News

The export of scrap plastics for recycling has caused the value of packaging recovery notes (PRNs) to “collapse” and has reduced UK recycling capacity, according to British Polythene Industries chairman Cameron McLatchie.

Publishing the group’s 2006 results, he blamed the situation on the fact that the export of scrap for recycling qualifies for PRNs.

This has had a knock-on effect on the UK market, with BPI’s number of accredited recycling sites falling from seven at the start of the PRN system to only three.

McLatchie said this had contributed to BPI’s pre-tax profits falling by more than a quarter to £14m in 2006. Sales rose £4m to £414m.

Plastics PRNs are trading for only £5-£7 per tonne, compared with £50 per tonne when PRNs were first traded in 2001. And only four plastics PRNs were traded in the spot market during February, according to trading organisation The Environment Exchange.

Problems with the introduction of new electronic PRNs also meant February was a slow month.

Angus Macpherson, managing director of The Environment Exchange, said that while some companies did not understand how to register, others felt there was no economic incentive to register to trade plastic PRNs because of their low value.

Some who did register did not receive all the passwords necessary to trade, although he said this had a “relatively minor” impact on trading. More important was the amount of people who had been deterred from transacting by the administrative set-up of an electronic account.

One plastics recycling firm said high levels of trading in January had a knock-on effect in February. A surplus of PRNs had been carried over from last year into January, when they had to be used.

PRN TRADING FIGURES (FEB)
Material: Paper
Spot trades: 11,395

Material: Plastic
Spot trades: 4