Defra and industry respond to proposed packaging reforms

The Department for Environment, Food, and Rural Affairs (Defra) has published a summary of responses, including from the Government, to its Packaging Waste Recycling Note (PRN) and Packaging Waste Export Recycling Note (PERN) reform which was published back in March.

Setting out plans for reform, the document intends to address issues identified in the current systems, ‘including PRN and PERN price volatility, a lack of transparency, and the potential for fraudulent issuing of PRNs and PERNs’.

The consultation ran from 26 March to 21 May 2022. Reforms to these systems have been taken forward by Defra and will be implemented alongside a ‘wider Extended Producer Responsibility (EPR) for packaging reforms’.

When first published, the consultation sought views on proposals to address the identified issues and improve the overall effectiveness of the systems, including suggestions from the Advisory Committee on Packaging (ACP) and other industry bodies.

Responses in the new ‘consultation outcome’ include the introduction of mandatory monthly reporting for reprocessing or export data, the continuation of the mandate that producers meet recycling obligations by obtaining PRNs until a DRS system is operational in the relevant country, and additional requirements are set out for exporters.

Also outlined are plans that the Government does not intend to progress with – including a compliance fee, a domestic recycling target and any options put forward to alter the timescale over which PRNs can be traded.

Overall, the consultation received 129 separate responses.

Industry response

Commenting on Defra’s responses to PRN and PERN reforms, Robbie Staniforth, Innovation and Policy Director at Ecosurety, told Resource: “These amendments do not go far enough to fix the current system. We hope that the tweaks proposed will produce some benefits in terms of price stability for both producers and recyclers. However, they're unlikely to encourage long-term investment in domestic reprocessing capacity that is so badly needed.

“Overall, we are disappointed that the UK Governments have not seized this opportunity to fix the system after so many years of discussion and debate. The overall opacity of the PRN system looks set to continue. These proposals are likely to be remembered as an opportunity missed.”

Martin Trigg-Knight, Director of Compliance Services at Clarity Environmental, explained to Resource: “Clarity welcomes the broad spectrum of engagement with the Government’s PRN reform consultation.

“The government’s response largely echoes their pragmatic approach to the implementation of EPR. The introduction of mandatory monthly reporting will bring greater accuracy to in-year assessments of UK recycling capability and bring greater balance to the PRN market.

“This measure, alongside greater requirements for [reprocessors], exporters, and compliance schemes, should increase transparency, and bring better accountability to the sector.”

Data and revenue reporting

Defra says that it now intends to ‘progress with the proposal to introduce mandatory monthly reporting, for both reprocessing and exports tonnages data and PRN/PERN price data, as a result of the responses to the consultation, and broader stakeholder engagement.

A majority of respondents agreed with this proposal – the consultation summary highlights that 61 per cent of respondents answered “Agree” when asked if they agree or disagree with the proposed approach to revenue reporting for reprocessors and exporters, whilst 16 per cent responded “Disagree.

According to Defra, in practice this data will be reported to the regulators ‘who will collate, process and anonymise the data before publishing the aggregated tonnages and price averages’.

This reform has the potential to ensure that commercially sensitive data is protected and will be introduced as part of the bodies wider packaging EPR Regulations.

Defra adds: “We recognise that this additional reporting is a new administrative burden for reprocessors and exporters, particularly for smaller companies. However, as accreditation will remain voluntary, only reprocessors and exporters who wish to issue PRNs/PERNs will be required to undertake this reporting.”

Additionally, Defra says it intends to amend the categories for revenue reporting in line with the proposals laid out in the consultation – these reforms will be introduced as part of its wider packaging EPR Regulations.

Deposit Return Schemes (DRS)

Defra presents ways in which a DRS and PRN system may work together, once the DRS – which could have a significant impact on the collection infrastructure – is introduced.

The document states that producers will be expected to continue meeting recycling obligations until a DRS system is operatiional in its relevant country.

In Scotland, where a DRS scheme is expected to become operational from August 2023, producers of in-scope packaging will have obligations under DRS to collect this packaging, or have it collected by a scheme administrator, for recycling.

For this reason, Defra explains that the recycling obligations under the packaging producer responsibility system currently placed on drinks containers in scope of a Scottish DRS will no longer apply and as a result, this material will no longer have to obtain PRNs to evidence its recycling.
      
Exports 

Reliance on exports to meet targets is one criticism of current PRN and PERN systems.

In response to Defra’s initial consultation response in March, Environmental Services Association (ESA) Executive Director Jacob Hayler noted that the continued collection and management of non-household packaging waste, as well as the recycling of all packaging waste, is a ‘sensible outcome’ of updated systems. However, he warned that the amended system will fail to ‘fully address the PRN/PERN distortion, which favours exports,’ saying: “we need all policy drivers to be aligned to promote the re-shoring of recycling and reprocessing activity.”

In the document, additional proposals to those outlined in the consultation are presented. Here, 79 respondents provided suggestions for improvements to the operation of the PRN/PERN market, including increased levels of domestic reprocessing and limiting the amount of packaging waste that is exported.

Defra explains that this could be achieved by ‘introducing an additional UK recycling target for certain materials that requires a minimum proportion of a producer's recycling obligation to be met through the purchase of PRNs (rather than PERNs)’.

Further suggestions focused on the need for ‘greater scrutiny’ of exports to ensure that exported packaging waste was recycled to the same standard as packaging recycled in the UK, and for greater investment in UK recycling infrastructure.

However, the document states that Defra has ‘not progressed’ plans to roll out targets, ‘as it needs further work to understand its trade implications’. It adds that it ‘will keep this under review.’

Despite this, Defra says that ‘additional requirements will be placed on exporters of packaging waste to increase the scrutiny of exported materials, as outlined in the Government Response to the 2021 EPR consultation’.

For example, all exporters will be required to register with a regulator and report on the tonnes of packaging waste received and exported for recycling in overseas sites and exporters will be required to obtain evidence that shipments were received at final destination sites and obtain evidence of recycling by overseas reprocessors.

As well as this, after being asked ‘Do you agree or disagree with the introduction of an operator competence test for accredited reprocessors and exporters?’ 93 per cent of respondents answered “Agree”, only 4 per cent responded “Disagree”.

For this reason, it is Defra’s intention to progress with the proposals to introduce an operator competence assessment for both compliance schemes and accredited reprocessors and exporters. This will also be introduced as part of its wider packaging EPR regulations.