Export and PRNs blamed for Closed Loop difficulties

Reforms to the packaging recovery note (PRN) system, including incentives for the use of recycled materials, could have shielded plastics recyclers from market volatility currently affecting the sector the British Plastics Federation (BPF) has claimed.

The comments came in a statement today (April 7) from the BPF’s Recycling Group, which claimed that businesses such as Dagenham’s Closed Loop Recycling are victims of a ‘market failure’ which is putting the future of plastics recycling infrastructure in the UK at risk.

BPF has called for changes to the PRN system to encourage teh use of recycled material in new products
BPF has called for changes to the PRN system to encourage the use of recycled material in new products

According to the Group, reductions in oil and polymer prices coupled with strong demand from global ‘low cost economies’ for waste plastics have undermined confidence in the UK plastics recycling industry.

Bottle recycler Closed Loop in particular has claimed that the falling oil price is leading users of recycled plastic to switch back to virgin polymers as the value of the material falls alongside the cost of oil. The company has sought assurances from the Dairy Industry that pledges to use recycled content in new packaging will be honoured (see letsrecycle.com story).

In today’s statement BPF has reiterated its call for an ‘offset principle’ to be incorporated into the PRN system to encourage use of recycled content in products. This would

The organisation has long argued in favour of reforms to the PRN system – which was set up to ensure that packaging producers fund the recycling of their products once they reach the end of life, through purchasing packaging recovery notes (PRNs), or their export equivalent, PERNs.

Changes that BPF has argued in favour of include a split target for plastic packaging recovered domestically and exported overseas and an offset mechanism to incentivise producers to use recycled polymers in new packaging.

BPF claims that the dairy sector and retailers would have “thought twice” about switching back to virgin polymers if an offset principle had been incorporated into the system. The principle would work by reducing the PRN obligation of businesses using recycled material in packaging.

‘Fork in the road’

Roger Baynham, chairman of the BPF RG said: “We have effectively reached a fork in the road. Do nothing, accept that the UK recycling sector will struggle to compete with global low cost economies and become increasingly dependent on such markets for our waste or implement changes which can deliver successful and investable long term recycling businesses which create green UK jobs as part of a sustainable circular economy. Events at Closed Loop Recycling show that this is a decision which can no longer be ducked.”

Roger Baynham, chair of the BPF's Recycling Group
Roger Baynham, chair of the BPF’s Recycling Group

The BPF’s calls for reform of the PRN system comes as work is underway to assess whether a common standard on packaging waste contamination can be established to create a ‘level playing field’ for domestic and overseas processors. The government’s Advisory Committee on Packaging (ACP) is expected to conclude work in this direction later in the year.


Elsewhere talks involving the plastics recycling sector, government ministers, the Waste & Resources Action Programme (WRAP) as well as retailers and the dairy industry have been ongoing over the last fortnight seeking assurances that supermarkets will not go back on pledges made in the Dairy Road Map to source recycled plastics for milk bottles.

Environmental group Friends of the Earth has joined efforts to prop up Closed Loop Recycling, launching the ‘Recycled in Dagenham’ campaign in support of the business last week.

On its website, Friends of the Earth has stated: “Closed Loop Recycling’s multi-million pound plant is state of the art – one of the world’s finest producers of ‘food grade’ recycled plastic.

“And because some big companies might go back on their word, it could soon be stripped out to be sold to the highest bidder.”

The campaign group has composed an email to supermarket chains Tesco, Sainsbury’s, Asda and Morrisons, which can be sent via its website, urging the retailers to back the UK’s recycling industry.

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