Major compliance scheme Valpak has said that it achieved full compliance in “one of the most challenging compliance periods”.
Its chief executive Steve Gough said that 2012 saw the UK PRN system severely tested again.
He added: “A combination of factors came together to cause some major issues in the marketplace – two years of flat targets, glass reprocessor fraud, tough economic conditions, downturn in exports for some materials and generally difficult trading conditions for us and our members.
“With this in mind, we are delighted to announce that Valpak has fully complied for 2012. We would like to thank our members, reprocessors and our staff for the efforts and understanding during what has been one of the most challenging compliance periods on our 15 year history.”
Valpak noted that the main issue in 2012 was glass, which showed much lower levels of reprocessing during the first three quarters of the year than previously. Once problems such as this are uncovered, it said that it is the job of the PRN system and compliance schemes to tackle the pinch points and correct the market failure.
In order to meet a potential shortfall of 565,000 tonnes to achieve full compliance in the last quarter of 2012, Valpak and other compliance schemes had to increase the financial contribution they inject through PRNs, meaning that many producer responsibility members have had unexpected and sharp rises in the compliance costs. However, Valpak also said that over time the system still delivers compliance at low cost, and reacts to market fluctuations like any commodity market.
Valpak also said that making compliance schemes submit operational plans to the Environment Agency also saw its worth in 2012.
Steve Gough added: “This year has shown the importance of adhering to some key elements of operational plans, for example steady acquisition of evidence through the year and contingency planning. It may be that proposals to remove or relax the requirement for these plans should be reconsidered.
“It is the combination of strong management of the operation plan, together with the efforts and understanding of our reprocessors and members who all take their responsibilities very seriously, that has delivered sufficient glass evidence to ensure Valpak’s compliance for 2012. We always aim to create realistic plans, and then follow them wherever possible. As an example of that process, we were able to release some slight surpluses of glass evidence that our reprocessors have been able to produce back into the market to assist other producers and schemes.
“We believe that UK reprocessing in glass in the fourth quarter is will over 500,000 tonnes and demonstrates that the capacity exists to handles the required future tonnages on a quarter by quarter basis, despite the trend towards mixed colour/commingled collections.
“In fact, we are aware that at least 14,000 tonnes of evidence produced in 2012 was not required by obligated producers and was carried over into 2013. The remaining question is whether sufficient material is being collected overall now that the fraudulent activity of one or two parties has been removed and the system has had time to readjust.”