The head of the UK's largest packaging waste compliance scheme was speaking to letsrecycle.com, responding to some of the recent criticism surrounding the packaging waste recovery note (PRN) system.
” The positives of the PRN system have been overlooked recently – it's being treated by many people as though there is something better out there.“
– Steve Gough, Valpak
Mr Gough dismissed recent suggestions that the buying of PRNs will not provide a sufficient long-term framework for packaging producers to reach EU recovery targets set for 2008 (see letsrecycle.com story).
He said careful investment of PRN revenue, careful target-setting in years leading up to 2008 and a stamping out of fraud will put the targets within reach.
“The positives of the PRN system have been overlooked recently – it's being treated by many people as though there is something better out there. We've all got it, now the issue should be 'how are we going to get it better?'” Mr Gough said.
Over-buying
He dismissed concerns raised earlier this year that some obligated organisations were over-buying in the PRN market to make life difficult for others (see letsrecycle.com story). The fact that 220,000 tonnes worth of PRNs were bought and used in 2005 rather than 2004 was not over-buying, but simply the “carry-over”, the usual mechanism for reprocessors to issue December PRNs of one year as January PRNs for the next year's compliance.
“This was business as usual,” Mr Gough said. “In fact if anything, there was a lot more coming in than going out, as there was about 320,000 tonnes carried over into 2004.”
Investment
Following difficulties suffered by obligated organisations last year in securing all the PRNs needed to comply with the UK's Packaging Regulations, Valpak's chief executive said more and more compliance schemes were taking out longer-term contracts with reprocessors for PRNs.
This, he said, would help to avoid non-compliance, but the “challenge is to make sure the money gets channelled into growth” in reprocessing capacity. He said this growth could only be achieved with good business planning and by working closely with reprocessors.
He warned of potential problems ahead in the amount of new reprocessing capacity that would be in place prior to the EU target year of 2008. He said: “There has been some scepticism among the reprocessors, over whether the high PRNs prices will be sustained. It has seen them holding back from investing.”
PackFlow
Valpak has been carrying out a major research project – called the PackFlow project – that could have significant impact on packaging waste recovery in the run up to the EU targets. This project attempts to reveal the gap between the amount of packaging waste in the waste stream and the amount that will be reprocessed up until 2008 when taking into account all planned increases in collections and reprocessing capacity.
Mr Gough said the project could have important repercussions in the packaging recovery market, identifying exactly where the problems lie ahead, and exactly where more investment is needed in order to reach European recovery requirements of the Packaging Directive.
He hinted that the research could see some quite serious deficiencies in current plans to reach recovery levels needed. The “tight times” seen within the PRN market at the end of 2004 was a “sign of the future”, he said, suggesting that the difficulties for some organisations getting hold of enough PRNs of certain materials each year would be seen again.
Non-compliance
The Valpak chief executive said with tight times ahead, an overhaul of the “reasonable steps” system for organisations that fail to secure all the PRNs they need in one year is badly needed. If they cannot secure enough PRNs, organisations can currently claim to the regulators that they took “reasonable steps” to do so. There is no definition of what constitutes “reasonable steps”, or what the regulators will accept as reasonable steps, however.
Mr Gough said the “one strike and you're out” approach to non-compliance was not entirely helpful to the UK cause, and it might lead to a loss in PRNs from de-registered schemes or companies. Instead, he said a system of financial penalties would be more effective.
“We would be much better off with financial penalties for companies that fail to comply,” he said, explaining: “It would be hugely beneficial to everyone to have a financial penalty – it would clarify the reasonable steps issue, and there is precedence for it working well with the Landfill Allowance Trading Scheme and the Renewable Obligations Certificates.”
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