OPINION: Is the PRN market being manipulated?

After provisional packaging data for the second quarter of 2022 was published last week, Phil Conran, consultant at 360 Environmental and former chair of the government’s Advisory Committee on Packaging, discusses some issues with the current system.


OPINION: The PRN market works on the same supply and demand laws of any commodity market.

If the demand reported by producer data exceeds the supply reported by reprocessors and exporters, prices will rise and vice versa. The market relies on data published by the Environment Agency to inform their perceptions on how the balance will evolve over the year whilst taking into consideration other factors such as global constraints and the economy.

Phil Conran is the former chair of the Advisory Committee on Packaging and a waste consultant

The system requires data to be submitted in line with legislation, with producer data required by mid-April and recycling data reported quarterly. Once reported, both are dynamically updated with the producer report, for instance, being revised every time new producer data is submitted.

Whilst the legal deadline for producer registration is effectively mid-April, late registration is not an offence and producers only have to pay a late registration fee of £110. This creates little incentive to register on time, but each year 90-95% of producers manage, with often only smaller producers who have less impact on the demand side registering late.

Household names

The current public register for packaging producers shows that a number of companies have yet to register for 2022. Were these small companies, the impact would be minimal, but it includes such household names as Morrisons, Boots, Argos and Unilever. It is estimated that missing registrations are likely to account for over half a million tonnes of additional packaging. Morrisons alone are thought to be likely to add around 100,000 tonnes to the glass target and 30-40,000 tonnes to the plastic target.

Missing registrations are likely to account for over half a million tonnes of additional packaging

The recent publication of the Q2 recycling data has highlighted the impact of these late registrations. If you apply the estimated missing tonnage, it is likely to turn the glass and plastic from being reasonably comfortable to significantly short and to make the overall recycling target look extremely challenging.

‘Powerless’

The EA and other Agencies seem powerless to force these companies to register but more needs to be done to expose their position. There are concerns that some late registrations may be a deliberate attempt to manipulate the market by creating a false sense of national compliance and the sharp drop in plastic PRN prices since the Q2 data was published suggests this might be working.

But there is no excuse for companies to be this late and it is time that the Agencies published the names of those businesses that they know are still to register to hopefully force these companies to comply with their legal responsibilities.

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