Wastepack offers three-year packaging compliance contracts

The “Wastepack 3” scheme aims to counter some of the volatility in the market for packaging waste recovery notes (PRNs) – the evidence used to show producer responsibility has been carried out for packaging.

” What we are trying to do is achieve sufficient support for both sides of the PRN market so we can invest in some serious long-term markets for packaging waste.“
– Cliff Laundon, Wastepack
For reprocessors, Wastepack is offering three-year fixed-price contracts for the supply of PRNs to give reprocessors more certainty for their PRN investment and an increase in their raw material supply.

The scheme hopes to develop the three-year relationships with domestic recyclers in order to counter what it sees as the UK's growing dependence on exporting packaging waste in order to meet European Packaging Directive recovery targets.

On the members' side, the scheme believes the long-term approach would offer a better guarantee for obligated packaging producers that they will meet their legal recycling requirements from 2006 to 2008. It would also allow them better scope to plan and budget for the future by taking advantage of fixed-price contracts for PRNs.

Cliff Laundon, buying manager for Wastepack, told letsrecycle.com: “What we are trying to do is achieve sufficient support for both sides of the PRN market so we can invest in some serious long-term markets for packaging waste. At the same time, we are trying to break the dependence on export markets.”

Exports
While exports of UK packaging waste have soared in recent years (see letsrecycle.com story), Mr Laundon said Wastepack had some doubt over how – or indeed whether – exporters have used export-PRN (PERN) revenue to expand UK recycling capacity.

Mr Laundon explained: “We need reprocessors to buy into the notion of supplying PRNs at a fixed price over three years. What we will then do is ensure that reprocessors and exporters of repute will ensure that they are investing the money properly.”

Under the scheme, a proportion of PRN money would go into a central fund to be invested to help smaller reprocessors invest in expanding capacity.

Transparency
Wastepack is also pledging to make costs and results fully transparent under its scheme, including the negotiation of the fixed prices for PRNs. Mr Laundon said: “We will conduct an open and transparent negotiation on both sides to get a price that is sustainable.”

Wastepack is already “geared and ready to go” with the scheme, with Mr Laundon claiming that three “significant” reprocessors and a number of members already expressing interest.

Within proposals currently out to consultation on the packaging producer responsibility regulations (see letsrecycle.com story), Defra is encouraging – although not requiring – packaging producers to engage in long-term relationships with compliance schemes to help with long-term investment in reprocessing.

However, Wastepack warned that the consultation's proposed requirement for compliance schemes to be given ministerial approval every year effectively worked against the need for long-term memberships.