DEFRA will be launching a consultation over the festive period.
As it currently stands, 81% of all glass tonnage on the UK Market must be recovered and recycled. This means that for producers handling glass packaging, the PRN obligation is calculated by tonnage of packaging handled x relevant activity percentage (manufacture/conversion/pack-fill/sell) x the 81% recycling target.
A glass industry report, published in October, has shown that the amount of glass placed on the UK market had been overestimated by around 350,000 tonnes per year. This means that the actual total tonnage is closer to 2.4 million tonnes, than to 2.75 million tonnes originally estimated, which is what the 81% target is based upon.
The EU target for glass recycling is currently 60%, meaning that the UK is in a position of comfortably meeting this. The Advisory Committee on Packaging (ACP) has called for DEFRA to base the UK obligation targets on the estimated tonnage of glass being 2.4million tonnes, and therefore to also reduce the obligated percentage from the current 81% to 77%.
Defra has recently written to ecosurety and other stakeholders to confirm that they will be holding a consultation on revising glass targets and that this will be published over the Christmas period. This means that producers who handle glass packaging may see their PRN obligation decrease for 2014. It is unknown what the target will be reduced to; there have been suggestions that it could be around 77%.
Throughout 2013, we have seen pressures on the market to meet the total PRN demand, and it is thought that removing 4% of the glass obligation (around 80,000 tonnes) could reduce some of the tightness on the market and potentially lower the price of glass PRNs during 2014. However, there are other factors influencing the market that could lead to the price remaining high into 2014. Increased scrutiny on aggregate and exporter accreditations by the EA could mean that there is a drop in supply by up to 50,000 tonnes. The good weather has had a positive impact on the volume of glass packaging sold, which means obligations will be higher for 2014 than they were for 2013 anyway.
James Piper, Commercial Manager said: "Whilst it is encouraging to see DEFRA reviewing the targets in order to lower costs for producers in 2014. There are a lot of elements that could make the reduction in price limited. Therefore it is essential members work with their scheme to understand ways to maximise the benefit of a volatile year."
Throughout yet another turbulent year in the glass PRN market, ecosurety has continually worked hard to minimise our members' exposure to higher pricing and removed risk wherever possible. Following shortages in the supply of aggregate PRNs, ecosurety ensured that we closed out our purchasing as early as possible and that we fulfilled all of our aggregate requirements. By identifying and reacting to the early warning signs in the market, ecosurety secured all of the necessary tonnage to cover our members' glass aggregate obligation, so that they will not be exposed to higher pricing as a result of substituting the cheaper glass aggregate with more expensive remelt PRNs.
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