The total number of accredited packaging recovery note (PRN) reprocessors and exporters for 2011 has fallen by 20% against 2010’s register, according to data on the National Packaging Waste Database.
Comparing the registers from 2010 to 2011 the number of accredited sites has fallen across the board on all materials with recovery and wood seeing the biggest drops in accredited sites of 32% and 26% respectively. It is felt that the affect on wood is a result of more material going into energy from waste and biomass than recycling.
Steel and plastic have the next largest drops in accredited reprocessors, of 25% and 23% respectively.
According to some, the reason for the lack of sites registering with the system is due to the high administrative fees companies have to pay to become accredited, while they receive low benefits in terms of revenue from the system. PRNs across many materials are currently trading at around the £1 mark.
This is further compounded by Defra’s decision to keep packaging recycling targets flat for 2011-2012, further limiting demand and PRN values. It was announced last year that only steel and plastic will have increased recycling targets for 2011 and 2012.
Scrap-Ex materials manager Gareth Goodall said: “All the focus last year was on the demand side of the PRN market in terms of what the targets would be and what may or may not happen with the economy but nothing was really said about supply. Now, it looks like a case of some reprocessors taking a view on the simple economics and not registering so the supply potentially reduces. I suppose it doesn’t really work for some people with PRNs at £1 or less. It’s a market so this is the supply side response to low PRN levels.Scrap-ex has already started to see stronger buying interest than in 2010 on all PRN classes both in 2011 spot and forward markets”.
Compliance consultancy 360 environmental director Phil Conran said: “A lot of people would argue that the PRN system has had its day. There has got to be a better way of demonstrating that targets have been met. The Government is keen to move towards a more carbon-based target but, if it does go, the PRN system is unlikely to disappear for another three to four years yet.”
The risk for those who have decided not to register this year is that if PRNs do gain in value, they will be at a competitive disadvantage to those benefitting from the PRN revenue.