The call for higher landfill costs came last week when a delegation told government officials about the industry's current thinking on the way the PRN market is developing. At a meeting with the Department for Environment, Food and Rural Affairs, the group – which included Ron Humphries, president of the British Recovered Paper Association and Martin Oldman, chief executive of the Confederation of Paper Industries – pointed out that the UK's paper and board recovery rate is well below that for Germany and Holland.
The meeting came about after some disagreement this summer within the paper sector over export PRNs. UK mills had started to see supplies of old-KLS (cardboard) slow and were concerned that material was being sucked abroad because exporters could benefit from receiving export-PRNs (PERNs). Now the differences between UK mills and the merchants have been patched up and a statement issued by the delegation last week said: “We have agreed that there is unlikely to be a single model that will meet all the interests of reprocessors and recovered paper merchants.”
He added: “We all want to see a dynamic and prosperous domestic papermaking industry but, given the competitive and international nature of the market, it is inevitable that there will be a difference of opinion on how this can be achieved.”
Value
Kathy Bradley, Paper Federation director for external affairs, was also a member of the delegation to DEFRA. She said: “The PRN system has provided some value for the industry, but varying PRN prices have contributed to uncertainty in a market where, all parties agree, the most important criterion is stability. Problems occur for both parties when there is either excessive or sluggish demand for used cardboard.”
She added that the paper and board recovery rate in the UK is 44.2% compared with 63.5% in Holland and 74.3% in Germany. “The most powerful driver for recycling across the rest of Europe is the high cost of disposal. Landfill costs in the UK are much lower than Germany at an average 150 Euros per tonne and Holland 68 Euros per tonne plus tax.”
Mrs Bradley continued: “The industry believes that a substantial rise in landfill costs would help provide a massive incentive for recycling; provide a guaranteed supply of competitively priced recovered fibre; and overcome most of the problems associated with the PRN system.”
Market forces
Ron Humphries said: “Looking at the PRN from an industry perspective, the issue with regard to the inconsistency in the PRN and PERN market has gone away as a result of market forces. Our meeting saw a very strong commonality between us all on the major issues which focus around the landfill tax and landfill costs and the importance of directing material away from the waste stream.
“The alternative to landfill is recycling which is eminently more attractive. Higher costs landfill would create a definite barrier to the easiest route for disposal and be the biggest driver to meeting government targets.”
Further meetings within the paper sector are to be held to discuss the landfill issue and to ensure views are known over PRNs. Participants will include the Independent Waste Paper Processors Association, the Paper Federation and the British Recovered Paper Association.
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