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ACP publishes PRN guide

ACP publishes PRN guide
A guide explaining the operation of the UK packaging recovery note (PRN) system has been published by the Advisory Committee on Packaging (ACP).

The guide is designed to provide comprehensive information for all interested parties on how the system for packaging waste recycling operates and what it is designed to achieve.

The PRN system is the mechanism used by packaging producers in the UK to meet the requirements of the European Packaging and Packaging Waste Directive and the UK Producer Responsibility Regulations for Packaging.

In practice, it requires packaging producers to provide a financial incentive to the packaging recycling industry to collect and reprocess enough material to meet government targets. According to the guide, the system ‘provides a “top up” subsidy over and above market prices to incentivise reprocessors to process sufficient material’.

Producers are required to ensure that an equivalent amount of packaging waste of the relevant materials has been recovered and recycled to meet their obligations. They do this by purchasing PRNs, or packaging export recovery notes (PERNs) for material that is exported, from reprocessors. The ACP says that the funds raised by the system are then used by the recycling industry to incentivise increases in capability towards meeting future targets.

While the report states that the system provides low-cost compliance to producers, and subsequently consumers, compared to other European schemes and has been proven to help achieve government targets, it also acknowledges some criticisms of the system. These include the fact that it does not specifically target given material sources, for example household packaging, and that funding can be difficult to trace and demonstrate impact, particularly for local authorities.

Performance and use of PRN revenue

The report also includes information on the UK recycling performance together with analysis of the reported use of PRN funds by reprocessors.

ACP publishes PRN guide
Since the regulations came into force in the UK in 1997, packaging recycling performance has ‘significantly improved’ to the point where over 60 per cent of packaging is recycled, putting the UK, the report states, ‘amongst the best performers in Europe’. Going forward, government targets aim for 72.7 per cent of all packaging to be recycled by 2017.

Case studies in the report are given for producers of each of the main packaging materials to show how PRN funds are distributed. DS Smith, for example, invests the PRN revenues from its recycling division to fund the purchase of collection infrastructure in the form of vehicles, increase its recycling capacity, develop new reprocessing markets and develop communication strategies for partnership working with local authorities.

Alupro, the Aluminium Packaging Recycling Organisation, which represents the producers, converters and reprocessors of aluminium packaging in the UK, has similarly used revenue from the PRN system to fund a number of behaviour change campaigns and communication programmes including MetalMatters, Every Can Counts and LearningAluminium.co.uk.

The report does note a negative impact on local authorities themselves, however, stating that a ‘lack of transparency’ means it is unclear ‘if or how the funds are being invested in collection’. According to the report: ‘The total funding available through PRNs at around £50m to £100m per year is probably lower than many local authorities expected. This suggests that there is likely to be limited scope for the PRN system to directly fund increased collections or infrastructure.’

However, it suggests that with future increases in recycling likely, more household waste will be required for collection and thus more packaging materials recycled. With diminishing funding available to support household recycling at such high levels, greater alignment of packaging and household recycling targets could offer a mechanism for this to be realised.

Effort to improve transparency

The ACP is an independent committee appointed by the government to support the Department for Environment, Food & Rural Affairs (Defra) in matters relating to packaging falling within their respective responsibilities.

Commenting on the guide, Chairman of the ACP Phil Conran said: “The guide provides a wealth of information which I hope will be useful to a wide range of stakeholders from individual companies and trade associations to recycling companies and local authorities.

“It is part of our efforts to improve transparency of the system and be more open about the funding and performance achieved. One of the most important sections contains a number of case studies illustrating how PRN funds have been positively used by reprocessors and exporters to increase collection and recycling. ”

Adrian Hawkes, chair of the task force that created the report, added: “We hope to amend and improve the guide over time so would be open to any constructive suggestions for improvements.”

Resources Minister Rory Stewart said: “Making the most of our resources is vital to our environment and our economy and this guide is an important step in improving understanding and transparency of the PRN system for all involved.”

The ACP guide to the PRN system can be downloaded from the National Packaging Waste Database website.