Wood sector opposed to PRN price stability mechanism

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Two wood trade associations have expressed their opposition to a proposed price stability mechanism for PRNs.

Following volatility seen for plastic and aluminium PRN prices in particular, the Advisory Committee on Packaging (ACP) has suggested to Defra that there should be a mechanism to prevent excessive pricing of PRNs.

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But the Wood Panels Industry Federation (WPIF) and the Wood Recyclers Association (WRA) have written a letter to John Dye – the wood industry’s representative on ACP – stating that a mechanism would be unnecessary for wood.

The letter said: “As a general principle we are strongly opposed to market interference through the introduction of a stability mechanism, as in our view, it risks either collapsing the market or, as evidenced by the EU Emission Trading Scheme Market Stability Reserve mechanism, where the opposite has occurred and has dramatically driven up the price of allowances.”

It then outlined that WPIF and WRA believe that a mechanism would introduce a degree of market predictability that can then be exploited by speculators.

WPIF and WRA argue instead that the wood market is functioning correctly, and that a recent and temporary rise in the price of wood PRNs, helped to increase wood recycling rates as the system is designed to do.

WRA executive director Julia Turner said: “If Defra follows these recommendations there is a danger they will try to implement a ‘one size fits all’ scheme across different waste streams and in doing so, damage a system that is working well in the wood sector. We hope both the ACP and DEFRA will take our concerns on board.”

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