Hammond announces stretching targets for the PRN market

After a consultation it appears that DEFRA have taken an option that draws on the highest proposed targets across the different packaging types. You can read about the packaging consultation here.

The final targets in 2020

Please note that these figures are not set in legislation. They are the increases proposed in the consultation that match the final 2020 target set out in the Budget today.

These targets present challenges to both the wood and paper PRN markets. Both have traditionally been so over supplied that the market price has remained low and some in the paper industry have questioned whether the PRN revenue goes towards its intended aim of driving investment in the system.

The metal recycling targets will also provide a significant incentive to invest in the infrastructure of the UK. During the consultation, responses from trade associations who represent the aluminium recycling industry publicly called for the most pressing targets from DEFRA. These targets announced today will be warmly received by recyclers.

It’s also the first indication that the UK government looks likely to follow the circular economy proposals set out by the EU commission and will provide some relief to the waste industry.

How are producers affected?

The target increases will cause some instability in markets for 2018 as recyclers re-adjust to the new levels of demand for PRNs. In the wood and paper markets, with the scale of increases, recyclers could start to demand high prices for tonnage going into 2018.

Commercial manager Robbie Staniforth commented "It's the first indication that we have received from Government that the environment is on the agenda, and we're pleased to see they've opted for a change."

"We're slightly surprised that they've opted for a mix of targets and our only concern is that big recycling jumps may create artificial spikes in PRN prices. As the years progress, it will be important to ensure these PRN revenues generated are directed to improving recycling in the UK."

We’ll continue to monitor these markets as they develop into 2018 and wil  provide feedback to our members on how they can adjust to the newly announced targets.

To discuss how this news may affect your packaging compliance, please contact our team on 0333 4330 370 or email info@ecosurety.com.

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