The five-year deal, which sees Valpak gaining exclusive access to SITA UK's packaging waste recovery notes (PRNs), comes a week after environment minister Michael Meacher announced that packaging recovery rates will be unchanged next year (see letsrecycle.com story).
Mr Meacher's announcement caused some concern that a resulting drop in PRN prices could decrease the amount of PRN investment going into UK reprocessing infrastructure. The affects of an expected oversupply of PRNs in the system has made some question allowing market forces to determine PRN price.
However, Valpak's new agreement with SITA, in which millions of pounds will go to UK recycling projects, is a massive endorsement of the current system according to the compliance scheme's chief executive, Jonson Cox.
“Our agreement with SITA is a powerful argument for our current market-based compliance system,” he said. “It shows how PRN funding can significantly boost recycling projects nationwide.”
Development
SITA, one of the largest waste management companies operating in the UK, will sell all of the PRNs generated at its reprocessing facilities and energy-from-waste plants to Valpak over the next five years. As part of the agreement, SITA will ensure that all PRN revenue from its reprocessing and recovery activities will be used to develop UK recycling capacity.
Commenting on the deal, SITA's UK managing director Ian Goodfellow said: “SITA currently recycles approximately 1.5 million tonnes each year of its customers' waste. We continue to develop the necessary markets and infrastructure to support this business, and the long-term stability that the Valpak agreement brings forms an important part of SITA's development plan.”
Judging by current expectations for PRN prices, the deal will mean several million pounds from the deal going towards boosting the UK's recycling capacity until 2007.
Projects
Valpak has said that a number of major projects will be announced over the coming months, including the construction of a 3 million materials reclamation facility in Surrey and a 1 million refurbishment of a MRF in Dorset.
However, the first project to come online thanks to the SITA-Valpak deal will be a 1 million scheme to source packaging waste material from the 2,000 premises of the former Post Office group, now called Consignia. The project is expected to provide upwards of 15,000 tonnes of mixed packaging waste by 2005.
SITA head Ian Goodfellow also revealed the two companies are working with BAA, the British Airports Authority, to boost the recycling of packaging at seven UK airports including Heathrow, Gatwick and Stansted.
“In 2002, 6,000 tonnes was recycled,” Mr Goodfellow said, “and SITA anticipates this figure to increase to 10,000 tonnes by 2005.”
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