Currently, this is down from 7,616,936 tonnes in 2020, though the obligations could still change. The ‘obligation’ tonnage relates to the amount of PRNs – packaging waste recovery notes – that will be needed in 2021 and works in line with packaging recycling targets.
Defra published the packaging waste recycling targets for businesses for 2021 and 2022 in November 2020 (see letsrecycle.com story). It also confirmed then that there would be no recovery or energy from waste targets, meaning that from this year recovery evidence is not needed.
Commenting on the announcement of the obligation numbers, David Daw, project analyst at Valpak, said: “The release of the packaging obligation figures on the NPWD is always eagerly anticipated as it gives an indication of the actual demand for PRNs from producers.”
Mr Daw explained that the overall demand would be down, largely due to the removal of the recovery obligation which was around 620,000 tonnes last year. Despite this, he thought that recycling obligations would most likely be higher.
“Recycling obligations… are generally expected to be a bit higher for most materials
He said: “Recycling obligations, though, are generally expected to be a bit higher for most materials, due to increases in business targets of all materials apart from wood, where targets have come down.”
Register
Legislation places a PRN purchasing obligation on companies with turnovers of more than £2 million which handle more than 50 tonnes of packaging a year. These companies are referred to as ‘producers’.
The reported obligation is only an indicator of the final 2021 demand as many companies have yet to appear on the register. It is expected that the total demand will increase during the year as late registrants appear.
At 6,247, there are currently nearly 700 companies fewer registered than at the end of 2020. Mr Daw said that in most years apart from 2020, the starting number has been around 400 lower at the start than the end of year total. “It is expected that while registrations will increase from the current total, they will end up being significantly down from 2020 due to impact of Covid on the economy.
“This is because a much higher number of companies will have gone bust and others fallen below the thresholds that would be the case in a typical compliance year.”
Turkey
Tom Rickerby, head of trading at the Environment Exchange (t2e) PRN trading platform, also noted the decline in numbers of registered companies. He told letsrecycle.com: “With 87 fewer producers registered than at this time last year and nearly 700 less than at the close of the 2020 compliance year, the initial release of the obligation data gives us a good insight into the change in packaging consumption during the pandemic.”
Mr Rickerby said it had been a “comfortable start to the year” for most materials in terms of companies meeting obligations. However, he warned Turkey’s decision to expand the ban on the import of plastic waste could soon have an impact (see letsrecycle.com story).
“The rise in packaging placed on the market in 2020 and subsequent increase in PRN obligations for 2021 has largely been offset by good recycling capture rates and a surge in both prices and demand for secondary commodities in quarter 1,” he said. “Strong PRN generation has seen PRN prices in paper, wood, steel, aluminium and plastic soften from the beginning of the compliance year.
“However, this week’s news of a plastic import ban into Turkey is likely to overshadow its comfortable start to the year.”
And, the t2e packaging expert also reflected on pressures in the glass remelt sector, which involves PRNs issued by glass recyclers to make new glass, rather than aggregates. Mr Rickerby said: “Glass remelt is the one material currently struggling to meet a significant jump in its 2021 obligation. Confirmation of a Q1 supply deficit has pushed PRN prices up 24% to a 28-month high of £43.50 per tonne on the t2e Spot market.”
Market volumes
The NPWD data currently says 9,620,212 tonnes of packaging was handled in 2020, down from 9,996,088 in 2019, a point picked up on by Paul Van Danzig, policy director at Wastepack.
Mr Van Danzig told letsrecycle.com: “The packaging data is quite interesting. At first glance it suggests that packaging placed on the market volumes are lower than the previous year, which you would expect given the pandemic.
“However, dig a little deeper and comparing data sets like-for-like and comparing data published at the same time last year – the figures paint a different picture and point to the possibility that more packaging was placed on the market during 2020 than the previous year.
“We can only assume that the picture will become clearer throughout the coming months as producers update and resubmit their data.”
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