Non-reprocessors able to issue PRNs for first time

Metal merchants and collectors will be able to apply to become accredited to issue PRNs next year for the first time under new guidance issued by the Environment Agencies this week.

Up until now, only packaging reprocessors and exporters have been able to become accredited to issue PRNs, because this is where the material was deemed to no longer be a waste.

However, the Department for Environment, Food and Rural Affairs wrote to stakeholders in May (see letsrecycle.com story) explaining that new European End of Waste Criteria for ferrous and aluminium scrap would mean that companies lower down the metal packaging waste supply chain would also be able to claim end of waste and therefore qualify.

The Department held an informal three-week consultation over the summer to assess the implications of the change (see letsrecycle.com story) and, although this revealed a significant level of objection to its interpretation of the law from the 29 respondents, it decided to press ahead with the changes.

This is despite the department acknowledging itself that the changes were likely to cause some disruption is the PRN market.

Guidance

Now, the Environment Agencies have issued guidance explaining the changes and how they should be managed. The document explains that activities which can be accredited include recovered scrap iron, steel and aluminium which meets the criteria of the EU end of waste regulation.

But, they stress that applications will only be considered if companies meet the technical specifications set out in the Directive and have a quality management system in place which has been verified by an independent body that has been accredited by the UK Accreditation Service (UKAS).

Applicants will also be expected to pass on a Statement of Conformity with any load of scrap metal recovered under the end of waste criteria to establish a full audit trail. They will also be required to tell any businesses they supply with scrap metal that PRNs have already been issued on the loads.

For their part, companies which are receiving scrap iron, aluminium or steel are expected to check if their suppliers have already issued PRNs on it.

Worry

The changes have been viewed with a degree of caution by many in the packaging waste sector, who are worried about their ability to affect the market.

In response to its consultation over the summer, stakeholders urged Defra to maintain the status quo or at least carry out a full impact assessment before making any changes. Others suggested that the Department should change the point at which PRNs can be issued in the waste chain under the UK Packaging Waste Regulations an effective de-coupling of point of issue of PRNs from the point of end of waste/recovery.

Particular concerns about the changes include the potential for double counting whereby reprocessors might inadvertently issue PRNs of material which had already had PRNs issued against it.

Stakeholders also fear that some companies might become accredited for End of Waste but not to issue PRNs, meaning that material could be lost to the PRN system.

Another worry is that, if too many companies become accredited to issue PRNs, the money they raise will be spread too thinly and not be able to subsidise important new recycling infrastructure although it could also provide a potentially important revenue stream for collectors.

Audit trail

Commenting on the responses late last month, Defra said that the audit trail provided by the Certificate of Conformity alongside existing Waste Transfer Notes would counter any concerns over double-counting.

And, it said that it could not change the point at which PRNs were issued in the waste chain because this would require substantial changes to the existing UK regulations and could be viewed as undermining the intention of the revised Waste Framework Directive and End of Waste Regulations which are seeking to harmonise the point at which waste ceases to be a waste across all regimes.

PRN prices

Despite the difference in opinion, the main factor which is expected to determine whether companies become accredited to issue PRNs further down the supply chain is the price of Packaging Waste Recovery Notes which at present do not provide much of an incentive. For example, aluminium PRNs are currently trading at around 4.50 a tonne, down from 30 a tonne just a year ago. This is not much compared to the price paid for a tonne of baled aluminium cans, which currently stands at around 1,000.

It is also expected that the additional administrative burden involved with achieving End of Waste will be too costly and time consuming for many companies.

What is more, if companies want to be accredited from January 1 2012 they have to submit their applications to the Environment Agency before September 30 2011 and meet the End of Waste requirements before then.

Whatever the outcome, many are watching the situation closely as other materials such as glass and paper are expected to have European End of Waste criteria of their own soon meaning that the point at which PRNs can be issued in the supply chain for these materials will also change.

Defra said: We will, of course, continue to monitor the impact of this measure in the next few months.”