Several companies and individuals involved in the recycling of packaging waste – which includes paper, metals, plastics, wood and glass – are becoming increasingly concerned that a range of factors are starting to destabilise the marketplace for PRNs – packaging waste recovery notes which provide evidence of recycling under the packaging waste regulations. PRN revenue plays an important part in the development of more recycling and in the sums paid for material.
One paper industry expert this week said that he believed there is “complete disarray in the market. PRN demand is weak and so monies are not feeding through to the mills and this will have a knock on effect on the price that can be paid for packaging grades.”
A range of factors are slowing the PRN market at present and these centre on the government's failure to publish targets for 2002 as well as some uncertainty over the situation in Scotland. Both factors are said to be making compliance schemes reluctant to buy many PRNs until the situation becomes clearer. Added to the two factors, is a European Court case next month which sees metals recycler EMR challenging the government and the Environment Agency over who can issue PRNs. While some legal opinions are that the European Court will confirm that PRNs can only be issued by reprocessors (such as paper mills and steelworks) the possibility of change is also unsettling the marketplace.
Touch and go
A key reason now emerging for the delay in setting targets for 2002 is that the UK may well have failed to reach its targets for 2001 and faces action from the EU unless it can collect some extra recovery evidence, such as glass from bottom ash in incinerator plants. If the UK has failed to comply, Environment Minister Michael Meacher – who has already conceded that the situation is “touch and go” – is likely to want higher targets for 2002 than the lower ones sought by his counterparts at the Department of Trade and Industry. Only this week Secretary of State Margaret Beckett warned that if targets are not met even tougher ones will follow. “We have legal obligations to fulfil and they are often very challenging. But if we fail to meet them, the legislation that follows in their train will be doubly hard.”
Scottish
The Scottish situation has arisen because compliance schemes and companies have the choice of being regulated in England/Wales or in Scotland. For England/Wales, the Environment Agency has confirmed that subject to checking it believes compliance schemes have complied. However, the Scottish Environment Protection Agency is still to adjudicate. It regulates the second largest compliance scheme Wastepack which has always been concerned that under the current PRN system too much money flows into the hand of reprocessors rather than into generating new collection of material.
The government is thought to believe that the system must go on and in effect the packaging waste sector needs to keep its nerve. Should there be complications in Scotland the role of the Scottish Executive is crucial and it is likely that the Department of the Environment, Food and Rural Affairs is already in some discussions with its Executive colleagues.
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