An emergency meeting of the Advisory Committee on Packaging could be held soon as several PRN prices soar.
The rapid rise in the prices of PRNs – packaging waste recovery notes – which are needed by obligated businesses to meet recycling targets is said to be causing financial strain among compliance schemes and obligated businesses.
Four plastic PRNs, for example, could now cost £1,000 whereas two years ago, four could have been bought for less than £250. Paper PRNs have also risen dramatically, currently costing around £17 each, up from £1.00 two years ago. However, prices for some PRNs, such as wood, have eased this month.
Prices have been driven up by rising targets, reductions in export PRN volumes because of concerns overseas about recycling standards. And, there is some concern that some PRN holders may be sitting on the evidence and trying to force the price up.
Now there is a growing call in the packaging sector for the introduction of some form of balancing mechanism to be introduced by the Department for Environment, Food and Rural Affairs. This could be akin to the Compliance Fee used in the WEEE – waste electrical and electronic equipment – system, which acts as a kind of backstop mechanism to allow obligations to be met if sufficient evidence is not accrued.
Should obligated businesses in the packaging system fail to meet their targets this year, possibly because of high prices, they could face action by the Environment Agency. However, one potential route could be to pay civil sanctions which sees charities benefit from company payouts and means companies are not prosecuted.
Some in the sector are hoping that an emergency meeting of the Advisory Committee on Packaging will be held even this week to discuss the price rises and whether or not solutions can be found to help alleviate the situation.
Phil Conran, chair of Defra’s Advisory Committee on Packaging (ACP), confirmed to letsrecycle.com that there are concerns about the current situation with PRNs.
He said: “There are strong concerns being expressed to ACP members by producers and schemes in particular, over the impact of the rapidly escalating PRN prices on obligated businesses
“These are causing severe hardship at a time of economic uncertainty and given continued export market problems, may not enable this year’s targets to be met anyway.”
“There are strong concerns being expressed to ACP members by producers and schemes in particular”Phil Conran
Chair, Advisory Committee on Packaging
Mr Conran continued: “There are then the risks of unintended consequences such as increased fraud and large-scale non-compliance. The ACP is highlighting these issues to Defra and will be seeking an urgent assessment of data to ensure we understand the true causes of the increases and to consider how best to deal with the situation.”
At the end of 2018, Defra was asked to consider reassessing the targets for wood packaging recycling with the sector seeing wood PRNs jumping from £8 early in 2018 to £70 later in the year. The Department is thought to have been reluctant to change the wood targets as the whole PRN system is up for review through the Resources and Waste Strategy.
In the Strategy, the Department described the current system and that through its proposals it will put steps in place to ensure producers bear the “full net cost” of managing their products at the end of life.