Industry experts have welcomed Defra’s announcement of packaging targets for 2021 and 2022 and forecast that the total recycling obligation will boost demand for a wider range of PRNs.
Yesterday’s release of the packaging waste recycling targets for businesses for 2021 and 2022 confirmed target increases for all materials except for wood. Paper and glass re-melt saw the highest increases, at 4% and 5% respectively (see letsrecycle.com story).
There will also be no recovery targets from next year, which means that recovery evidence will not be needed from energy from waste plants.
Many packaging experts have said this will lead to the makeup of the general recycling pot changing “significantly”.
Paper
Simon Ellin, chief executive of the Recycling Association said that the “significant” rise in targets for paper PRNS was “very welcome news”. And, he emphasised the importance of domestic and export PRNs in helping to keep collections in place.
Simon Ellin, chief executive of the Recycling Association, praised the move to raise targets for paper
He explained: “In the past couple of years, the UK industry has suffered from a sustained period of low prices and we have been very reliant on the robust PRN/PERN price to add margin into the business and allow us to continue collections. Indeed, it has been a demonstration of how the system works for the benefit of the whole supply chain and we should recognise this when looking at reforms to the system under EPR.”
Mr Ellin added: “By increasing the targets, not only should it ensure that we improve our recycling performance year on year, but it should also ensure that that we have the margins in the business to enable us to survive in a post-Covid/Brexit environment when the greatest challenges lie ahead.”
Total recycling
As well as material specific target which obligated producers of waste packaging must hit, a ‘total recycling’ target is also set.
Once a material reaches its annual target, excess PRNs can be used towards the ‘total recycling’ target. In many years this has largely been a mix of paper and wood as these are often among the cheapest and hit their targets earlier, but high prices in 2018 for wood in particular did alter this and more glass PRNs have been used recently.
Some now argue that with higher targets for all materials, especially paper, the makeup of the ‘general recycling pot’ is likely to feature more PRNs from other material streams.
Diversification
Glass re-melt will rise by 5% to 72% in 2021
Martin Hyde, policy leader at the Comply Direct compliance scheme, specifically highlighted the potential impact of the higher targets for paper and glass remelt.
He said: “It is good to have sight of the packaging recycling targets for 2021 and 2022, albeit later in the year than expected. Overall changes are in line with those proposed in the 2019 consultation on reforming the producer responsibility system, however it is interesting to see some variations from expected targets. High uplifts in paper and glass remelt, alongside a reduction in wood will mean 2021 could see continued diversification in the general recycling market.”
Defra first consulted on the targets in February 2019, and the final numbers have been revised downwards for some materials.
Glass, plastics, steel, all saw their proposed proposed target increases cut, while paper, wood and aluminium remained the same.
‘Significant’
Andrew Letham, operations manager at the PRN trading platform t2e echoed this, explained that the “significant
“Significant changes to the wood and paper targets mean that the general recycling pot could have a different make up next year”
changes” to the wood and paper targets mean that the general recycling pot could have a different make up next year.
Mr Letham said: “Significant changes to the wood and paper targets mean that the general recycling pot could have a different make up next year however if packaging handled remains at a similar level, so will the overall recycling obligation.”
He added: “The change to the split in glass is certainly one that will be welcomed by recyclers and could mean a shift of around 75,000t of obligation from Aggregate to Remelt which has already resulted in a 30% price difference between the two grades trading into next year”.
Covid
Martin Trigg-Knight, head of packaging at Clarity Environmental
Martin Trigg-Knight, head of packaging at Clarity Environmental, said of the targets are “ambitious” but warned that the market could be influenced by other external forces.
He said: “The increases in paper and plastic targets are positive, but external forces outside of the industry, such as the worldwide response to Covid-19, will be key to how easily the UK can achieve these in the years ahead.
“It is vital that appropriate enforcement and inspections of UK and export premises are achieved alongside these higher targets to ensure that increased packaging waste recycling is achieved in the UK in the most responsible and sustainable way.”
Recovery
The decision by Defra to remove recovery targets was highlighted by Paul Van Danzig, sales and marketing director at the WastePack Group, who said it was the most controversial move but he feels the impact will be limited.
Mr Van Danzig remarked: “The total number of recovery PRNs issued was low (circa 600,000 PRNs per annum) and their value was relatively low compared with the cost of specific material PRNs. As with most changes in Government policy, there will be winners and losers, I can imagine that obligated producers will welcome the move as they won’t need to buy any recovery PRNs next year, however the reproccessors who sell them may now have holes in their budgets”.
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Source: letsrecycle.com Packaging
