Targets are set each year by the government. This dictates how many packaging recovery notes (PRNs) obligated producers need to buy to meet their obligations. They are set by percentage of material placed on the market.
The sector had been eagerly awaiting targets for 2024, so producers can plan ahead.
Provisional targets, which are usually UK-wide, were outlined by the Northern Irish government in a statutory instrument last week, as set out below. It is understood that Defra has confirmed to the sector that these will apply UK wide, with a public announcement due soon.
This means that all targets have remained the same for 2023 to 2024, except for wood, which has risen from 35% to 42% and the overall recycling rate, which has risen from 77% to 80%.
Market
With targets looking comfortable for 2023 (see letsrecycle.com story), there was hope that these would be raised for 2024 to enable higher PRN prices to boost recycling.
However, the lower rate could see prices now soften for PRNs, even this year, which while welcomed by producers, will be felt by the recycling industry as they can not rely on PRN revenue.
One compliance expert from the industry said the targets are “unambitious all round” and questioned the thinking behind keeping targets at the same level, warning that this could “crash the market next year”, with plastic PRNs at around £50 (compared to £300 or so this year).
There have also been warnings that the news will impact the PRN price this year, with wood PRNs already reportedly “firming up”.
‘Rollercoaster’
Waste consultancy 360 Environmental said in response to the new targets that quarter three data shows a probable surplus in recycling across various materials, exceeding the targets for this year, and the latest monthly data predicts that quarter four will likely echo quarter three’s results, especially in plastic recycling.
“This indicates a likelihood of a considerable excess tonnage carrying over into December,” the consultancy said.
It added that with steady targets, next year’s obligations might decrease, and if recycling rates stay high, prices for PRNs could “plummet”.
However, the company mentions there are several factors that might disrupt this scenario. There are concerns in the market about potential fraud in plastic recycling, possibly due to illegal exports to Turkey, imported materials being re-exported for PRNs, fake documentation for non-existent quantities, and other scams. “These fraudulent activities thrive on high PRN prices and could fade if prices drop”.
360 Environmental said: “All in all, it suggests a rollercoaster year ahead, the last year under the 2007 regulations under current plans although of course, a new Environment Secretary and a general election and potential change in government could see that all change.”
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