Initially set up in 1998 to provide a matching service for those wanting to buy or sell PRNs, the Environment Exchange has grown into a fully functional online PRN market under the watchful eye of managing director Angus Macpherson. After its first full compliance year of operation, the Exchange had handled 51,452 tonnes worth of PRNs. Since then, trading has grown year on year by 237%.
 The Environment Exchange MD, Angus Macpherson |
“In the 2002 obligation year we've seen 281,295 PRNs traded,” Mr Macpherson said, “that's 53% above last year's total, and there's still two and a half months to go. Environment Agency figures show that the compliance obligation for 2002 is 4.7 million tonnes, but as at the end of September only 3 million had been issued.
He explained: “This suggests that there still could be 1.7 million tonnes that need to be traded in this compliance year. If so, the quantity that needs to be traded in the last quarter exceeds 50% of what has been traded in the first 3 quarters – so there's still a great deal of trading left to be carried out this compliance year.”
Consistent
A particularly promising development for the exchange is that trading this year has been a lot more consistent than last year. Many reprocessors decided to hold out on selling their PRNs until the end of the year in 2001, hoping to take advantage of steadily growing prices. The sudden flood of PRNs on the market at the end of the year did them no favours.
As much as 10% of the annual tonnage was traded in the last week of the compliance year in 2001. This year, there has been a consistent level of between 60,000 and 100,000 tonnes worth of PRNs on the market at any one time.
“Undoubtedly people have learnt lessons from last year and have taken a more sophisticated view on trading,” Mr Macpherson said. “There's a much more continuous basis throughout the year now. People don't want to buy everything at once, they want to spread it out and not show their full tonnage at once.”
Prices
As with PRN prices outside the Exchange, values have come down in the last few weeks through some fears of oversupply. Environment minister Michael Meacher's decision to keep the 2003 packaging recovery targets the same as the 2002 targets has led to weakening prices. Environment Agency figures of UK reprocessing have added to the drop in prices by revealing that the UK is on course to comfortably meet its obligation this year.
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