The pilot project was carried out yesterday and involved twelve reprocessors invited to take part in a 'reverse auction' system of trading. The reprocessors made bids to sell their PRNs on a special section of the Valpak website and these bids were then tracked by the compliance scheme's new software before being purchased by the compliance scheme.
Although Valpak could see who was bidding and the prices they were bidding, the reprocessors themselves were only able to see the price.
Commenting on the project, Valpak has stressed that the auction yesterday was only a trial designed to test the technology. After analysing the results of the test, decisions will be made as to whether to expand the system to a fully functional PRN 'reverse auction'.
Steve Gough, Director of Operations at Valpak explained: “If we were to adopt such a system, it would allow Valpak access to a wider community of reprocessors for spot tonnage at best value for its members. This initial pilot has gone well and many possibilities now exist. We will now analyse the results before deciding on our next move.”
Yesterday's auction saw reprocessors bidding in three 'screens' on the Valpak website, divided into categories based on the size of the PRN lots. The categories were for 500 tonnes, 2,500 tonnes and 7,000 tonnes, with reprocessors able to place bids in any or all three of the screens simultaneously.
Despite the real possibility of extending the project, Valpak – the UK's largest compliance scheme – has said that it is “committed to its long term contracts for the bulk of its PRN purchasing”.
Whether Valpak decides to adopt the system – and whether it decides to extend it to a year-round online auction or limit it to an end-of-year trading facility – has not yet been decided, according to a Valpak spokesman.
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