Packaging recycling increase in first quarter of 2005

Today saw the publication by Defra of recovery and reprocessing data for packaging waste in the first quarter of 2005. The figures show a 5% overall increase on the amount of packaging waste recycled in the first three months of 2005 compared to the same period in 2004.

Increases in the recycling of paper, glass and plastics have been seen by experts to be a promising sign for 2005, but the figures also reveal some concerns in the aluminium and steel packaging streams (see table below):

Initial analysis suggests that producer responsibility obligations for packaging companies in the paper (up 5%) and glass (up 12.7%) and wood streams should be met without too much trouble. This, particularly since one large paper reprocessor and one small glass reprocessor did not submit their data in time to be included in these latest figures.

The slight decrease in the wood reprocessing figure (down 3.7%) shouldn't be too much cause for alarm as the amount of wood recycling is already much higher than specific materials targets for wood. Wood PRNs have been largely used towards general recycling obligations, as have paper PRNs.

Metals
But, the 2005 figures show an 8% decrease in aluminium reprocessing and a 6% decrease in steel reprocessing compared to the first quarter in 2004.

With a number of obligated companies failing to comply with their Packaging Regulation requirements to purchase PRNs last year (see letsrecycle.com story) – partly because of the difficulty of buying steel and aluminium PRNs last year – these performance decreases suggest further trouble could lie ahead in 2005.

Experts suggest that the reduction in steel reprocessing has partly been caused because of a downturn in exports, which is itself a result of a dampening of demand for steel abroad. But, it is not yet fully understood why the particular shortage of aluminium PRNs is being seen.

Plastics
One particularly positive note in the figures appears to be a significant upturn in plastics packaging waste reprocessing – up almost 18% on this time last year. This increase, if borne out for the rest of the year, could mean the shortfall in plastics recycling seen last year may be diminished.

Additionally, Defra has stated that one large plastic reprocessor and one large plastic exporter did not submit their data in time for this set of figures – meaning potentially even more growth in plastics reprocessing has been seen than this data reveals.

Although experts initially believe this increase in plastics reprocessing may not mean compliance is as “comfortable” as in the paper, wood and glass sectors, it is being seen as an encouraging sign. Although the Q1 2005 plastics figure (92,262t) was lower than the Q4 2004 figure (99,430t), the last quarter of 2004 included the affects of the festive season, which traditionally sees an increase in packaging recycling.

Figures
Defra states that for this year the total number of producers registered under the Packaging Regulations for 2005 is 6,360. But, the Department has not published obligation data showing how many PRNs will need to be purchased overall – an important consideration in the negotiation of PRN trades.

The full figures for the reprocessing and recycling in the first three months of 2005 were as follows:

Market
PRNs – packaging waste recovery notes – are issued by packaging reprocessors against material recovered or recycled and bought by packaging producers or their compliance schemes. These producers or schemes use the PRNs as evidence that they have put money into the reprocessing infrastructure to help meet UK producer responsibility targets set by Europe for 2008.

Each year these producers and schemes have to meet UK targets to purchase a certain number of PRNs of each material type. The purchase of PRNs is affected by the market forces of supply and demand, with well-supplied material streams seeing comparatively low prices for their prices, but PRNs in short supply are sold at a much higher price.

Prices for aluminium PRNs, for example, which are currently seen as being in fairly short supply, have hit unprecedented levels this month – sales of 150 per tonne have been recorded on the online trading platform the Environment Exchange.

Unrealistic
Aluminium reprocessors have told letsrecycle.com this is an unrealistic level caused in part because many aluminium PRNs are now procured under contracts between compliance schemes and reprocessors, leaving fewer available on the spot market.

Some companies not complying through compliance schemes have therefore been “panic buying”, although a more “realistic” price for aluminium PRNs at the moment would be closer to 60 per tonne, reprocessors believe.