22 April 2015 by Tom Goulding

Aluminium and recovery hit hard in Q1 packaging data

Changes to scrap metal protocols have led to a “concerning” shortfall in the amount of aluminium packaging recovered in the first quarter of 2015, some industry sources have claimed in response to provisional recycling data released today (April 22).

And, changes to rules on energy-from-waste accreditation have also seen an estimated shortfall of 110,000 tonnes in the amount of recovery PRNs accepted over the first quarter.

Provisional data released today shows a promising start to the year for glass packaging - but not for aluminium

Provisional data released today shows a promising start to the year for glass packaging – but not for aluminium

The findings come from interim packaging waste recovery data published by the Environment Agency today, which shows the amount of packaging recovered or recycled between January and March 2015.

The data suggests that 14,871 tonnes of aluminium was accepted or exported in Q1, short of the estimated 18,871 tonne quarterly obligation that producers must meet for the material.

This could, some have claimed, be due to a removal of the agreed protocols for aluminium, such as mixed alloy cuttings, old rolled and old alloys – after criticism that the amount of actual aluminium packaging content in the material is negligible.

Instead producers can now claim PRNs on aluminium extracted from incinerator bottom ash (IBA). However, the amount extracted from IBA in Q1 was just 425 tonnes.

Glass

The forecast was better for glass, with producers accepting and exporting 256,483 tonnes of remelt against an estimated quarterly obligation of 258,686 tonnes.

Meanwhile, glass aggregate slightly underperformed with 118,249 tonnes accepted or exported against a quarterly target of 132,646 tonnes – though this will unlikely effect market prices.

There was also good news for steel despite a modest carry over at the end of 2014, with 95,307 tonnes accepted or exported against a quarterly obligation of 89,513 tonnes. The protocols for the material remain unaffected.

And, while plastics fell short of its obligation by around 25,000 tonnes, the 195,321 tonnes accepted or exported was “surprising” according to some PRN experts who expected a much lower figure.

 

Table_PackagingQ12015

 

 

Commenting on the plastics data, Ian Andrews of the Environment Exchange said: “Export markets in January and February were very poor so it was anticipated the market would be undersupplied. People expected it to be well below 195,000 tonnes.

“Given current market conditions for plastic, the [PRN] prices won’t run away but it might well edge up a bit. However if this [25,000 tonne shortfall] is replicated in Q2 then we are going to see people becoming concerned.”

Recovery

Meanwhile, the shortfall in recovery has been attributed to a rule change by the Environment Agency, which from this year requires any EfW plants issuing PRNs to have achieved R1 accreditation.

At present only three operational EFW facilities in England have R1 status, which is a performance indicator for the level of energy recovered from waste. However, it is predicted that more plants will register to become R1 compliant if packaging data continues to show a lack of recovery (see letsrecycle.com story).

Mr Andrews went on to warn that a continued shortfall in recovery PRNs, paired with a declining wood market, could put too much pressure on paper to make up the general obligation for 2015 – which is estimated this year to be just over 1 million tonnes.

“Perfect storm”

Mr Andrews added: “Paper is the dominant PRN market but we can’t be blasé. If paper is expected to carry the general market, the wood market and a potential recovery shortfall this year of 400,000 tonnes, then all this pressure could create a perfect storm and lead to problems for the PRN system.”

But despite the shortfall, Li Chen, trading control and reporting manager at SUEZ, said he did not expect to see the PRN price rise above 70p per tonne.

Mr Chen said: “There’s a shortfall on recovery at the moment but we are waiting on the Environment Agency to make their mind up to allow claiming for backdated tonnages from January and February.”

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