On 23 July the National Audit Office published a report into the PRN/packaging waste system in the UK and made a number of observations. In response, compliance scheme Valpak, has put together its thoughts (below) on the NAO study and related issues which could be considered in advance of reform of extended producer responsibility in the UK. It suggests some immediate changes could be introduced with more expected in the forthcoming Resources and Waste Strategy.
The NAO has conducted a thorough and detailed investigation into the current UK packaging system and regulations. Along with other industry participants, we provided detailed evidence to the enquiry which covered a broad range of topics.
We are pleased to see the NAO report acknowledges that the current system has had a successful track record of improving packaging recycling rates over the last 20years and that now the UK comfortably exceeds the EU targets.
However it covers a number of points which we agree could be improved within the current system and also some suggestions for more fundamental reform which we expect to be picked up by the Government when they consult on new regulations later this year.
Short term measures, potentially in advance of EPR Reform
1. We have pointed out for some time that there is a considerable gap between the registered tonnage of packaging actually reported each year and the estimates of the total that is placed on the market. The gap is due to unregistered producers, some of which are exempt because they are smaller businesses (de minimis) and some is due to companies not registering when they should be doing so – so called ‘free riders’.
Although industry pays considerable fees to the enforcement agencies as part of the PRN system, we understand that they are currently prevented from using this funding to detect and investigate potential free riders. By changing the rules and resourcing the agencies better, this gap could be closed and this would lead to more accurate data reporting. We also believe the de minimis should be reduced to give a more accurate data picture and to share the costs more fairly amongst all producers.
2. The UK does not have the capacity to reprocess all the packaging material we collect so the export of packaging material for reprocessing in other countries has long been an essential part of our system. Export is not unique to the UK and occurs from many other countries.
For some materials, such as metals and paper, this international trade is well established and controlled, but there are thought to be particular issues for the export of plastics that warrant special attention. For example, it is an anomaly that a UK reprocessor has to pay an accreditation fee of £2,616 per site whereas an exporter wishing to send material to new sites only has to pay £85 for the first site and £35 for each additional site. Given this, it is not surprising that the agencies have little funding to regulate exporters.
Consideration should also be given to setting up a central list of approved reprocessing sites overseas that have been thoroughly audited to check standards. This may reduce the requirement for different operators to submit information whilst at the same time allowing for more thorough checks to be carried out.
3. We note that export protocols have been put in place for metals and paper but not for plastic. This means that 100% of the export tonnage for plastics attracts a PRN whereas it does not for other materials. This clearly does not allow for expected contamination or non-target materials. The introduction of a protocol allowing, say, only 75% of the plastic exports to attract a PRN unless an approved sampling regime is put in place by the exporter would go a long way to levelling the playing field for UK reprocessors.
4. The report makes a number of comments about the reliability of packaging data reporting and UK recycling performance. These are not easy data to analyse because the mandatory reporting by producers is only very high level, for example, plastic as a total rather than broken down into polymer or format types, and also there are significant tonnages from unregistered businesses which are not reported.
Accurate reporting is an acknowledged difficulty across most European countries; it is not unique to the UK. For example some countries report packaging when it is collected or when it is sorted rather than when it actually reaches a recycler as in the UK.
We have been involved in detailed research along with WRAP and Defra in an attempt to address these issues and provide more substantiated estimates of total packaging on the UK market, but this inevitably involves a degree of estimation and projection. A wide range of industry experts have been consulted during this process and they are believed to be the best available estimates given the current situation, but we would be very pleased to see further improvements in the future and a more regular review of the relevant statistics.
Placing greater reporting requirements on industry has been rejected in the past as placing too much administrative burden on business, but perhaps now is the time to review this. By giving the market access to this level of information it is much easier for market participants to point out anomalies in the data and help minimise errors or fraud.
5. The report rightly points out that the current system does little to minimise the amount of packaging used or distinguish between easier or more difficult materials to recycle. These objectives were never a major part of the original intentions of the regulations but we hope to see improvements in future to address these and other issues.
The Packaging Essential Requirements Regulations are a parallel set of regulations which are designed to minimise the amount of packaging used and it may be that improvements to these could also benefit the waste and recycling system.
Issues that could be addressed as part of EPR Reform
There are a number of points in addition to those mentioned above which could be further improved as part of the Government’s plans to reform the system in future. We understand the Government intend to consult on detailed proposals later this year.
1. Producers currently only finance a relatively small proportion of the total costs of collecting, sorting and recycling packaging, particularly for household packaging collected by Local Authorities. This will need to change as the UK adopts the requirements for “full net cost” to producers as required by the Circular Economy Package. It will also be important to also consider how this can be done so that it keeps costs under control and also drives improvements to collection efficiencies and consistency.
2. In addition to a greater share of the cost being taken by producers, we support measures to incentivise more recyclable packaging and discourage unrecyclable or disruptive packaging. Currently the system does not provide an incentive for companies to avoid using material that is difficult to recycle, such as black plastics or multi-layer material. Fees based on materials used would be a positive development in the future.
3. Currently there is only limited data available on the financial benefits of the system and transparency of funding. In the future the funding will be significantly increased and so a greater degree of transparency and accountability will rightly be expected.
UK and exports
4. The current system does not distinguish between material reprocessed in the UK and that sent to other countries, which is a particular concern for plastics. In addition to better controls, we suggest that strong consideration be given to requiring a minimum proportion of material to be reprocessed in the UK, or at least within Europe. For example, a recycling target of which x% must be done in the UK. This would need to be set at a realistic level to start with but could then be gradually increased over time to drive investment.
5. Research we have carried out in other countries suggests that one of the key factors in achieving and maintaining a high packaging recycling rate is to implement a comprehensive and consistent communications and awareness raising campaign amongst consumers. This is best done through a centrally funded and coordinated programme of activity.