The Q4 data has been published and it is encouraging to see that the UK met the 2020 recovery and recycling targets despite the challenges of the pandemic faced by the industry.
The newly released figures detail a very positive result for 2020 packaging recycling with all categories exceeding their target, a position that was already clear from the previous quarterly results.
The table below shows the gross and net requirements for 2020, plus the carry-in tonnage which is the amount of PRNs produced in December 2019 that are issued for 2020 use.
You will see from the table below that all materials performed well against the recycling targets, with a surplus in all materials:
From this data we can also confirm the carry-in tonnage for 2021 - PRNs generated in December 2020 that can be used the following compliance year. The table below shows the forecast 2021 UK obligation, along with the carry in tonnage and quarterly requirements:
What does the data mean for producers?
Here we take a material specific view of the impacts for producers:
The latest monthly recycling data shows that glass recycling is down by 18% compared to this time last year and this has affected the PRN price in the recent weeks.
Whilst the national lockdown is causing issues for recyclers who process glass for the remelt industry, there is a concern that glass volumes being captured in the municipal waste stream have also slowed down in the last couple of months. The market is forecasting a significant increase in the glass packaging placed on the market in 2020, this will lead to a significant increase in the volume of PRNs needed to meet compliance for 2021.
Despite the strong volumes of plastic recycled in 2020, Q4 volumes were 20% down compared to Q3. The recent monthly recycling data also shows that recycling volumes have fallen by 11% compared to the same time last year.
The positive news is that the carry out volumes increased by 72% compared to the same period the previous year. Plastic PRN prices will remain volatile for the remainder of 2021, due to the issues of exporting waste to Turkey and the impacts of Basel compliance and Brexit.
The 2020 recycling and recovery data shows a positive increase in the carry-over of PRNs into 2021, along with the increase in recycling monthly data, paper is performing well. The market is expecting an increase in demand due to the increase in online shopping during local and national lockdowns.
Aluminium recycling remained extremely strong all year and this has continued into 2021. The monthly recycling data is showing no risk to supply, although the market is forecasting an increase in the packaging placed on the market which will increase the volume of PRNs needed for 2021.
Recycling volumes remained strong in 2020 and the carry out tonnages have increased by 13% compared to the previous year. The monthly data has shown that steel recycling has slowed down in the last couple of months. The risk of Liberty Steel going into administration will have a short-term impact of the supply of PRNs which could see prices soar.
The recycling target has been reduced from 48% to 35% and the market is forecasting a fall in the amount of wood packaging placed on the market in 2020. Wood recycling must remain strong for 2021 and volumes need to remain similar to 2020 in order to support the general recycling obligation.
Ecosurety will continue to communicate the changes in the PRN market throughout the remainder of the year. Ecosurety packaging members can also access the PRN market tracker that provides a daily update on market pricing trends and performance by clicking here.
If you would like to speak to a member of the Ecosurety team about the impact of compliance on your business, please contact us on 0333 4330 370.
Group procurement manager
Sandeep works in the role of Group procurement manager. Sandeep builds and maintains strategic relationships with our key service partners for packaging, batteries and WEEE, whilst creating new relationships and initiatives to improve UK recycling. Sandeep has over 17 years’ experience of the regulations and understands the challenges and opportunities that can arise from volatile markets.