OPINION: What does the UK’s recycling sector need from the hotly anticipated R&W Strategy? James Piper, managing director of recycling compliance scheme Ecosurety outlines some of the areas he is hoping to see addressed.
In 1977 the first bottle bank was introduced in the UK. In the subsequent 40 years our country has worked to build a recycling sector that can handle the dramatic increase in packaging waste being generated. Initially dealt with on home ground, export of recyclables became part of the solution. In 2016 over half of our recycling was shipped abroad. China was the main recipient – it dealt with 50% of our exported plastic and 75% of our exported paper.
That was until 2018. Confronted with its own recycling demands, in January China stopped importing foreign recycling. News that our most-relied-upon recycling export route had disappeared meant the UK was suddenly competing with other western countries, also trying to find alternative recycling export markets. New locations; Thailand, Malaysia and Turkey, were established. However, the focus remained directed towards hitting recycling targets rather than guaranteeing the environmental credibility of our new export chains.
Later on this year, however, it appeared that exported ‘recycling’ waste from the UK is being disposed of in illegal dumps abroad. Often untraceable, Packaging Export Recovery Notes (PERNs) received in return for the exported recycling were being innocently counted as credible evidence of recycling. The illegal dumping news has brought in to question the UK’s recycling figures and shown us that our recycling export market is deplorably monitored and in urgent need of reform.
Reform, we hope, is on the cards as the government’s Resource and Waste Strategy is expected before the year is out. As managing director of a recycling compliance scheme, I work with businesses and organisations from across the recycling spectrum; from producers and local authorities to UK-based reprocessors. I’ve witnessed the limitations of our existing system and recognise the urgent need for reform.
Ultimately, the core problem lies within our Packaging Recovery Note (PRN) system. Despite best intentions, PRN’s have failed to ensure UK recycling infrastructure has been able to grow. Instead of building UK recycling capacity, it has restricted it, with most of the growth being channelled abroad via PERNs.
Ahead of the Resource & Waste Strategy, which parts of the PRN system do I hope it will address? How can DEFRA reform the UK’s recycling system and save itself from this depressing exposé? Below I’ve outlined four key areas where I believe change is required.
We need the forthcoming Resource & Waste Strategy to provide a system that offers a fair, traceable market for PRNs. Currently the UK’s internal PRN market is in direct competition with its export one. Thanks to inadequate export checks, highlighted by a National Audit Office report in July (see letsrecycle.com story), the opportunity for fraud and deception has been embraced. Though one PRN or PERN is purchased in return for one tonne of recycling, exported recycling can be a far lower grade than the recycling dealt with by reprocessors here in the UK. As such, the system has unfairly favoured exporting waste and our own recycling infrastructure has been deprived of revenue enabling it to grow.
We also need the Resource & Waste Strategy to tackle a lack of transparency. Recognising over half our recycling will need to be exported for the immediate future, government must ensure a robust system of environmental checks and audits are put in place. PERNs and PRNs should be equal in credibility. If anything, PRNs should be favoured over PERNs, so long as they enable obligated producers to invest in UK recycling infrastructure.
3. Price Volatility
The UK’s PRN market is open, meaning it uses a tradable permit mechanism to reach its packaging recycling targets. These PRNs are sold by reprocessors and priced according to supply/demand. 2018 has seen PRN prices soar to record levels, suggesting price fixing or a deliberate withholding of PRNs to push up prices is taking place. This affects producers and consumers to whom the costs are ultimately rolled down to. Our cash-strapped councils are also struggling to meet the demands of volatile PRN prices. As we have already seen, sudden closures of recycling exporters have sent PRN prices rocketing through anticipated drops in availability. This will increase the likelihood of producers / compliance schemes buckling under PRN costs and failing to provide end of year Certificates of Compliance. Defra need to acknowledge the impact of recent price volatility and bring in reforms that provide a fairer market for all.
4. Shift in producer perception.
Producers can claim to source all their PRNs from UK reprocessors, however, without actively making efforts to add new PRNs to the ‘pot’ they are simply taking away UK PRNs from other producers. They have not caused any extra investment to flow into UK recycling infrastructure. For many years I’ve urged CEOs, MDs and sustainability directors to recognise that recycling compliance doesn’t need to be perceived of as a tax but as a form of reinvestment. If producers allocate a percentage of the PRN price to investment and innovation at home, they can make a tangible difference to the UK recycling sector. The more PRNs we produce, the greater our recycling capacity. The greater our capacity, the lower cost of recycling and the less we rely on exports.
2018 has been a turbulent year for the recycling sector. The Government must see their forthcoming Waste Strategy as an opportunity for dramatic reform. Let’s hope that it will move our system towards a functioning circular economy. We all need a recycling industry fit for the 21st Century. The industry has got the drive – the Government now just need to provide the direction.