Growing fears of non-compliance as PRN prices soar

There are growing fears that the high price of packaging recovery notes (PRNs) might lead to more companies not complying with their obligations this year.

PRN prices
PRN prices have remained high all year, leading to concerns that companies may not comply (Picture: Shutterstock)

The prices of several PRNs have soared in recent months, with paper hitting a near 20-year high of beyond £40, plastics exceeding £400 and glass above £175.

One recycler went so far as to say they have “never seen anything like it” when talking about such large rises across the board.

These sustained high PRN prices have led to growing concerns that some obligated businesses might choose not to comply with their obligations despite it being a legal requirement. Some businesses are expected to argue that the cost of the PRNs has been unreasonably high, an issue which has emerged in the past.

A compliance specialist told letsrecycle.com that companies could see also packaging waste obligation costs as a “non-priority payment” as they focus on other costs they see as “more pressing”, such as energy bills.

Enforcement

One driver for these concerns is that the penalties for those who did not comply last year have still not been announced by the Environment Agency.

It is understood that there were around 13 companies who may have fallen short under the regulations last year, although there were varying degrees to which they did not comply.

Some had complied but not submitted an electronic certificate of compliance (eCoC), another regulatory requirement, while others had not complied or submitted an eCoC.

Those who failed to submit an ECoC but complied have been sent warning letters, the Agency says, but the environmental regulator has still not announced what enforcement action it will take against those who did not comply or submit an ECoC.

The Agency says enquiries are ongoing to determine appropriate enforcement action in line with its enforcement response options.

System

Many compliance specialists have warned there is a risk that a lack of direction as to what action the Agency will take is undermining the system, and those complying are growing frustrated. This could encourage others not to do so, the specialists suggested.

The market is also “tight”, with the Q3 data published last month showing that carry in of PRNs from last year is needed to hit this year’s targets (see letsrecycle.com story). Without carry-in, steel and plastic are below the 75% threshold.

This is one of several factors contributing to the high prices. For paper, weaker global economies have been a cause.

This is leading to higher prices for wood PRNs, because despite already exceeding its target, the PRNs are being used to contribute towards the general pot in place of paper, meaning demand for them are rising to beyond £30 too.

The plastic PRN is also rocketing as targets “remain close” for the year. The tight market is leading to “volatile” prices which continue to increase.

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