OPINION: ‘Why lessons need to be learnt from PRN fiasco’

OPINION: The market for Packaging Recovery Notes (PRNs) and Packaging Export Recovery Notes (PERNs) finally re-opened this week almost two months into the 2026 compliance year.

I know behind the scenes, people at Defra and the regulators have been working hard to get it up and running, working with people like myself and other trade association and compliance scheme representatives. We’ve advised and helped prioritise and crucially help them understand the severity of the situation on cashflow for recycling businesses.

Because we represent companies across the majority of materials covered by the PRN system, The Recycling Association was really at the forefront of understanding the implications, challenging the powers that be on them, and working for solutions that favoured reprocessors and exporters.

Despite Defra’s press office telling anyone who asked that the market was still open, and technically it was, the reality was that without the ability to issue PRNs and PERNs, and for compliance schemes and producers to accept or reject those, the spot market was effectively closed. At least the policy and digital teams at Defra understood that.

But now we need to take a step back, assess the hellish last eight months or so and learn lessons.

One key learning for me is that the industry needs to be engaged better. From the registration and accreditation process, to the complex summary logs to record data and the failure to get the new Report Packaging Data (RPD) system up-and-running to replace the National Packaging Waste Database (NPWD), this could all have been done smarter and more effectively by working closely with stakeholders. These include trade associations like us, compliance schemes, and businesses themselves.

Another lesson is that guidance needs to be clearer, and there needs to be better communication to businesses. Again, this relates to engagement, but regulators were adjusting guidance after it had gone live or just before deadlines following feedback from Members of The Recycling Association and others. This could have been avoided if help had been sought before everything went live. I’d be happy to assist regulators draft guidance too, as long as they are clear what they are wanting and asking for to begin with.

Regulators and Government also need to stop thinking that legitimate businesses are the problem. Granted, the high fees for registration and accreditation and data reporting requirements will provide a barrier to entry for those who want to find ways to de-fraud the system. But the majority of companies should be supported and treated as a vital part of the circular economy, rather than criminals that haven’t been caught yet. Of course, we welcome measures that will really work to weed out and prosecute the criminal element that undermines the good done by legitimate firms.

They also need to remember that these businesses may well be struggling right now. Global markets across many materials are challenging, not least if cheap virgin or recycled materials are being imported into the UK. They’ve also got higher costs for labour, energy, transport and just about everything else. They’ve paid huge registration and accreditation fees too. They aren’t a cash cow for everything regulators want to do.

My final point is about planning. It is clear things were not going to plan, but we didn’t know until too late. To find out that the PRN market would not be operational at the start of the 2026 compliance year on 22 December when many people had already finished for Christmas and just days before the new compliance year began, meant two things:

1. The planning required to meet development timescales had failed to get the new RPD system ready, and it was also obvious quite quickly that NPWD wouldn’t be considered as a back-up.
2. Businesses who were planning months not days ahead based on an active PRN market could have been screwed over by lack of cash, and to announce this when Defra did, was not good enough. I know a few businesses have been hanging on by their fingertips, plunging into reserves, taking loans and asking for favours such as delaying payments to suppliers.

We are where we are, and hopefully we are coming through the worst of it and now seeing the other side. I hope those businesses teetering on the edge can be pulled back from an influx of cash in the coming weeks.

This has been a horrible period for those recycling companies involved, and I know we can learn some lessons so they don’t have to go through this again. My key takeaway is that Defra and regulators need to learn to trust the recycling industry and work with it in everyone’s best interests.