Missed opportunity to raise steel targets

As part of the Budget announcement on Wednesday (March 21) Chancellor George Osborne announced revised targets for packaging recycling, including an increased target for steel packaging that will rise 1% per year for five years from 2013 from the current rate of 71%, reaching 76% in 2017 (see letsrecycle.com story).

However, many within the industry had urged Defra during the consultation on packaging recycling targets to opt for the introduction of a higher, 2% year-on-year increase in the steel target over the same period, which would have set the final level at 81%.

According to Tata Steel, Europes second largest steel producer, the 76% target has already been met over previous years, and the company is concerned that the lower target will cause the PRN price to drop, giving reprocessors and exporters less of an incentive to become accredited to issue recovery notes.

Missed opportunity

Garvin Freeman, packaging manager at Tata Steel (formerly known as Corus), said: This is a missed opportunity for steel packaging. The government could have further capitalised on steels recyclability and put in place targets that would have helped to ensure that collected material is actually counted under the PRN system.

The low increase in targets means this is a lack of incentive for reprocessors to register as PRN prices will remain low, and we are fearful of further material not being counted within the system.

As steel currently commands a high value, with steel cans reaching 165-a-tonne in March, the concern among steel packaging producers is that if PRNs are not suitably valuable, reprocessors will not see a financial benefit in becoming accredited to issue PRNs on recycled material, and this material will then not be counted toward packaging recycling targets.

And, according to Tata Steel, the amount of steel packaging recorded under the PRN system since 2008 has already fallen by 10%, which the company claims is due to collected material being reprocessed and not counted under the PRN system. The company says that there is a direct and measurable relationship between recycling targets, PRN prices, the number of accredited reprocessors and the amount of recycled steel packaging being recorded.

In February 2012 the Environment Agency revealed that it had seen a decline in the number of applications for accreditation to issue PRNs, with exporters of steel a particular area where accreditations had dropped off (see letsrecycle.com story).