PRN Performance
By Richard Dove, global key account manager, extended producer responsibility (EPR)

PRNs – packaging recovery notes – provide evidence businesses are meeting the producer responsibility requirements of the Packaging and Packaging Waste Regulations. In short, businesses large enough to be covered by the regulations have to account for a certain amount of recycling and ‘recovery’ of packaging waste.

2020 will not be fondly remembered by many, but it has shown the PRN system responding to some of the gamut of challenges the UK has faced as a result of the pandemic.

The progress in meeting recycling and recovery obligations, from 2 million tonnes set in 1997 to 8 million tonnes in 2019, has been achieved using an efficient and flexible mechanism of market-related subsidy based on PRNs, rather than by more inflexible alternatives such as taxation.

This flexibility means the price of PRNs can be highly volatile, creating concern amongst some producers used to working in more sedate commodities markets such as foodstuffs and energy. However, this volatility is a function of the responsive nature of the system: to provide a fair level of subsidy where and when it is needed to meet the broader statutory recycling objectives, without unduly burdening producers.

Early in 2020 there was genuine concern that the deteriorating economic situation and the eventual lockdown would result in insufficient PRNs being available for the year. Discussions took place between government and producers at the highest levels to seek to preserve the integrity of the system and avoid widespread noncompliance by producers.

Beyond domestic considerations, conditions in international markets have also had a significant effect on demand for materials and therefore the availability of PRNs. Export PRNs (PERNs) can only be issued when the material has moved out of the UK.

In January 2021 the compliance cycle starts again with both new challenges and continuing trends.

The prospect for PRNs in 2021 remains uncertain. The virus and its adverse effects on all our lives is yet to pass and structural changes to both international and UK markets for recycled materials will continue.

Recycling targets have now been set for 2021 and 2022. The widely anticipated removal of the recovery (nonrecycling) target has been partially offset by higher than anticipated increases in some of the other material-specific recycling targets.

Following two years of volatility in the PRN market it is a fool’s game to predict 2021 – the best advice remains to keep a close watch on all the relevant information and trends.

Article from The Frozen Food Report 2021 – view full report here