Following the path to PRN transparency

In September, ecosurety plans to change the way the waste and recycling industry views PRNs (Packaging Recovery Notes). We have decided to take action after listening to our members’ frustrations about how the PRN system currently operates.

We applaud that PRNs have helped kick-start the UK’s recycling infrastructure, but we are also sensing increasing levels of dissatisfaction from producers and reprocessors, specifically when it comes to how PRN money is spent.

A significant proportion of members invest tens of thousands of pounds in the waste and recycling industry every year through their PRN obligations.

Unfortunately, despite the efforts of ecosurety over the years, the system is not designed for transparency. Very few companies we speak to know where the money goes, or what it is spent on.  At the same time, companies are under greater pressure than ever before to show where CSR funding ends up.

Opportunity

We think this is a huge, and if you will forgive the pun, wasted opportunity. As the UK looks to define a waste and recycling policy outside EU Directives, we should be encouraging more and not less investment in home-grown recycling projects.

As one of the UK’s fastest-growing compliance schemes, we do our best to help producers make informed PRN purchases, however, we are restricted to the information provided to us. It is difficult to tell producers what will actually happen to their obligation money once the investment category – e.g infrastructure/capacity projects, funding collections, reduction in price, cost of complying, future investments, or recycling communication – is chosen.

For an industry that spent £350m over the past five years, with a mean average of £12,500 per obligated producer (based on a mean average of producer obligations in 2015) such investments barely constitute a line in an annual report.

System

After watching the market closely for a number of years, we have decided to take the lead and present a more transparent, more stable and collaborative version of this system.

It’s not just producers that want greater transparency, reprocessors could enable more efficient investments if they were able to work more closely with obligated companies.

A number of high-profile closures of reprocessing plants already this year underline the fact reprocessors find it difficult to attract investment in a way that supports consistent cash-flow.

Knowing when an investment is coming, can help reprocessors plan more strategically, which will in turn help reduce volatility in the PRN market. We believe this is not only desirable, but possible.