And, while all materials have suffered a decline in value to some degree as a result, plastic has emerged as one of the worst hit materials, with the value of PRNs plummeting from a high of £35 per tonnes in January 2009 to now being worth around £4 per tonnes in May 2010 – the lowest price since December 2006.
Reprocessors, who wished to remain anonymous, told letsrecycle.com that the impact of the economic downturn had seen plastic PRNs fall to be worth “nearly nothing” and, due to a low level of obligations and increased Chinese business, there is an “imbalance of supply and demand” which rendered PRNs “insignificant”.
Discussing the impact this will have on the price of plastic PRNs, a sales and marketing manager at one plastics recycling firm said: “The general view is that there is going to be an oversupply, so basically, the price will come down.
“PRN prices are weak and will remain weak but quite why I can't see any evidence that they have just dropped off the dish. When they are below £3, people will say ‘sod it, we just won't sell them' and then sell them back to the Agency at the end of the year,” he added.
Accreditation
The low prices have led some reprocessors to question the value of becoming an accredited PRN issuer with the Environment Agency.
One plastics exporter said: “I don't know how we can justify accreditation at the moment, we used to be able to expect £10 per tonnes but now is it really worth it? We pay £2,600 for accreditation and, over the year, you look to recover that. Now, whatever we recover is minimal.”
Others in the plastics industry have gone further and questioned the overall set-up of the PRN system – which is intended to help stimulate reinvestment in the recycling sector.
A purchasing manager at a plastics recycling firm said: “We have got an imperfect system which is going to be clung to by Defra as it is the ‘Holy Grail' for gathering figures. I don't see any value in it once it goes below £5 per tonnes, and it is a myth that PRNs do anything to stimulate recycling as it is then just a drop in the ocean.”
The comments were supported by another plastics reprocessors, who said the current state of the PRN system was restricting development of the domestic market and “handing jobs to China”.
He said: “The PRN system is a lower contribution to recycling than any other system in the developed world. It is a national embarrassment. How can we get investors on board with this?”
And, while there was tacit support for government proposals to introduce different targets for materials depending on its end use as outlined in its consultation on changing the business packaging recycling targets for 2011-2020 (see letsrecycle.com story), representatives of the plastics sector remained sceptical of the feasibility of such a system.
One industry expert said: “I think that the fact is even if Defra manage differentiating PRNs for some types, such as glass or plastics, in that way it would get some different PRN values but it is going to be highly complex and people will cheat and they will claim back whatever and the EA will be totally incapable of policing it.”
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