The packaging waste regulations provide for PRNs to be issued in the UK and allow exporters of used cardboard (and other packaging materials) for recycling to obtain PERNs (export PRNs) from their overseas customers, such as paper mills in China.
Martin Oldman, director general of the Paper Federation, has written to Environment Minister Michael Meacher, warning him of a rapidly deteriorating situation which threatens UK mills who have very low stocks of cardboard.
Suspend the PERN
The Federation is asking the minister to suspend the PERN system because it considers that with merchants able to obtain a PERN – worth about 30 a tonne for the material – the UK mills are having to pay more for their raw material.
He told the minister that “all the major mill groups are now importing large quantities of waste paper at a cost of 110 per tonne delivered, compared with the new domestic price of 80 per tonne delivered. The true cost is, of course, around 140 per tonne as no PRN can be issued on this material.”
Mr Oldman also told the minister in his letter that the UK board mills are having to import material because their stocks are low.
His plea to Mr Meacher has been attacked by UK merchants who consider it completely nonsensical.
One senior merchant told letsrecycle.com that the industry “needed to live in the world of a free market for trade and should have paid higher prices for material earlier in 2002.” Another questioned whether the UK paper industry had recognised the fact that it too benefitted from the PRN system and had taken in “hundreds of thousands of pounds” from it in the past.
The Independent Waste Paper Processors Association has also written to Mr Meacher. It has told Mr Meacher that without exports the UK “would not be able to achieve national compliance under the Packaging Waste Directive. Recognition of this led to the introduction of PERNs and more equality in the recovered paper market.”
Tariff in 2005
The Association also explains that the recent price increases in the UK and all other countries were driven by increases in world demand and had little to do with a threat by the Chinese to introduce an import tariff in 2005 on certain grades of recovered paper from the USA.
On the pricing front, the Association reasons that “taking into account the PRN revenue, UK mills were still enjoying favourable domestic prices compared to most of their European neighbours; this is reflected by the cost of imported tonnage at the reported figure of 110 per tonne delivered.”
And the IWPPA says that without an export PRN system UK mills could be breaching competition rules.
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