An increased recycling target for wood packaging could see a spike in packaging waste recovery note (PRN) prices for the material in future years, compliance experts have said in response to targets in yesterday’s Budget (8 March).
Responses (clockwise from top left): Jacob Hayler, ESA; Jeremy Jacobs, ORG; Adrian Hawkes, Valpak, and; Phil Conran, ACP.
However, the waste industry has welcomed moves to crack down on illegal waste sites through a proposal to extend the scope of landfill tax to include non-permitted sites. A consultation later this month was announced by the Treasury.
Packaging recycling targets for wood, aluminium, paper and steel were outlined up to 2020 in the Budget 2017 documents, with the government having opted for higher targets for all four material streams.
Packaging
This includes raising targets for paper to 75.0%, aluminium to 64.0%, steel to 85.0% and for wood packaging to 48.0%.
“The only potential cause for concern is the wood recycling target which could present a challenge in the light of the continuing pressure to divert packaging wood away from recycling towards energy recovery, so we will be monitoring progress closely.”
Adrian Hawkes
Valpak
However, concerns have been raised over the level of ambition set for wood, which will need to increase substantially in the coming years to meet the 48% goal.
Currently the wood target stands at 22% for 2017, a target which has been comfortably met in recent years. This means that PRNs – the currency traded between recyclers and compliance schemes to ensure that packaging producers meet their recycling targets – have traditionally remained at a low value of around £1 – £3.
However, recyclers claim that a more challenging target would drive demand for PRNs, incentivising the recycling of the material by pushing PRN prices up and making it more attractive to process the material and issue PRNs.
‘Concern’
Commenting on the target levels confirmed in the budget, Phil Conran, chair of the Advisory Committee on Packaging, said: “Really the only concern would be wood. If we assume that there is going to be a similar obligation next as there was this yea,r it would push the target up by 35,000 tonnes. That would be a concern given that wood packaging recycling has been in overall decline. What that is going to do is to create a significant cost increase in wood.
“It is a shame that they [Defra] have gone for that target which could lead to a significant increase in PRN prices but not necessarily at the best environmental outcome.
“Other than that the aluminium target is going up by about 5,400 tonnes, which is quite manageable but will mean that the target will only be met if the PRN price goes up sufficiently for people to get accredited.”
Targets for the recycling of wood packaging are set to increase to 48% by the end of the decade
Adrian Hawkes, policy director at the compliance scheme Valpak said that the announcement of targets to 2020 would ‘aid stability’ in the packaging sector, and said that overall they appear to have achieved a ‘good balance between achievability and environmental benefit’.
He said: “They are likely to lead to continuing investment in the system but without excessive costs to producers.
“The only potential cause for concern is the wood recycling target which could present a challenge in the light of the continuing pressure to divert packaging wood away from recycling towards energy recovery, so we will be monitoring progress closely.”
Robbie Staniforth, commercial manager at Ecosurety, added: “It’s the first indication that we have received from government that the environment is on the agenda, and we’re pleased to see they’ve opted for a change.
“We’re slightly surprised that they’ve opted for a mix of targets and our only concern is that big recycling jumps may create artificial spikes in PRN prices. As the years progress, it will be important to ensure these PRN revenues generated are directed to improving recycling in the UK.”
Alupro – the Aluminium Packaging Recycling Organisation – has expressed its disappointment at proposed packaging target levels for almunium after having called for ‘stretching but realistic’ targets for the material.
Alupro said that which higher targets would drive investment in aluminium recycling through the producer responsibility system – but said the proposals outlined by Defra do not ‘reflect the ambition of the aluminium sector to maximise recycling’ of the material.
Speaking today, Rick Hindley, Alupro’s executive director, said: “We are concerned that reprocessors will choose not to be part of the system. The material will be captured but it might not be reported through the PRN system.”
Landfill
Away from packaging targets, the Treasury also used the Budget to confirm landfill tax rates for 2018 – a standard rate of £88.95 per tonne as well as a lower rate of £2.80 per tonne – and announced that it would consult on “extending the scope of Landfill Tax to illegal disposals of waste made without the required permit or licence”.
Landfill tax rates from April 2018 have been announced
Waste sector trade body the Environmental Services Association (ESA), has welcomed the proposals, with the organisation’s executive director Jacob Hayler stating that the measure would help to tackle waste crime. He said: “This will help punish the criminals who undermine legitimate operators in our industry and restrict the option of illegal dumping as a means of avoiding landfill tax.”
Pennon, the parent company of waste and resources firm Viridor said it saw the 2017 Budget as a “Budget for growth, regions and skills” and called for a focus in the Autumn Budget on the South West of England.
Chris Loughlin, Pennon’s chief executive, said: “Welcome too is the focus on investment and on skills, where the introduction of T-Levels for technical qualifications will help turn the tap on our talent pipeline in core water and waste businesses. Finally, we look forward to a consultation on extending the scope of landfill tax on illegal disposals – another important step in cracking down on waste criminals.”
Climate change
A less positive stance on the Budget came from Jeremy Jacobs, technical director of the Renewable Energy Association and the Organics Recycling Group. Mr Jacobs said: “There are few nuggets to grasp from the Chancellor to excite and it is particularly disappointing that there was no mention of the environment or climate change in his statement. With some assistance to smaller businesses on rates relief, which is not likely to impact ORG members, I could see little to provide support to the waste and resources sector.”
FCC Environment’s chief executive Paul Taylor described the Budget as a “missed opportunity” to set out plans to maximise resource productivity in the UK.
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Source: letsrecycle.com Packaging
