The UK's largest compliance scheme bought the stake in July 2003 after gaining the approval of the Office of Fair Trading, but has now withdrawn, selling its shares in the company back to managing director Angus Macpherson.
The Environment Exchange provides an online market for the buying and selling of packaging waste recovery notes (PRNs), the evidence used for packaging waste producer responsibility obligations in the UK.
– Steve Gough, Valpak
Speaking to letsrecycle.com, Valpak chief executive Steve Gough said the reason behind the compliance scheme's withdrawal from the Exchange was that it wanted to focus more on the interests of its members.
This includes expanding Valpak's own in-house recycling division, Valient Recycling Ltd, working towards providing waste electronics services for its members and launching a packaging waste data service.
“All of these things going on, we wanted to focus on the more member-related aspects rather than the trading business of the Environment Exchange,” Mr Gough explained.
Valpak said following the sale of its stake, it has an agreement in place to continue some trading using the Exchange.
Mr Gough said: “I believe there continues to be a place for a visible trading floor in the PRN market and Valpak will retain the Environment Exchange as an option for procurement going forwards.”
Ownership
Commenting on the withdrawal of Valpak, Mr Macpherson said Valpak had been a supportive shareholder, but the Environment Exchange would now review the issue of its ownership before taking the next step.
He said it was “quite clear” that Valpak hadn't fully appreciated the nature of the Environment Exchange's place in the market, and that there was some need to clarify the issue with others in the market. “People appreciate the role of compliance schemes,” he said, “but they may not know where we fit into the market.”
– Angus Macpherson, Environment Exchange But he said there was still interest in the Exchange and added: “It's not unrealistic to consider that there is a need to have a broader ownership while remaining wholly independent.”
Independence
In organising any future sale of shares in the Exchange, Mr Macpherson said more importance would be given to the issue of its continued independence.
“With the Valpak sale, I think we undervalued the importance of our independence,” he explained. “There was a perceived loss of independence among some traders in the market.”
Trading on the Environment Exchange has continued to increase since its inception, and so far trading is up 23% on this time last year, the managing director said. The Environment Agency has recently imposed a stronger duty of care on the Exchange to reduce the risk of fraudulent PRN issuing.
“The message we have received from the Agencies is that they will not be taking responsibility for fraudulently issued PRNs, it is up to the market,” Mr Macpherson said.
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