committee and with regulators to understand if there were any issues in the market and the likely impact on business.
However, she said price fluctuations were “a feature of any market system”.
“Higher prices usually result from supply side issues, which in turn encourage increased activity by operators in the market, thereby increasing the level of reprocessing and reducing PRN prices,” Ms Harrison added.
“We will continue to keep the matter under review, but currently have no plans to intervene in the market and to cap PRN prices.”
PRNs
The prices of PRNs for all materials have rocketed this year. The value of paper PRNs has exceeded £30 for the first time since 2002, while glass PRNs have also been especially high. The high prices come alongside suggestions some companies with glass recycling obligations might not have purchased sufficient glass PRNs to meet their obligations in 2021.
The PRN system was introduced in 1997 as a way for producers to demonstrate that they have met their statutory recycling obligations each year. Accredited recycling processors or exporters issue PRNs or PERNs for each tonne of eligible packaging waste recycled, for which producers pay a fee.
Initially due to be scrapped with the introduction of extended producer responsibility for packaging, the PRN system is to be retained as “an interim solution for managing payments for non-household packaging waste” (see letsrecycle.com story).
Defra has, however, set out plans to reform the PRN system, which cover reporting requirements, timeframes for trading and the introduction of a compliance fee for producers that fail to meet their obligations.
Compliance fee
Views on the current market and the high prices range from the belief that they are being set at market rates, through to others who believe that businesses issuing PRNs are setting the price at unnecessarily high levels.
The topic of markets was raised at the RWM and Letsrecycle Live trade shows on 14 September. Then, Steve Gough, chief executive of compliance scheme Valpak, said a compliance fee for packaging would help “take the heat” out of the PRN markets (see letsrecycle.com story).
Responding a few days later in a statement, Joseph Doherty, managing director of waste management company Re-Gen Waste, said a compliance fee would “undermine development and bring even more uncertainty into the market” for those involved in treatment and recycling.
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