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Angus McPherson: why the PRN system needs a tweak

October 13, 2010 Comments Off

Angus McPherson says the PRN market would inspire more confidence in both buyers and sellers with a few well-chosen modifications

With the packaging recycling industry eagerly awaiting packaging recovery targets, it was hoped that at the recent Fresh Horizons packaging waste conference, Defra would be able to shed some light on next year and beyond.

Despite the anticipation, DEFRA was unable to confirm next year’s packaging recycling targets, but industry didn’t go away empty handed; it was at least confirmed that there will be targets announced shortly and in addition we can expect each section of the consultation (price transparency and technical issues) to be addressed, although nothing was mentioned about a potential split in glass PRNs.

There is also a notion to split the plastic PRN in a way that would incentivise recycling in different types of plastics by creating distinct PRN revenues for each stream. This value would reflect the degree of difficulty involved in their recycling. If introduced, this would take effect from 2013.

The industry is also awaiting news on potential changes to improving transparency in the PRN system, which would improve the flow of information on PRN revenues to local authorities and producers. At the recent RWM exhibition, I emphasised the importance of improving the policing of the PRN system to avoid evidence being generated where waste is not actually recycled and to ensure that obligated companies were not wriggling out of their obligation when the cost of compliance became too high.

The problems of soft auditing of obligations and PRN supply was particularly evident in this year’s market in which demand is swamped by supply. While raising packaging recycling targets is an important tool, it cannot alone remedy the imbalance and targets are beginning to stretch the bounds of credibility.

Minor modifications to improve the consistency of auditing standards for both businesses with a legal obligation and those issuing PRNs, as well as revisiting protocols, would lead to a better balanced market which would improve the confidence of both the recycling industry and those paying for it.

Angus Macpherson is managing director of PRN trading platform The Environment Exchange. Contact him at angus.macpherson@t2e.co.uk.

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