Not immediately obvious where PRN revenue spent

The Environment Agency has acknowledged that it is “not immediately obvious” where all PRN revenue is being spent after revealing that £14 million of the money raised last year cannot be accounted for.

Under the Packaging Regulations, companies who handle a specific amount of packaging each year are obligated to pay towards the cost of recycling it. They are set certain recycling targets which they meet by buying packaging recycling evidence, known as PRNs, from approved reprocessors and exporters.

Proceeds from their sale to producers are intended to finance improvements in the collection and reprocessing infrastructure across the UK.

However, transparency of the system has long been a problem and the Agency said that £14 million of the £84 million in PRN revenue raised in 2009 was hard to trace due to the nature of the reporting system. This is a concern because producers need assurance that their money is making a difference and local authorities need to know if they can rely on some benefit from the system.

The information has to be reported on the Agency's National Packaging Waste Database for each material at the end of each compliance year.

The Agency said: “The data reported to us shows that of the £84 million, a total of £14 million has not be allocated to one of the three categories set out in the regulations (collection, capacity and end markets) or retained for future expenditure against one of these categories.”

Constraints

Commenting on the figures, Chris Grove, the Agency's senior advisor for waste and resource management, acknowledged there was room for improvement and said that the Agency was working with the government on possible changes to the system.

This follows a consultation being launched by the previous government entitled ‘implementing the packaging strategy' (see letsrecycle.com story), which set out plans to make the new system more transparent including the introduction of more specific revenue expenditure reporting categories and guidance. It is as yet unclear whether the new government will take these forward.

He said: “There are some constraints in the PRN revenue reporting system which mean it is not immediately obvious where all the PRN revenue is being spent. However, we carry out regular compliance monitoring of accredited reprocessors and exporters, which includes an assessment of the business plan submitted with their application for accreditation. This monitoring includes an assessment of how PRN funds are being used.

He added: “The recent Defra consultation has proposed a number of changes to the way PRN revenues is reported to us, which if implemented by government will improve the transparency on how PRN revenues are used by industry. We are actively working with government to ensure any changes provide a positive benefit to the PRN system.”