OPINION: The uninitiated could be forgiven for thinking that the consultation on Packaging waste Recovery Note (PRN) reforms is fiddling at the edges compared with the world-leading system we were promised when Michael Gove was in office back in 2019. To the outsider, it may simply look as if the word “recovery” has been replaced by “recycling”, resulting in the same initialism to make the Packaging waste Recycling Note (PRN).
However, some key changes outlined in the joint consultation from UK Governments could improve the system enough to ensure it lasts well beyond the next review in 5 years’ time.
Both producers and recyclers want to reduce the instances of unnecessary extreme volatility, whether it be highs or lows. While some of the system’s merit is in the fact that prices move to support a year-on-year increase in the amount of material recycled, prices that half or double in a single day are not helpful, or in fact, necessary. These market corrections should take place over a longer time-period and be a result of genuine market data. These slower fluctuations would help both parties to financially plan for the year ahead. There are two key proposals in the consultation that would help to reduce these extremes.
Firstly, implementing mandatory and timely recycling reporting would immeasurably improve the data. Many of the spikes are a result of conjecture when looking at recycling data that all too often has far too many holes in it due to missed reporting deadlines. Analysis performed by Ecosurety shows that more than half of the recyclers in Northern Ireland missed April’s reporting deadline. Improving the completeness of quarterly reporting would mean that the industry has accurate data on the supply of PRNs to respond to. The Governments have proposed that this data could be reported monthly, which may be a heavy administrative burden for smaller firms. While more regularly data would help to reduce price variation, it must be accompanied by better enforcement and more meaningful sanctions for late data submissions. The accuracy of the published data is a greater concern than the frequency. If the former cannot be improved, the latter will have little or no effect.
However, there must be a quid pro quo if recyclers are to put in more data reporting effort. Moving producers’ packaging placed on market data (PRN demand) to biannual, from the yearly reporting at present, is a welcome step. However, the sanctions and enforcement for missed reporting deadlines must mirror those imposed on recyclers. When it comes to reducing volatility, the accuracy of PRN demand is just as important as PRN supply. However, some have suggested that producers should report as regularly as recyclers BUT we don’t see the volatility swings in producer data
Secondly, allowing January PRNs to count for either year, current or previous, just a December PRNs have always been allowed to be “carried forward” would help to improve the system. Clearly this measure does not magically make more recycling happen, but it would limit the non-compliance cliff edge that producers and compliance schemes face at year-end. In the current system, producers must buy PRNs to achieve legal compliance, but recyclers do not need to sell, which is why proposals for mandatory registration of businesses recycling packaging are also to be welcomed as they would ensure a complete packaging recycling accounting system. Without mandatory registration, the
Governments may have to use the notoriously difficult to calculate “substantiated estimates” to meet packaging recycling targets as they have done elsewhere, e.g., for the waste electrical and electronic equipment regulations.
Allowing PRNs to effectively count towards the prior year target may seem like it is a way to kick the can down the road if recycling rates are low. However, it is simply a way to smooth out end of year price spikes of which many large producers and some schemes have the scars when a reprocessor realises that they have the last “golden” PRN that must be bought.
Even though there is much to admire in terms of the ideas put forward in the consultation, there will be continued consternation from UK investors who bemoan that lack of support or preferential treatment for UK reprocessing. None of the proposals tackle the fundamental problem that we can’t wash, sort and recycle enough material, especially plastic, here in the UK. Concerns that lower quality material is exported, and not properly recycled, will remain post-reforms. Furthermore, it looks like the Government’s hope that the plastic packaging tax would drive investment seems unfounded, but time will tell.
As policy is progressing the Governments have moved towards more pragmatic solutions, knowing that they do not want to undo any of the headway made since the turn of the century. However, in some proposals this pragmatic approach has gone so far that it no longer obeys the fundamental principles of producer responsibility, namely that the cohort responsible for the material placed on the market, should cover the end-of-life costs. This is evident in one of the options put forward for tackling the issue of PRNs being issued on material that should have gone through a Deposit Return Scheme (DRS) but that were ultimately disposed of at the kerbside.
If DRS material cannot be differentiated from other packaging material at a reprocessor’s site, the only logical conclusion is that beverage container producers should cover the PRN cost. However, one of the Governments’ options proposes that all packaging producers share the burden. It cannot be that a builder’s merchant, or any other non-beverage company, should have to pay for a poorly designed DRS. On this issue it is very difficult to pass judgement without seeing the plan for English, Welsh and Northern Irish DRS systems. However, it seems logical that unredeemed deposits pay for PRNs from material that ends up in household recycling due to poor efficacy of the DRS system, ensuring that DRS producers do not pay twice.
There are also some highly uncontroversial proposals within the consultation, such as introducing competency thresholds for those operating recycling sites or compliance schemes. It is crazy that these haven’t already been introduced to provide the regulator, and everyone in the system, with assurance that others in the system are truly competent. Hopefully, by the time the consultation closes on the 21st of May, there will be a clear signal from industry on this issue, and others, so that the Governments’ have a mandate to make those necessary improvements to the PRN system that has barely changed in two decades. I’d urge all stakeholders to seize this last opportunity to influence the system before the big changes arrive by responding to the consultation directly.
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