Lorax Compliance Ltd

Michael Gove announces there will be changes to the PRN system

Michael Gove announces there will be changes to the PRN system
by Ellen Thornton at 11:06 in Emerging, Packaging

On 26 April the Plastics Pact was announced with 40 businesses having signed up, it includes voluntary aims to drive up recycling of plastics and greater use of recycled plastic material. Furthermore, as Michael Gove unveiled the pact, he also confirmed there will be changes to the Packaging Recovery Notes (PRN) system. This is expected as part of the Resources and Waste Strategy measures. The Secretary of State promised to "reform that scheme to levy those costs on those producing the packaging and reward those who recycle."

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In the UK, the Packaging Recovery Note (PRN) system forms part of the producer responsibility obligations. Producers create packaging and sell it to the consumer. Packaging waste is collected, recovered and recycled by an accredited reprocessor, at this stage a PRN is generated and is awarded for the amount of recyclable material sorted in the UK or the whole amount of unsorted material if it is exported. Packaging compliance schemes can then buy the PRN to meet the producer's obligations. Packaging data and PRNs are submitted to the appropriate environment agency to demonstrate compliance with the Packaging Waste Regulations. PRNs are sold on an open market which means that prices fluctuate according to supply and demand. If there is a perceived shortage of PRNs, then prices will increase but if there is a perceived excess of PRNs then prices will decrease.

The PRN system spreads the cost of packaging waste over the supply chain. Manufacturers, who produce the raw materials that will be made into packaging, cover 6% of the cost; Converters, who convert the raw materials into packaging cover 9%; Pack Fillers, who apply the packaging to goods and products cover 37% and Retailers, who supply the packaging to the end user cover 48%. The advantages of this approach has been that all levels of the supply chain are aware of the environmental impact of their packaging and therefore there is an incentive to reduce packaging waste at each level of the chain.

However, there has been criticism of the PRN system recently as it can incentivise export of material for recycling. When material is reprocessed in the UK, it is sorted, and a PRN is awarded based on the amount of recyclable waste that is separated. In contrast, when material is exported for recycling, PRNs are awarded for the whole volume of unsorted material meaning more PRNs can be awarded by exporting your materials than reprocessing it in the UK. This also means that material which has been exported for recycling is very difficult to track. It is often unknown what actually happens to that material when it leaves the country and there is a risk that it may not be recycled at all. Unsorted waste is often unwanted as it requires a lot of labour to separate into recyclable materials. In addition, such waste can be left on sites for so long in other countries that it actually starts to degrade and has no recycling value.

The EU Directive 94/62/EC on Packaging and Packaging Waste of 1994, as amended, lays down measures to prevent production of packaging waste, reuse of packaging, recycling and other forms of recovering packaging waste and therfore ​reducing the final disposal of such waste. The majority of Member States have implemented this through extended producer responsibility (EPR) principles. This is where the producer is responsible for the costs of collection and environmentally sound disposal or recycling of packaging waste. Usually, producers are obligated to pay fees for the weight or number of units of packaging they place on the market, which incentivises them to reduce or use less costly packaging materials.

We will be closely following the progress of any changes to the PRN system and keeping you updated on LinkedIn ​and t​witter​. We look forward to seeing positive progress towards a more circular economy through the reduction and reuse of packaging waste. If you have any questions about the UK PRN system as well as the upcoming changes and how they could affect your reporting, please contact us here.

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