PRNs are issued against a tonne of packaging waste recycled or recovered and are needed as evidence by obligated companies, the majority of which are members of compliance schemes.
One sector which is particularly tight is waste paper.
One major paper reprocessor said: “We are seeing a lot more inquiries this year and there is certainly a worry that PRNs are going to be short. If they are not ultimately short they are certainly going to be in tight supply at the end of the year.”
Another paper mill PRN administrator said: “Demand is far exceeding supply. Some buyers may be expecting us to produce more PRNs at the end of the year but our machine cannot go faster so we cannot increase our capacity.” And, in a reference to a market where prices for collecting material in the first place are low, the mill expert emphasised: “We have to receive the waste in the first before we can issue PRNs against it.”
Export market
With capacity in the UK not increasing in line with demand for PRNs, one way that extra PRNs may be obtained is from the export market – these are known as PERNs. A leading UK waste paper exporter said that his company was sending us much material abroad as possible. “When you consider that in the UK we can achieve a price of about 32, if we send it abroad and receive 15-20 we can still be better off if we receive the export PERN.”
The government is thought to be keen to remind the packaging waste marketplace that PERNs are also available and so that if there is a tight supply at home, the export evidence should be available from major exporters.
Overall obligation
The precise overall tonnage obligation for 2001 is still to be confirmed by the Environment Agency, even though it had data in from compliance schemes and companies several months ago. There is a chance that the actual obligation could be less than forecast by the government but some industry sources believe that it will be at the 4.5 million tonnes level which is only slightly down on government forecasts of 4.75 million. This means that the demand for PRNs is likely to remain firm – a much lower obligation than expected would have reduced demand.
The two largest compliance schemes, Valpak (2,978 members) and Wastepack (466), are both forecasting a tight market and have forecasted a shortage at the end of the year although both are confident that they will meet their obligations. Third placed Biffpack (362) is also suggesting there may well be a shortfall at the end of the year but is also confident of meeting its obligations.
Prices
Prices for PRNs and PERNs are starting to rise but only by a few pounds apart from plastics where most quotes are now closer to 50 a tonne rather than 45 last night.
The letsrecycle.com guide prices for PRNs can be seen at PRN prices.
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