Packaging data suggests ‘impossible’ glass target

Defra has said it still expects schemes to meet their 2012 packaging recycling targets for glass despite new data suggesting this may be impossible.

Provisional figuresfor the third quarter of 2012 published on the Agencys National Packaging Waste Database last night (October 23)show no improvement in the amount of glass packaging recycled compared to the first and second quarters, with just 350,000 tonnes reprocessed or exported.

This means that an incredible 565,000 tonnes of glass packaging recycling will be required in the fourth quarter of the year in order to meet the total 2012 obligation of 1.7 million tonnes (see table below) -more than has ever been achieved in a single quarter before.

The figures also show that compliance in steel for the year is likely to be tight, while there has been some improvement in plastics.

The glass data has causedconcern among those producer compliance schemes who have not yet complied in glass and there are fears that some may not now bother to purchase glass PRNs if they believe they will still not achieve compliance.Some are looking to Defra and the Agency to see if any tweaks could be made to the PRN system to help improve the situation as they believe meeting the target is now’impossible’.

However, Defra and the Environment Agency have today issued statements warning that they still expect schemes to comply.

A Defra spokesperson said: We expect producers to make every effort to comply with their packaging recycling and recovery obligations. The Agencies will take appropriate enforcement action against those who do not comply. We will continue to monitor the situation.

A spokeswoman for the Environment Agency said: “The Environment Agency regulate the system but we have no power to influence the price or the volumes of waste packaging being collected. It is up to the market to resolve fluctuations. In a system based on producer responsibility we expect schemes to comply. We will continue to collate figures on reprocessing and regularly update Defra.”

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Table showing recycling and recovery carried out in 2012

Source: letsrecycle.com analysis of data from the National Packaging Waste Database

Impact

The low glass packaging recycling figures have been put down to the removal of fraud from the PRN system as well as strikes at the Portuguese docks at the end of September, which impacted upon glass exports.

However, some have also blamed a failure by compliance schemes to address shortfalls in glass earlier in the year.

One major glass reprocessor told letsrecycle.com: I would think we are going to fail, but not on a huge scale.The reason we wont comply is because some people in the compliance industry didnt go out and buy the PRNs they needed in the first quarter. If we had seen an increase in April we would have another three months and we would have complied this year.

The glass reprocessor added that, despite this, the subsidy received from higher glass PRN prices was starting to kick in, which would lead to improvemenst in the quarter four tonnage.

He said: The Portuguese ports are now open and the high PRN price is starting to make end uses that were otherwise not viable, viable. We are seeing the stockpiles start to clear. The glass is going into aggregates as the high PRN price is making the transportation of the material viable.

Compliance Schemes

Valpak, the UKs largest producer compliance scheme, expressed disappointment over the glass figures which it said were at the lower end of its expectations. However, it said that it thought that the targets could still be met, provided all schemes were taking the necessary steps.

Duncan Simpson, sales and marketing director at Valpak, said: We have been working with reprocessors to boost supply over the last few months due to the lower Q1 and Q2 returns and we had expected this to start to become apparent. We are aware of some export tonnage which missed the 30 September cut off for Q3 and thus the Q3 figures are lower than otherwise would be the case.

“The work we have been doing will ensure that additional tonnage flows through the system in Q4 to meet Valpaks requirements and go a long way towards meeting the requirements for the UK as a whole. However, it is vital all parties work constructively together over the last few months of the year to meet the legal obligations of schemes and producers.

Producer compliance scheme Budget Pack was less optimistic and raised concerns that some schemes may not meet their targets. Commercial manager James Piper said: “With the recent figures indicating a greater challenge for balancing the supply and demand tonnage in glass, we are concerned about the position that other schemes producers may find themselves in at the end of the year if their scheme is not able to comply.”

Chris Taylor, a PRN trader at Clarity Environmental, expressed event greater concern.

He said: “The UK currently stands on the brink of non-compliance for the first time since the PRN system was introduced as the gass market continues to fall short of target. Latest figures suggest that Reprocessors and Exporters have the impossible task of covering a 565,000T deficit in Q4.”

PRN prices

Thomas Rickerby, senior market operator at the Environment Exchange, explained that glass PRN prices, which currently stand at 75 a tonne, had not moved following the publication of the Q3 data as would normally be expected.

He suggested this may be because glass reprocessors may not want to raise prices any further for fear of compliance schemes not bothering to buy any at all and because compliance schemes may be in shock.

He said: The problem is that it is so bad at the moment that people will question whether or not we are going to be able to meet the target. We require a 565,000 tonnes final quarter which will require work which is unprecedented. There is a real danger that there are people who will not comply this year.

Mr Rickerbysuggested that Defra needs to go back and look at the targets and the data for how much glass packaging was placed on the market, following cases of fraud. He commented: The glass market almost needs to be totally re-set. We need to look at what is being recycled and being put on the market.

Steel

While not as bad as in glass, the quarter three figures were also not very good for steel, where there was little improvement in tonnages compared to quarter two meaning that compliance this year will be tight. On the back of this, the Environment Exchange said that steel PRN prices rose today from 35 to 45 a tonne.

Plastic

However, there was a more positive picture with regards to plastics.The quarter three figures show a welcome improvement with recycling rising to 170,000 tonnes. On the back of the figures, the price paid for plastic PRNs today fell from 22 to 19 a tonne.

Commenting on the significance of this, Mr Simpson said: Together these should ensure that the UK complies in 2012 and is a very promising start for meeting the higher targets for 2013 onwards. The system is demonstrating that an increased incentive drives more activity to meet the legal requirements for producers.”