As the Packaging Recovery Note (PRN) nears its 20th birthday, stakeholders in the UK waste reprocessing chain are asking whether the system is fit for purpose.
Some say PRNs are redundant, claiming that at least parts of the recycling sector need no additional support.
Others believe the injection of cash is necessary, but it should be distributed differently. Meanwhile, one common criticism is that the current system is neither transparent or accountable.
Typically, compliance schemes act as intermediaries, shouldering the administrative burden for producers. But the system makes it impossible for those producers to see how their money is being spent.
Now, UK compliance scheme Ecosurety has come up with its own solution to the question of transparency.
Launching the beta site for its Circularety web-based platform a few weeks ago, Ecosurety md James Piper said: “So much has changed since 1997, when the PRN system was established, and yet the PRN has stayed as it was then. We’re hoping to change the PRN market.
“We wanted to introduce transparency. Also, under the current system, there are high levels of price volatility, which create instability in the market. Finally, we wanted to introduce choice.”
This is not just Ecosurety’s view. Earlier this year, the Chartered Institute of Waste Management (CIWM) voiced its own concerns over the poor transparency and market volatility affecting the PRN system.
The CIWM is among those bemoaning the system’s over-reliance on waste exports. These are perfectly legal, but are widely seen as weakening the UK’s recycling infrastructure.
The Circularety system allows scheme members to channel their PRN payments directly towards specific recycling projects and investments. The producer’s choice of ‘target’ project is likely to reflect its own materials usage.
So, for example, Innocent Drinks has said it would explicitly link its own PRN payments to the recycling of polyethylene terephthalate (PET) in order to reflect and support its use of the virgin plastic and, increasingly, of recycled PET.
Of the Circularety scheme in general, Piper says: “We will audit a percentage of the projects to ensure they are going through as projected.”
Reprocessors will have to make up any shortfall in funding themselves. Currently in its beta stage, the Circularety website will go live to producers wanting to invest at the beginning of January.
For those in the PRN chain, the questions about the current system cut much deeper than this.
At the Local Authority Recycling Advisory Committee (LARAC), chief executive Lee Marshall says: “At any one time, the total amount of PRNs available is around £60M.
‘Spread very thinly’
“That sounds a lot, but once it is divided up among collection schemes in council areas across the country, it is spread very thinly. We need to look at how much funding there is, and whether we need more overall.”
This is especially important given the dwindling levels of central government funding for local authorities, says LARAC.
Other questions centre on whether, post-Brexit, the UK will in future be tied into EU regulation on packaging waste and producer responsibility.
Current proposals from the European Commission include an increased funding burden on producers under so-called extended producer responsibility (EPR) schemes.
As the UK’s producer-led Industry Council on Packaging Research and the Environment (Incpen) pointed out, the PRN system is one of the cheapest compliance systems in Europe for industry.
Matching Eurozone EPR systems in terms of paying the full costs of collection and sorting would mean “an enormous increase in current compliance costs”, it warned.
Meanwhile, Incpen, in common with other interested industry bodies, says it is waiting and watching to see how the Circularety platform performs in 2017.
Packaging recovery notes – at a glance
Under the UK Packaging Waste Regulations, producers which use over 50t of packaging a year around their products (and have a turnover of over £2M) are required to register the amount by material to be used over a year and purchase PRNs corresponding to those volumes.
The PRN is accepted as evidence that the company has fulfilled its obligations to help fund recycling and recovery in the UK.
Some companies choose to register directly with the relevant national authority (the Environment Agency in England and Wales), but most work with compliance schemes. These schemes manage the paperwork and submit the necessary information to the authority on the company’s behalf.
PRNs are material-specific, and issued by accredited reprocessors. There is a PRN market where prices can vary considerably. Last year, PRN prices across all material types fluctuated by an average of 653%, says Ecosurety