Mechanism to prevent volatility across materials should be considered, says ACP

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The Advisory Committee on Packaging (ACP) is calling on Defra that from 2020 onwards, consideration should be given to a mechanism to prevent excessive volatility across materials.   

An ACP meeting took place on 19 June to consider the causes and impacts of the recent increase in PRN prices and possible options that could be recommended to Defra to avoid consequences of an overheated PRN system. 

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It was decided that while plastic PRN prices are unprecedented, this doesn’t reflect the current recycling situation, and that there is no reason for spiralling prices beyond perception.  

Market reports suggest strong levels of recycling for Q2, with much greater inspection by businesses on waste packaging reprocessing opportunities. It is likely that this will lead to a market correction that should ensure more stable, and less “extreme” pricing going forward. 

From this, the Committee said it acknowledges that as recycling targets rise and markets tighten, it increases the potential for “excessive volatility across all materials and that there is a clear need for regulatory change to prevent this going forward”. 

The ACP is recommending to Defra that from 2020, deliberation should be given to a mechanism that restricts excessive pricing, while allowing the markets to work as planned, and will also provide a compliance option, should future years see targets fall.  

While the development of a system for 2019 was considered, it was recognised that the legislative process and timetable made this difficult, with the danger that the implementation of such a system part-way through the year, might undermine existing compliance schemes. 

It was considered in the discussion, that the high price of aluminium was not a result of the pressures that had affected plastic but were down to “possible market manipulation that the ACP had previously raised with the Competition and Markets Authority”. 

Defra has now supported the request and ACP has said it hopes that CMA will investigate the PRN market as a result.  

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