Quarterly data suggests UK on track to meet 2009 packaging targets

Earlier this year, concerns were raised over whether the UK would achieve both its business and European packaging recycling targets due to a fall in demand for recovered materials driven by the recession. This was particularly a worry in the case of steel where domestic demand had suffered by the withdrawal of steel giant Corus from the market (see letsrecycle.com story).

However, the Environment Agency last week published long-awaited figures for the third quarter of 2009 on its National Packaging Waste Database which show that over 1,881,000 tonnes of packaging was reprocessed or exported – up from 1,725,000 and 1,700,000 in the first and second quarters respectively. This means that only 1,528,000 would be required in Q4 to meet the country's overall obligation of 6,834,000 tonnes.

And, in terms of steel, the amount of material reprocessed or exported has risen from around 59,000 and 89,000 tonnes in the first two quarters of the year respectively to around 115,000 tonnes – meaning that, including carry over from 2008, only around 96,000 more tonnes of material needs to be handled by the end of the year to cover the 367,000 tonne business target (see table below).

Although the figures are still subject to change, and some reprocessors still have to report, they suggest that the business targets and European targets for all materials look achievable and subsequently prices for recycling evidence – known as Packaging Waste Recovery Notes (PRNs) and their export equivalent (PERNs) have started to fall considerably across the board.

While this is likely to be welcomed by some in the sector who have been struggling to cover their obligations and waiting for prices to come down, others who opted to pay the higher prices are expected to be less pleased.

Angus Macpherson, managing director of The Environment Exchange, which runs a marketplace for PRNs, said: “People have been surprised by the levels of recycling going on which are much greater than anticipated. We have seen the PRN market dropping quite quickly over the last couple of days. Glass, steel and plastic are all falling. Prices have taken a bit of a hammering.

“I suspect those who bought early in the year will be annoyed that they bought at higher prices I think some of the larger compliance schemes with bigger obligations are probably very relieved.”

Phil Conran, of consultancy 360 environmental, added: “Overall, the numbers show that the UK will easily meet the business targets and the EU targets that are still in the background and which have to continue to be met each year.”

“All materials look as though they will have significant surpluses of evidence available which is being reflected in falling prices for PRNs across the board.”

Steel

For steel, of the 115,000 tonnes of packaging handled between July and September, a massive 90,000 tonnes was exported. This has been attributed to the high price of the steel PERN, which has risen at times to well above £120 a tonne, providing a financial incentive to exporters to take the material.

However, a few commentators have noted that because the price being paid for steel PERNs has now fallen to closer to £45 a tonne, they do not expect quite such a strong performance on the export front in the fourth quarter.

Duncan Simpson, marketing director for compliance specialist Valpak, said that he even believed there could still be a steel evidence shortage come the end of the year.

He said: “Even though steel has had a good quarter it will still be about 20,000 to 30,000 tonnes short.”

Despite this, David Williams, managing for Corus Steel Packaging Recycling, said that Corus' re-entry to the steel market would start to be felt in the fourth quarter – helping to redress this situation (see letsrecycle.com story).

He said: “We are taking cans in and you should see the results of that in quarter four. We are expecting to take at least 50,000 tonnes next year and for this year it is hard to say. But we are trying to get as much material as we can.”

Other materials

Alongside steel, the Q3 figures reveal a notable rise in the amount of aluminium and most notably glass packaging which was reprocessed. An unprecedented 469,000 tonnes of glass was sent for reprocessing or exported between July and September, which is around 70,000 tonnes higher than for each of the previous two quarters – causing some to suggest that they could be subject to change, as they are still provisional.

For aluminium, over 17,000 tonnes was recovered, of which around 7,000 tonnes was exported.

However, Mr Simpson urged a note of caution with regards to the material markets going forward – pointing to the crash in demand for materials for reprocessing in late 2008.

He said: “The situation for most materials is that they should comply without a problem”.

“But despite this it is important for everyone to remember what happened and when it happened last year. If there was a similar situation there could be price rises at the end of the year, particularly for volatile materials such as aluminium and plastics.”

 

UK packaging recycling figures for 2009

Material	Carry over for 2008	Q1 2009 (tonnes)	Q2 2009 (tonnes)	Q3 2009 (tonnes)	Annualised 2009 performance	2009 business targets as of October 26
Paper	154,983	765,499	744,307	768,472	3,037,637	2,504,136
Glass	66,836	403,100	397,333	469,429	1,693,149	1,665,155
Aluminium	2,237	13,530	16,511	17,626	63,556	55,548
Steel	8,091	58,576	88,364	115,487	351,197	367,338
Plastics	28,076	157,269	129,311	152,754	596,010	510,007
Wood	15,047	206,973	197,948	221,362	835,044	215,624
Total Recycling	275,270	1,604,897	1,594,035	1,745,130	6,576,594	6,363,377
Total Recovery	275,470	1,724,857	1,711,442	1,881,029	7,074,282	6,834,259

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