ESA assesses potential new PRN systems for post-Brexit UK

The potential for a post-Brexit shake-up of the UK’s packaging waste compliance system has been investigated in a report commissioned by the Environmental Services Association (ESA).

With the current UK system for ensuring that packaging recycling targets are met under continued criticism, the ESA, a representative body for the UK’s waste and resources management industry, commissioned waste policy consultancy Perchards and 360 Environmental to create the report, ‘A Discussion of the UK PRN/PERN System for Packaging Waste and Possible Alternatives’, which looks at possible alternatives.

ESA assesses potential new PRN systems for post-Brexit UK
ESA executive director Jacob Hayler said: “We have already outlined our view that extending producer responsibility is a key element in building a world-leading and sustainable UK waste and resource management network. The recent Brexit vote demonstrates the world is changing and, as a result, the framework which governs the work we do must change with it.”

At present, the packaging recovery note (PRN) system requires producers to provide evidence that a proportion of the packaging that they have supplied has been recycled on their behalf. To fulfil these obligations, producers have to purchase a PRN or Packaging Export Recovery Note (PERN) from an accredited reprocessor or exporter for every tonne of material supplied.

Compliance schemes purchase PRNs from reprocessors and then sell them on to producers, with no connection between the two parties. Over £565 million has been spent on PRNs since the system became electronic in 2007.

However, the ESA-commissioned report considers whether this system of tradable recycling certificates remains the most suitable mechanism for ensuring that recycling targets are met. There are three main criticisms of the current system: its lack of transparency (which compliance scheme ecosurety is attempting to solve with its new circularety crowdfunding service); the resulting price volatility, which offers no consistent basis for infrastructure investment; and the fact that it encourages the export of material, which could lead to issues regarding the security of supply in the future.

The report claims that ‘no single model already in operation could be applied’ to replace the current system, and subsequently sets out four possible options for change, using elements used in other nations.

The options are all assessed in the report, with the assumption that the UK’s recycling targets for packaging waste will increase irrespective of its future relationship with the EU. Though the more relaxed approach to targets that would likely follow if the UK was in control might necessitate less wholesale changes to the system, it notes that, should the European Commission’s proposed rules on extended producer responsibility be applied to the UK, ‘radical change would be inevitable’.

Options for a redeveloped PRN system

The four options, presented in ascending order of difference to the current system, are:

  1. Reprocessors and exporters continue to issue evidence notes, but they would no longer be a funding mechanism and would be provided free of charge, with compliance schemes instead contracting with collectors of packaging waste for evidence notes needed to meet targets.
  2. Similar to the first option, but with targets split between packaging waste from household and commercial and industrial (C&I) sources, requiring schemes to acquire evidence notes to cover the total recycling obligation, with a certain proportion needing to be household notes.
  3. Compliance schemes would contract directly with local authorities for household waste, with separate targets for household and C&I packaging waste. Schemes would then fund a proportion of the collection cost, while for C&I waste, schemes would focus on encouraging more material to be collected and accurately recorded.
  4. Compliance schemes take full operational and financial responsibility for household collection of packaging waste, meaning that local authorities would no longer have any operational role. This is the arrangement in Germany, Austria, Belgium and Sweden, where compliance schemes organise the collection of packaging waste. C&I waste would be addressed as in option three.

Pros and cons of options designed to ‘stimulate debate’

The report does not make recommendations regarding any of the options, but provides a summary of their advantages and disadvantages to enable further discussion within the industry on the possible future of the producer responsibility system.

Under one of the options local authorities lose control over collections, while another sees them deal directly with compliance schemes
It states that the first option would ensure that funding is targeted at collection, sorting and reprocessing, but wouldn’t address the lack of funding in infrastructure. The second option would address the argument that the current system does not properly represent household waste, but would have a problem getting accurate data.

It concludes that the third option, dealing directly with local authorities, would hugely increase transparency, but questions whether a central organisation to coordinate the various contracts would be needed, as is the case in other countries. Finally, it notes that the fourth option mirrors arrangements in other countries in Europe, but ones that were created when recycling systems were less developed. As local authorities have already invested in facilities and have long-term contracts for collection, this would likely be an unpopular option with councils.

Commenting on the options, Hayler noted: “Any changes to the current system would almost certainly involve an increase in producers’ costs. Producers rightly stress that there should be a direct relationship between level of funding of the system and level of control over how it operates. If producers are expected to bear the full cost of the system, they should also be able to design it.

“I hope this report will stimulate debate and encourage all stakeholders to address the urgent issues that need to be resolved in order to create a long-term strategy for our industry.”

Producers rally against responsibility proposals

Ahead of the ESA’s report suggesting changes to the PRN system, a group of organisations representing packaging producers, including INCPEN, the British Retail Consortium, British Soft Drinks Association and the Packaging Federation, wrote to Waste Minister Therese Coffey encouraging her to fight the changes to producer responsibility proposed in the European Commission’s Circular Economy Package.

The proposal would require producers to cover the entire waste management costs for products they place on the market, whereas the current system in the UK includes contributions from producers, local authorities and consumers.

The letter reads: ‘The view of experts in the UK is that the overall cost of recovery of packaging to producers in France and Belgium is about five times that in the UK, whilst costs in Germany reach 10 times the UK amount. This could therefore see UK producer responsibility costs for packaging increase from the current average of £50-£100 million per annum to as much as £1 billion per annum.

‘Such a significant and disruptive change is also likely to have wider negative impacts on the overall effectiveness of the UK packaging recovery system with no net environmental benefit.

‘Whilst we accept that there are some aspects of the UK producer responsibility system that could be improved, it has… several important strengths and benefits compared to those systems adopted in other parts of Europe and remains essentially fit for purpose. We therefore do not see the case at this point in time to make radical change.’

The ESA’s report, ‘A Discussion of the UK PRN/PERN System for Packaging Waste and Possible Alternatives’, can be downloaded from the association’s website.

Related Articles